Just a few years ago, automated logistics in warehouses was more of a nice-to-have than a necessity. For example, in a 2016 report on Robots in Logistics, Deutsche Post DHL Group shared research indicating that 80% of warehouses were manually operated with no supporting automation.
Fast-forward to today and the situation has changed dramatically with the impact of the pandemic. High-performance, automated logistics are no longer a nice-to-have in warehouses. They’re now essential to drive the productivity and efficiencies needed to meet demands, lower costs and improve business resiliency:
- According to this year’s MHI and Deloitte supply chain survey, 49% of supply chain leaders have accelerated spending in digital technologies to make their operations more responsive and forward-looking during the pandemic.
- ABI Research projects that more than 4 million commercial robots will be installed in more than 50,000 warehouses by 2025.
New e-commerce trends put high demands on warehouse operations
The rapid growth of e-commerce over the past couple of years has dramatically accelerated the need for warehouse automation as well. While our reliance on e-commerce had been steadily rising over the last decade, the onset of the pandemic in early 2020 intensified that reliance almost overnight.
Suddenly, e-commerce was the only way to access goods that weren’t considered essential to everyday life. And, even if people were allowed to shop for items in person, they didn’t always feel comfortable doing so, and chose to order online.
According to the United Nations (UN) 2021 COVID-19 and E-Commerce Global Review, e-commerce was responsible for 17% of global retail trade in 2020, up from 14% in 2019. This growth came despite the fact that global trade in goods fell 9% during that same period.
E-commerce activities in the United States strongly reflect the global trend. For instance, e-commerce research company Digital Commerce 360 reported that U.S. online retail sales increased 32.4% year over year in 2020—leading to an additional $105 billion in online revenue. The trend continued in 2021, as e-commerce sales grew 39% in the first quarter of the year. With these dramatic increases, the company estimates e-commerce has been accelerated by two years.
While online retailers were no doubt happy to experience such positive business growth, very few of their warehouses were equipped to accommodate the sharp rise in demand. Ongoing staff shortages compounded the problem. As a result, warehouse operators were almost universally challenged to meet demands, while maintaining staff safety and job satisfaction.
E-commerce trends are very likely here to stay
Recent data suggests several pandemic-driven e-commerce trends will continue longer term. In early 2021, for example, the EY Future Consumer Index reported that U.S. consumers were still changing the way they shop, with:
- 60% visiting brick-and-mortar stores less often than before the pandemic
- 43% shopping more often online for products that they would have previously bought in stores
The UN COVID-19 and E-Commerce Global Review shared a similar outlook, stating that 50% of consumers expected to continue shopping online more often than they did before the pandemic.
Automating logistics accelerates business
As evolving consumer behaviors and staffing challenges continue, more companies in the e-commerce value chain are recognizing that digital transformation and automation are key to business continuity and competitive differentiation.
According to the MHI and Deloitte survey, supply chain leaders have accelerated spending in digital technologies such as cloud computing, robotics, and inventory and network optimization tools to:
- Respond more quickly and effectively to immediate challenges
- Recover from disruption faster than the competition
- Create sustainable competitive advantages
With the razor-thin margins in e-commerce, every opportunity to automate systems and work in a more agile and responsive way to accelerate inventory turnover time helps the bottom line.
Consider picking operations: these tasks consume more than 50% of order fulfillment times, but only 25% of that time adds any value. The rest of the time is spent walking, searching for items and completing reports. With automated picking and sorting systems, modular conveyors and automated storage and retrieval systems (AS/RS), picking operations become much more efficient and orders are fulfilled faster.
When warehouse staff are freed from repetitive, manual tasks such as picking, they can spend more time on strategic, value-added tasks that further accelerate operations.
As goods arrive at, and leave, warehouses, automated solutions can also be used to scan barcodes and radio frequency ID (RFID) tags on individual items, and on entire pallets of goods. With these types of solutions, goods move through each stage of the logistics process faster, and with less manual intervention. And because everyone always knows the exact location of inventory, there’s no need to waste time searching for items or information.
The data from automated scanning systems can be fed into analytics software that monitors order fulfillment times and other key performance indicators (KPIs). This insight is essential to reveal new opportunities to optimize the end-to-end flow of goods throughout the warehouse.
With autonomous mobile robots (AMRs), warehouse operators can take an important step toward zero-touch logistics for even higher productivity gains. These faster, more advanced robots are the next-generation wireless version of autonomous guided vehicles (AGVs) that move goods through a warehouse or distribution center. These AGVs rely on video, LiDAR laser sensing and simultaneous localization and mapping (SLAM) technologies to freely navigate, and fulfill orders as well as transport goods throughout the facilities.
The examples provided above are just a few of the ways automation helps make warehouse logistics faster, more agile and scalable. There are many additional opportunities, such as using:
- Artificial intelligence and machine learning technologies to optimize inventory management
- Augmented reality heads-up displays for vision picking and instant access to data and other information while people are moving through the facility
- Warehouse management systems with real-time inventory tracking that’s tied into ordering systems to maintain optimal inventory levels
- 3D printers to create parts to order
- Smart storage systems that optimize where goods are stored based on ordering trends
- Order-flow software that streamlines logistics operations
No matter which digital automation solutions are adopted, the end goal is to have all sub-systems within the warehouse talking to each other to provide a comprehensive view of operations.
Supporting automation requirements today, and tomorrow
Despite any differences in ways to automate, all of the warehouse examples described above have one thing in common: they all rely on consistent, high-performance wireless connectivity throughout the facility’s indoor and outdoor areas.
Today, many warehouses and distribution centers still rely on Wi-Fi connectivity to run their operations. Unfortunately, Wi-Fi can’t provide the reliable, industrial-grade connectivity needed for digital transformation and automation. The high demands in industrial environments exceed its capabilities, especially when applications rely on large numbers of sensors and video feeds.
Applications that rely on Wi-Fi connectivity can unexpectedly stop working, or work intermittently, causing unpredictable behaviors, downtime and outages. In addition, Wi-Fi’s limited coverage range makes it very challenging to bring consistent, high-capacity wireless coverage to all indoor and outdoor areas of large-scale facilities.
Private, industrial-grade LTE and 5G wireless networks resolve all of these connectivity issues. However, until fairly recently, it wasn’t possible for a company to deploy its own wireless network. Companies simply didn’t have access to the spectrum, solutions and services needed to put the network to work for their business. Now that situation has changed, and all of the required elements are in place:
- Wireless spectrum is available from governments looking to support enterprise digital transformation, service providers looking for new business opportunities and by using new wireless technologies, such as MulteFire.
- Product choices are rapidly expanding with new devices and sensors that enable smarter, real-time operations that drive evolution to Industry 4.0.
- Industrial automation original equipment manufacturers (OEMs), cloud providers and network vendors are collaborating to develop new solutions that help companies in manufacturing, supply chain and logistics achieve their digitalization and automation goals.
- Professional services, consulting and technical support ecosystems provide the services companies need to deploy private wireless networks throughout warehouse facilities.
In most cases, a private LTE and 5G wireless network provides better total cost of ownership compared to Wi-Fi networks, and are certainly better than deploying four or five network technologies.
Whatever approach warehouse operators choose, they must think carefully about their long-term goals, carefully consider all options and opportunities, and develop an implementation strategy that will support their automation requirements today and tomorrow.
