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.
It’s hard to find workers these days, especially in the ultra-labor-intensive warehouse. Many companies are turning to technology to solve the problem, implementing various automated warehouse solutions to narrow the resource gap—from robotic goods-to-person picking systems to cycle-counting drones and everything in between. Many are also looking to their forklift fleets as potential sources of labor optimization, finding that advances in automated guided vehicles (AGVs) and autonomous mobile robots (AMRs) can help boost productivity and reduce worker fatigue, ultimately allowing them to reallocate scarce labor to other warehouse tasks.
“I talk to operations managers for different customers [and] facilities all the time, and some of them say they are buying this equipment because they just cannot get enough people to get product out the door,” explains Martin Buena-Franco, manager of product marketing for automation at The Raymond Corp., which manufactures a wide range of material handling equipment, including AGVs. “It’s not an exaggeration. They’re in a situation where they need bodies, people, help. Labor shortages, in some areas, are very real. They’re trying to figure out ways to move product through the facility.”
Norm Saenz, partner and managing director at material handling consulting firm St. Onge Co., agrees and adds that labor optimization via automation is a major part of most facility design projects these days.
“The big difference in the last few years is automation being [included] on almost every project—and the idea of really trying to put AMRs or AGVs in existing facilities to remove labor,” Saenz says.
That trend is likely to continue as equipment gets better and better. Improved mapping and navigation systems, the application of artificial intelligence (AI) and machine learning (ML), and greater ease of integration into warehouse IT systems are some of the attributes that are making automated forklifts an attractive solution to today’s labor and throughput problems.
MARKET TRENDS DRIVE DEMAND
It’s no surprise that interest in automated forklifts is growing. More than three-quarters of supply chain and logistics leaders say they are experiencing “notable workforce shortages in their operations,” according to a survey of 1,000 industry business leaders published in January by supply chain technology company Descartes Systems Group. Nearly 40% of those surveyed say they would characterize the situation as “extreme,” with more than half—56%—citing the warehouse as one of the areas most affected by labor shortages, second only to transportation operations (61%).
Those numbers help explain why industry watchers expect to see an increase in demand for automated warehouse equipment and systems over the next few years. This follows a recent pullback from the heavy investments companies made during 2020 and 2021, when the Covid-19 pandemic created labor shortages and soaring e-commerce activity that spurred a buying spree among many companies. The research firm Interact Analysissaid last year it expects investments in warehouse automation, including mobile robotics such as AMRs and AGVs, to increase slightly this year and return to high growth rates in 2025 and beyond.
Anecdotally, Buena-Franco says warehousing and logistics has suffered the least from the automation pullback of 2022 and 2023, noting that Raymond has been seeing a steady rise in demand for AGVs among that customer base since before the pandemic. He says robotics suppliers are sounding more upbeat as well, noting that those attending a January meeting of the Association for Advancing Automation (A3) were optimistic that sales will increase this year. A3 is a trade group representing companies in the robotics, machine vision, motion control, and industrial AI industries.
Together, these labor and automation trends are making AGVs and AMRs an increasingly attractive option for warehouse managers looking to get the most out of their workforce and keep operations humming. In fact, a separate 2023 study from research firm Statista estimates that the U.S. AGV market will grow at a compound annual growth rate of nearly 7% between 2022 and 2027, reaching a size of more than $3 billion.
“[Worker] shortages are not the totality of it. Some companies are looking for ways to optimize efficiencies,” Buena-Franco observes, noting that AGVs run more consistently than manually operated trucks, so the switch can give warehouses an immediate increase in throughput and productivity. “AGVs operate, if not 24/7, pretty close to that. … Our experience with manually operated trucks [is that] a truck running an eight-hour shift isn’t running for eight hours.”
Tightening up those forklift operations can create a domino effect that leads to even more efficiencies within the four walls of the warehouse.
“Implementing a fleet [of automated forklifts] in a given area opens up opportunity to take people [who were] working on that task and reallocate them upstream or downstream to smooth out bottlenecks,” Buena-Franco adds.
One sticking point with adopting automated equipment is the return on investment (ROI). Many companies find it difficult to justify the high cost of the vehicles and related installation and maintenance costs, especially given today’s high interest rates.
But there’s an often-overlooked factor in calculating ROI that may make a difference. Buena-Franco points to hiring and training expenses and the often-high employee turnover rates in warehousing and logistics—factors that can cost companies big in both investment dollars and lost productivity. He says automation can offset some of those expenses in the long run.
SMARTER EQUIPMENT, EASIER INTEGRATION
There’s another reason behind the growing interest in automated material handling equipment: Advanced technologies are making automated and self-driving forklifts safer and easier to use. Both AGVs (which operate on a predetermined path) and AMRs (which move independently throughout a facility) are getting better thanks to the use of telematics—which allows managers to collect and analyze data from fleets of vehicles—and the application of AI and machine learning.
“What really stands out for me is that the navigation and mapping continue to get better every day,” Buena-Franco says. “You have better fields for detecting [objects] and a lot more data points [to analyze].”
That’s because robotics companies and equipment manufacturers are employing the latest sensors and light-detection technologies, which allow users to create better digital maps of the warehouse environment. That makes it easier for the forklifts to avoid obstacles and adapt to changing conditions on the floor. On top of that, the addition of AI and machine learning algorithms allows the equipment to learn from experience and, thus, get “smarter” all the time.
Today’s automated forklifts can also more easily integrate with a facility’s warehouse management system (WMS) or labor management software, allowing for better orchestration of all the equipment and systems running throughout the facility. Such broad integration can help companies better allocate warehouse tasks, such as sending the right work order to the right vehicle at the right time or deploying people to certain areas of the warehouse when needed—all of which promotes a more efficient, smoother-running operation.
“We have so many clients looking at automation, and we’re building pretty good business cases” for it, Saenz, of St. Onge Co., adds. “There are more vendors, more options, and prices are more competitive. [Companies] want automation, and they want advancement. And the demand for removing labor is real.”
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”