The Warehouse Automation Revolution
Written by Michael Savvides – Warehouse Systems, Process and Automation SME (Maersk WnD)
Michael’s Biography:
Michael Savvides is South African born Warehouse Systems, Process and Automation Subject Matter Expert, living in Los Angeles California, having worked for the Global Fortune 500 Shipping and Logistics Organization, Maersk. Holding an MBA and Master of Science in Engineering, Michael has worked in the Shipping, Logistics and WnD space for several years. Attaining significant expertise in working on several automated customer implementations across the United States, serving some of the largest retail customers, utilizing conveyor sortation and robotic technologies to transition a manual operation to one that is automated with complex system integrations, enhancing the efficiency and output of these large scale warehouse operations.
The Warehouse Automation Revolution
For over 50 years, industrial robots have been used to automate physical, repetitive tasks, relying heavily on their consistency and brute strength to generate value. These “Traditional” robots were expensive and lacked capabilities, effectively limiting the adoption to a handful of industries, including Warehouse and Distribution providers.
However, the latest generation of advanced robots incorporates the full technology stack, combining physical automation with digital efficiency. As a result, advanced robots and conveyer systems are able to generate value where traditional solutions could not.
Although some of these solutions have been introduced effectively over the last 5 to 10 years in various warehouses scattered across the US, the true value of these innovations and more so the continued reliance on labor became ever more relevant during the COVID-19 pandemic. Granted, some warehouses with conveyer systems were able to run freight, many of these facilities would come to a standstill, by virtue of not having enough labor to unload containers on to the sorter and pack trailers from the outbound lanes (due to the stimulus checks, people preferring to stay at home as opposed to coming to work).
While local and international wages have been steadily ticking upwards, the price of industrial robots and automation solutions have fallen rapidly. Reducing at a CAGR rate of 6.8% since 1995, which compares well with tech hardware deflation, which has tracked in a range of 5%-7%.
Research conducted by Ark Invest, Industrial Robot Prices could drop by as much as 50% - 60% by the year 2025.
Advances in dexterity and sophistication are allowing industrial robots and conveyer sortation systems to make deeper inroads into precision roles typically taken on by permanent or temporary labor found in warehouse facilities.
While it is clear that these improvements in hardware design have played a key role in expanding overall robot dexterity, the real advances towards precision movement can be attributed to innovations in machine learning and sensor technology.
This is particularly evident in the advances made in automation specifically designed for picking and sorting. In 2015 robots and sortation systems could pick, place, and divert around 25 items per hour in a warehouse facility. However, today these automated solutions are able to pick and place well over 200 items per hour. Further advancements in the next three to five years, should see picking and sortation speeds advance past human capabilities, which would signal a significant inflection point in warehouse automation.
In saying this, from recent experience in warehouse facilities in the US that are utilizing automated conveyer systems, we are still reliant on human labor for effective operation of these solutions. It has become very apparent that as much as we are introducing effective automated solutions, with the intention to relieve some of the operational responsibilities of labor and temporary labor in a warehouse. We have come to realize that the inherent reliance on maintaining labor and creating new roles within the facility to maintain the efficient operation by utilising the new automated systems, is ever present.
It is not uncommon to have the discussion of how automated facilities are taking the jobs of labor, however, what we have found is that we are still reliant on labor, but now in a different capacity. This promotes the up-skilling and education of labor, creating new and different opportunities to work in the Warehouse & Distribution space.
As global supply chains embrace the latest innovations in digital technology, a major investment cycle is on the horizon. LogisticsIQ now estimates the global warehouse automation market could double by 2025. At this point, Advanced Robot Solutions will feature as a kay enabling technology that could account for up to 41% of the $27bn in annual spend.
If advances in these automation technologies are heavily weighted towards these types of warehouse related technologies, as some predict, the possibility for significant displacement of workers and additional loss of the labor share is quite high. But this is far from certain. The development of these new technologies that enable new tasks, for which humans are better suited, could potentially result in a greater future for workers.
There are natural comparisons to the prevalent introduction of PC’s into offices, which undoubtedly will have displaced millions of office admin jobs like secretaries and typists, the new task in the respective industries resulted in new occupations, including computer technicians and IT consultants.
The longstanding implications of warehouse technological advances for the labor market is, at this point, still unidentified. The doom and gloom that often accompanies commentary about the future of work is probably more than a little premature. Technology displaces jobs. But it also creates new jobs, and often in unpredictable ways.
Sources:
• Constant 2017 prices
• Ark Invest, “Big Ideas 2019”, January 2019
• https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2758472
• https://www.roboticsbusinessreview.com/manufacturing/robot-precision-evolves/
• LogisticsIQ, “warehouse Automation : Forecast to 2025”
• DHL, “Logistics Trend Radar –Version 2018/19”
Michael’s Biography:
Michael Savvides is South African born Warehouse Systems, Process and Automation Subject Matter Expert, living in Los Angeles California, having worked for the Global Fortune 500 Shipping and Logistics Organization, Maersk. Holding an MBA and Master of Science in Engineering, Michael has worked in the Shipping, Logistics and WnD space for several years. Attaining significant expertise in working on several automated customer implementations across the United States, serving some of the largest retail customers, utilizing conveyer sortation and robotic technologies to transition a manual operation to one that is automated with complex system integrations, enhancing the efficiency and output of these large scale warehouse operations.
