The rate of growth in e-commerce is astounding; it has forced retailers, e-commerce giants, warehouse management system vendors, third-party logistics providers and integrators, national carriers, and manufacturers to re-evaluate their use of technology, specifically of automation. Handling orders in batches and package stations with label-guns are simply ineffective methods for today’s heightened level of e-commerce. Let’s take an in-depth stroll through the existing level of warehouse automation technology and how it is empowering the next generation of retail supply chains.
The Problem: Continuous E-Commerce Growth Demands Better, Faster Systems
E-commerce shatters annual records with each holiday shopping season, reports Clint Reiser of Logistics Viewpoints. E-commerce sales are climbing at a compounded annual growth rate of 15%, having doubled in size since 2012. Although some growth may be attributed to increased sales of more expensive items, like furniture, the strong growth naturally places a hefty burden on all supply chain parties, regardless of their role. However, the impact on warehousing is perhaps the most significant because the warehouse is the intermediary between all other supply chain partners.
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The Solution: Warehouse Automation Technology Is Perfect for a Pressured Supply Chain
The first to make a splash in the field of warehouse automation technology was Amazon, with its purchase of Kiva Systems, commonly known as Kiva Robots, in 2012, says Reiser. At the time, Amazon was only valued at $100 million in revenue, but it paid $775 million to acquire Kiva. The allure of automation lies in the ability to streamline processes of low to medium complexity, provided they have a high volume. In other words, the continuous action of picking items to totes was a perfect opportunity for warehouse automation.
Although Amazon has been somewhat secretive of its advancements in technology, the release of free shipping for Prime Members and plans to deploy Amazon PrimeAIR suggest that the e-commerce giant has put the power of automation to work to generate record-breaking growth and enhancements to its productivity. With today’s supply chain leaders, including warehouse managers and software vendors, facing greater pressure to develop newer, more autonomous systems, the Amazon Effect appears to have spilled into the realm of robotics. In fact, numerous companies were found to be developing robotic systems capable of automating the replenishment, picking, packaging, and moving processes beyond Kiva capabilities in 2012, at a convention as recently as 2017.
The Reward: Total Warehouse Automation Offers Significant Advantages Over Traditional Operations
From robotics to automated order processing, warehouse automation technology can dramatically improve warehouse management and everyday processes. According to the Huffington Post, the major benefits of warehouse automation, as identified by an ARC Advisory Group report, include:
- Continuous uptime.
- Fewer disruptions, as robotics do not require vacation time, sick days, paid leave, lunch breaks or other benefits.
- Self-diagnostic systems, further reducing the risk of downtime.
- Self-optimizing systems, advising warehouse managers of how to get more from their existing inventory, and if applicable, use robotic systems to re-slot a warehouse as needed.
- Greater refinement in movement, reducing the risk of damaged products and equipment, not to mention using algorithms and advanced safety features to reduce risks to laborers.
- Automated storage and retrieval systems, as reported by Brad Fraser of Abel Womack, including robotic systems that have the ability to move bulk items without extra equipment, moving entire racks to fill orders coming in at a faster pace.
- Increased perfect order percentage by checking order contents against order tickets and identifying issues before an order leaves the warehouse.
Put the Power of Warehouse Automation Technology to Work in Your Company Now
Delaying the move towards warehouse automation is impractical and will result in greater costs to your company. Since e-commerce shows no signs of slowing, the need of automation will continue to grow. While exact figures on the value of e-commerce vary, depending on the source, Forbes magazine estimated the value of e-commerce to be more than $6.7 trillion by 2020. However, that report is now 2-years-old, and the potential growth rate may have expanded considering the record-breaking sales of the 2017 holiday shopping season. The sheer volume is overwhelming, but its implications are not. Companies should begin investing in automated warehousing solutions ASAP.