How Robots are Changing Ecommerce Warehouses – Paul Trudgian

Automation in warehouses has been with us for a while, with material handling and storage equipment such as shuttle racking and conveyor systems. However, new robotics technology is introducing more intelligence in the automation of material movement in warehouses. Traditionally automation relied on fixed physical infrastructure such as tracks, but what we’re now seeing is flexibility for robots to carry products freely across the floor based on non-physical tracks determined by software algorithms.

Why robots are being deployed in warehouses

The speed and accuracy of logistics are key differentiators in the competitive retail market, especially when it comes to ecommerce retail. It’s just too easy to fall behind the likes of Amazon and lose market share based on poor logistics performance. This is where warehouse robotics are coming into play – increasing speed, efficiency and accuracy in the picking and packing of ecommerce orders.

In a traditional pick and pack environment the picker goes to the shelf location, and either picks-to-cart (in a manual environment) or picks-to-conveyor (in a semi-automated environment). The product is then either manually moved to the packing area or moved via conveyor. Improving on this process, robots are being deployed to physically take the shelf location direct to the packing area where the packer then picks and packs, effectively creating a logistics ‘assembly’ line, similar to how a car plant operates.

With this solution, the robots remove the need for manual picking labour and can reduce pick times by up to 60%. Kiva Systems, a robotics company now owned by Amazon, has reported that this type of robotics solution can be three times more efficient than pick-to-conveyor systems and six times more efficient than manual pick-to-cart approaches.

Who’s using robots in the UK?

The UK has one of the most mature ecommerce markets in the world and is proving to be fertile ground for the adoption of warehouse robots. Companies such as Amazon, Ocado and DHL are investing millions of pounds into robot systems in the UK, continuing to push the boundaries of the technology.

If you want to see a warehousing vision of the future then you need to go and see online grocery retailer, Ocado’s warehouse facility which is located near Andover in Hampshire. The warehouse uses hundreds of cuboid robots busily working away on selecting grocery items for delivery. The robots manoeuvre their way effortlessly around the warehouse, totally oblivious to one another, but never getting in each other’s way. The movement of each robot is controlled through a centralised computer system that employs planning algorithms which are constantly communicating with the robots. Each robot is sent a specific area where they need to pick up a crate containing that food category which they deliver to a human worker at the side. Using this technology Ocado has found that a 50-item order can be completed within minutes rather than up to 2 hours, the average time in one of their older warehouses.

It will be no surprise to learn that Amazon is also one of the main companies at the forefront of implementing technological advances in their warehouses. Amazon began deploying robots in its UK distribution centres in 2016, starting with an £80m investment in their Manchester site. At the Manchester site some 2,500 robots were introduced, controlled by a central server that gives instructions about speed and location, based on a system of bar codes on the floor. It’s reported that Amazon now deploy 100,000 robots globally in their distribution operations.

Robots are still far from commonplace

This ‘Amazon’ level of automation using robotics is still relatively rare in warehousing – it’s only the major retailers that have the revenues and margins to deliver a reasonable return on investment. Even a relatively small deployment of 50 to 100 robots can currently cost in the region of £2m to £3m. However, with more and more people choosing to shop for products online, the e-commerce boom is only set to grow. In line with this growth we expect to see the rapid evolution and falling costs of robotics technology, artificial intelligence and big data. As costs fall then we will undoubtedly start to see a broader deployment of robotics in warehouses.

The impact to jobs

When discussing warehouse robotics, the emphasis is often placed on the fact that human job roles will be lost to automation. However, advocates argue that robots in logistics can reduce menial tasks as well as alleviate humans carrying out harmful tasks such as heavy lifting.  Companies are also looking at ways that humans and robots can work together. For example, DHL are looking to place collaborative robots to work safely alongside humans in the packing process, rather than replace the packers themselves.  Many other companies believe that automation may create more human jobs as they will be able to open more warehouses to deal with rising customer demands.

The reality is that, currently, the demand for labour outstrips supply

For the UK labour market, Brexit is a key factor in the jobs versus robots debate. The current uncertainty over EU citizens’ rights to stay in the UK has caused net migration to fall to its lowest level in three years, with more than half the drop caused by EU citizens leaving and fewer arriving since the Brexit vote. The impact of this on the logistics sector is significant – there are now far fewer warehouse operatives available. This labour decline is expected to continue whilst also precipitating an above inflationary rise in wages. That’s part of the reason why robotics is taking a hold in the UK: it provides the opportunity for improved efficiency and a reduced dependence on the labour market where demand is currently outstripping supply.

Robots will indirectly benefit smaller e-commerce retailers

Whilst major retailers such as Ocado have the sales volumes required to get a return on investment, or even buy their own robotics company, as Amazon did with Kiva systems, smaller retailers simply don’t have that option. Of course, market pricing for robots will reduce, but this will be a gradual process over the next 5 to 10 years and won’t help smaller retailers in the here and now. However, the more robotics deployed by major distribution centres means the less labour they will absorb from the market. Consequently, this will leave more labour availability for small operators and help mitigate rising wage demands.

The next evolutionary step for robots in warehouses

The continued demand around ecommerce will only heighten the need for greater efficiencies in the supply chain. For example, Ocado is not resting on its laurels and, even though it may already have technologically advanced warehouses, it is already considering testing the first humanoid robot, termed the “factory worker of the future”.  It is looking at how it can complement humans within the warehouse with a project entitled the ‘SecondHands Project’. The objective of the project is for a robot to scan its environment and see what tasks it can help with. The robot will then use a combination of machine learning, as well as computer vision, to achieve this goal. As well as understanding its environment, it is also hoped that the humanoid robot will feature an Alexa-style speech recognition system that will allow it to communicate with its human counterparts.

Apart from robotics, other new technological advances are changing warehouse practices, such as recent conveyor belt improvements which have meant that belts and chutes can run for miles while sorting multiple postal items every second; or robotic arms which are articulated and can pack goods into boxes. These types of technologies are already helping companies succeed.  For example, UPS in Cologne have automated sorters that process 190,000 packages per hour on a conveyor system covering 40km, with one item taking an average of 15 minutes to move through the hub from entry to the final loading point. UPS say that this facility and automation has helped them to increase their package sorting capacity, reduce human error and alleviate repetitive stress on their human workforce.

As we can see, robotics in warehousing is set to stay and will continue to grow. Recent technological advances have made it possible and what once seemed to be science-fiction is now reality. The next challenge will be to really understand how humans and robots can work together.

The consulting team at Paul Trudgian can assist in all aspects of warehouse improvement. Contact us today on 0121 517 0008 or email [email protected]

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