Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Talk of automating a distribution center (DC) can mean different things to different people, but in the end, it’s all about making DC operations run more smoothly and efficiently. At its most basic level, material handling automation helps free employees from mundane, manual tasks and allows them to focus on value-adding work or jobs where only the human touch will do. This has become an increasingly important advantage in the labor-challenged post-pandemic supply chain, and one that is changing the look and feel of the distribution center.
A recent Gartner survey points to a growing supply chain trend toward “flexible” automation solutions in particular, predicting that three-quarters of large companies will have adopted some form of “smart” robots for warehouse and DC operations by 2026. These are advanced robots or robotic systems that use intelligence, guidance, or sensors to operate independently or with and around humans. Examples include autonomous mobile robots (AMRs), autonomous forklifts, and similar solutions that require little or no infrastructure investment. Essentially, they’re not bolted to the floor, as traditional systems are.
Many companies are already testing the waters, however, and are racking up labor-savings and productivity improvements as they go. Here are two ways flexible robotics are changing the look and feel of the DC.
CHANGING THE LANDSCAPE
Automation strategies are having a considerable effect on the logistics real estate market, both in terms of facility design and location. With respect to design, today’s DCs require increased power capacity and higher-speed internet connections to power systems and charge equipment—and some may even require extra space to store charging equipment or higher ceilings to accommodate automated vertical storage systems, vehicles, and other types of machinery, according to Ben Harris, senior managing director of the logistics and industrial team for commercial real estate firm Cushman & Wakefield.
Research from real estate services provider Savills Industrial Practice Group, released late last year, highlights those trends as well. The company said it expects more facilities to be retrofitted or designed to accommodate investments in automated technologies in 2022. The report noted that the average clear height for large warehouses has already increased by 23% to 37 feet since 2000, and that heights will grow as advances in robotics allow tenants to take greater advantage of vertical storage.
When it comes to location, flexible robotic solutions are giving companies a wider playing field for developing their distribution networks.
“Automation is enabling greater choice” in where DCs can be located, Harris explains. “Most types of automation can be incorporated into any modern facility we have, [but] the automation solutions with the highest chance of adoption are those that are more flexible, more mobile, and less tied to the physical characteristics of the buildings than they were in the past.”
As an example, Harris says flexible, smart automation has allowed some companies to expand their DC operations into regions with limited labor pools by reducing their reliance on people—robot-assisted picking is one example. This can be helpful for companies looking to locate distribution and fulfillment operations in important, but less densely populated, markets, for one.
“Before, the labor situation [in some regions] could be so bad that a company couldn’t consider a particular location for a warehouse or distribution center. But automation addresses that problem for some,” he says. “It allows some companies to enter markets they never thought possible.”
On the flip side, the use of AMRs and similar labor-saving devices can open up opportunities in urban markets where labor is more plentiful but competition for talent is stiff and employees are expensive—such as New York City. The automation advantage can be especially helpful for e-commerce businesses looking to improve their final-mile logistics operations.
“Automation is allowing some companies to unlock infill [sites located in mostly built-out markets] in urban locations where labor costs have been major hurdles,” Harris adds. “Near metro environments, we’re seeing even more automation, because the need for speed is that much higher within those geographies. Additionally, the options for labor become much more constrained; you’re competing with totally different industries [for talent] in those markets.”
GETTING CREATIVE
Flexible automation is also pushing creative boundaries in the DC, as technology providers and customers work together to find new and unique applications or “use cases” for technology—especially robots.
“Feedback we hear from customers is ‘We don’t just want the robot; we want a solution,’” says Stefan Nusser, senior director of robotics automation for Zebra Technologies, which develops autonomous mobile robots (AMRs) and collaborative robots for industrial applications. Increasingly, such solutions are being driven from within, he adds. “When you go into a site, you’ll see many opportunities for robots. Often, customers will say ‘Isn’t this cool; look at what we made them do.’ And that kind of thing happens organically, from the bottom up.”
A case in point: Zebra Technologies’ Fetch Robotics autonomous recycling removal solution, which was developed in conjunction with a third-party logistics service provider (3PL) that had adopted Fetch AMRs to help streamline operations in one of its DCs. [Fetch Robotics became part of Zebra Technologies in a 2021 acquisition.] The 3PL had a problem that was piling up: Empty boxes and excess packing material were accumulating in aisles and at the ends of pick stations faster than employees could safely transport them to a separate recycling area within the DC. Looking to clear floorspace for both workers and the robots moving throughout the facility, the employees programmed the AMRs to pick up the boxes and packing material and take it to the recycling area—a task that was previously done manually.
“We have a robot that, essentially, has the ability to move a cart from one location to another,” Nusser says, explaining that the employees put collection bins on top of the AMR-compatible carts, set them up at a handful of collection points throughout the DC, and then used the accompanying AMR software to tell the robots what to do. “Every half hour, the robot grabs [the carts] and brings them to the recycling area, then brings them back.”
The easy-to-configure software allows employees to change the frequency of removal, if needed, as well as add locations or containers. What used to require multiple employees doing nothing but recycling removal all day is now automated, freeing up those workers for more value-adding work.
“In a way, it’s the perfect solution,” Nusser says, adding that the process has opened the floodgates of ingenuity, as associates think of ways to apply the labor-saving technology to other tasks as well. “Many times, what you do with the AMR is just as hard a question to answer as how do you make the technology work. For [the customer], this is now another tool in their toolbox.”
A simple, tech-driven tool that has changed the way the DC works, for the better.
The Gartner survey likewise points to the adaptive nature of such tools, noting that other common uses for flexible robots include transporting pallets of goods, delivering items to a person, or carrying out piece-picking tasks. Those applications will only increase, contributing to an even more dynamic DC.
“They [flexible robots] can more readily and inexpensively be implemented, and can be easily scaled to better manage extremes in peaks and troughs of demand,” according to the Gartner report. “Because of the adaptive nature of intralogistics smart robots, companies can pilot use cases for low, upfront investment and continue to test new and varying use cases as they become more familiar with the technologies.”
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.