Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
There’s no question that robots have eased many logistics headaches of the pandemic age. They’ve helped distribution centers in every sector handle a surging tide of e-commerce orders with greater speed, efficiency, and accuracy than “old-fashioned” manual operations ever could.
Yet as impressive as those achievements may be, users say they fail to tell the whole story. Sure, robotic systems can help handle inventory, but they can also boost another crucial metric—worker retention rates—by creating a better workplace for the human employees around them, several recent case studies show.
Experts say adding robots to the warehouse floor can allow companies to balance the need for speed with the need to retain the pickers, packers, and drivers who keep e-commerce operations flowing. A DC with robots offers benefits like shorter walking distances, lighter lifting loads, and digital dashboards that show progress toward goals. In that environment, workers tend to stay with an employer longer, companies say. And with industry watchers forecasting it will be decades before warehouses become truly “lights out” operations that require no human intervention, human labor will remain critical for logistics at every level.
MAKING PICKING EASIER
For an example, just look to Liberty Hardware Mfg. Corp., a High Point, North Carolina-based company that makes products like bath hardware, shower doors, and cabinet hardware. The business sells its home décor products through home centers as well as mass retail and direct-to-consumer channels.
In 2019, Liberty saw its e-commerce volumes begin to explode—a trend that extended through the pandemic year and into 2021. At the same time, customers were becoming more demanding, first pushing for 24-hour deliveries (in place of the standard 48 hours) and later, for same-day service, says Miles Poole, Liberty’s vice president for operations and planning.
To meet the rising demand, the company increased staffing at its 680,000-square-foot DC in Winston-Salem, North Carolina, which operates three shifts a day, seven days per week. But that wasn’t enough. So it turned to 6 River Systems, an autonomous mobile robot (AMR) vendor that is a division of e-commerce platform Shopify Inc. In March, the retailer began using 16 of 6 River’s “Chuck” model collaborative robots, or cobots, to help it handle e-commerce direct-to-consumer orders. Liberty says the switch from manual processes to “Chuck”-assisted operations has allowed it to ship more of its orders the same day they are received while keeping up with the demands of rising order volumes.
Oh, and one more thing: Turnover at Liberty’s DC has plummeted to 3% from 25% since the robots arrived, the company says. In a video about the project, warehouse workers report that the Chuck bots save them time and energy because the robots automatically sort order lists by picking zones, prioritize rush orders, and move inventory carts with motors, instead of worker muscle. As a bonus, worker training can now be completed in 30 minutes—a major improvement over the multiple-day training sessions required in the past.
RING FOR THE BUTLER
A similar story is playing out in Goodyear, Arizona, a Phoenix suburb where contract logistics services provider GXO Logistics Inc. is preparing to open a 715,000-square-foot distribution center that will serve as the West Coast operations hub for clothing retailer Abercrombie & Fitch Co. once it becomes fully operational late this year.
According to GXO, the new facility will house e-commerce, omnichannel, and product returns operations for the retailer. It also says the highly automated facility will feature automated carts, artificial intelligence (AI)-based analytics, and goods-to-person robots from automation specialist GreyOrange. The robots, GreyOrange’s “Butler” model, will be paired with “mobile stocking units” (MSUs)—portable shelves about four feet high that are loaded with multiple SKUs (stock-keeping units)—which the bots will ferry to workers waiting at fulfillment stations.
Based on GXO’s experience at other distribution centers, this combination of technologies can boost fulfillment speeds and volumes while simultaneously taking pressure off the people working alongside the machines.
“Before these robots were available, employees had to get trained on location, kind of like how you learn your way around a grocery store, and then they had to learn how to pick, and then how to get efficient at it. So, it could take a couple of months to go from ‘good’ to ‘top efficiency,’” says Bill Fraine, GXO’s chief commercial officer. “But the cobot already knows where all the inventory is; workers just scan their ID card and it takes them for a walk. And it requires less labor because in the past, they would be manually pushing a cart, which would get heavier as they moved through their pick path. The automated carts are much easier.”
In addition to cutting training time and boosting efficiency, GXO believes the robots will help create a more satisfying work environment, thereby reducing turnover, according to Fraine.
“In today’s world, we focus on how to maintain a long-term workforce, because turnover causes inefficiency and mistakes. We need to stay ahead of that,” he says. “Our [aim] is to be the employer of choice. You have to be a great employer, not just an employer that pays well. You have to make the work enjoyable, rewarding, and fulfilling, because they have choices; workers can go anywhere tomorrow and get a different job.”
As for GXO’s choice of robots, Fraine notes that his company doesn’t see the GreyOrange robots it selected for the Goodyear site as a “one size fits all” solution. Rather, the company works with clients to determine which technologies best match their specific needs, he says. He notes that at its other facilities, GXO might install robots from any of four or five other cobot vendors in its stable or choose from even-newer products it is still testing in pilot programs.
“It’s all about finding the right automation and the right process,” Fraine says. “Coming in and automating a bad process just means you have robots running around doing inefficient work. So we work with customers before applying technology solutions, whether it’s omnichannel, returns, or e-commerce.”
ROBOTS RIDE THE ECONOMIC WAVE
Inspired by robots’ performance to date, more companies are looking to warehouse technology as a way to stay afloat in an era of soaring e-commerce demand and chronic labor shortages. That interest has spurred an uptick in new orders for robots, analysts say. For example, robot orders in the second quarter of 2021 were up 67% over the same period in 2020, indicating that demand for automation is returning to pre-Covid levels as North American companies get back to business, according to the Association for Advancing Automation (A3).
“With the big increases in automation sales and favorable economic conditions in the U.S. manufacturing sector throughout much of 2021, it’s clear users have accelerated their orders for robotics and other forms of advanced technologies,” A3 President Jeff Burnstein said in a release. “While companies have long realized that automation increases efficiencies, expands production, and empowers human employees to do more valuable tasks, the pandemic helped even more industries realize those benefits. By automating—either for the first time or expanding on how they use automation—companies will be better prepared to handle any upcoming issues that [could] impact their business.”
And as more companies integrate robots into their operations, they’re finding the bots’ value isn’t limited to their goods-handling capability. It also lies in their ability to create a better workplace—thereby helping to define a future where workers and cobots complement each other’s strengths.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.