Warehouse Automation drivers and Trends That Are Reshaping Supply Chain Management

Warehouse Automation drivers and Trends That Are Reshaping Supply Chain Management

The supply chain industry is becoming the breeding ground for some of the most modern technological advancements of this century. It is characterized as the hyper transformation industry. Warehouses are the epicentre of distribution in the supply chain and face obstacles in maintaining safety, managing volume and continuous efficiency according to Logistics IQ.

We see substantial growth opportunities in the Robots for Warehouse Automation Online equipment space owing to several structural trends in consumer demand within eCommerce, retailing and 3PL logistics supported by incremental demand from other mature industries such as pharmaceuticals and post & parcel. The rationale behind high adoption in eCommerce and online grocery can be broadly categorized into revenue growth and cost reductions. 

Increasing market share and achieving top-line growth

Automation is a must for customer fulfillment: Meeting customer demands within e-commerce requires increased adoption of warehouse Autonomous Mobile Robots Online solutions to keep costs and operational complexity in check. Online retailing is fundamentally a logistics business driven by margin improvement from cost reduction in inventory management, order fulfillment and delivery capabilities.

Scalable solutions are needed to enable growth. Double-digit growth in e-commerce and online grocery sales is driving players to expand the capacity to deliver required volumes. Autonomous Warehousing Solutions Online are built for scale and can provide higher output and more accurate order fulfillment than a manual setup at lower operating costs and can increase the customer satisfaction as well as improve margins by reducing the delivery time as well as cutting down on the value of wrong orders.

Home-to-Shop direct connectivity: A gradual transition towards “complete connectivity” drives greater demand for warehouse automation solutions as enhanced inventory management systems, and data analytics are required to deliver on customer expectations. As the number of daily online shoppers grows across the world, consumers are migrating towards mobile platforms and have learnt to expect increasingly personalized product offerings. The growth in smart home/home automation products, e.g. automatic replenishment of a “Smart Fridge” through an Amazon Echo smart speaker, we believe is causing a fundamental shift in how customers will shop in the future. To make this shift possible, full integration of the retail supply chain is necessary.

Reducing Operating Costs and Increasing margins

Cost efficiency and quality: AI robotics for Order Fulfillment and robotic solutions are easing the increasing pressure felt by online grocery retailers to get orders out to customers more efficiently while reducing fulfillment costs. Warehouse automation solutions can both increase picking speed and volumes while decreasing picking inaccuracy due to a reduction in the number of human interactions. Besides, robots are independent of labour market conditions and can work 24/7 without requiring any overhead costs such as pensions, health insurance, vacations or breaks. They also do not require training, an extra cost associated with the additional or temporary hires necessary during the peak shopping cycles. There remains the need for capeX to be incurred at the beginning of operations, and ROI calculations are vital criteria for any retailer looking to implement warehouse automation. The ROI keeps improving as the cost of the manual trained labour force is increasing, as well as the cost of miss-pick can tend to shift customer loyalty.

Online Grocery Retail: Online grocery retail is the perfect use-case owing to the high-volume, low-margin nature of the business and the constraints involved in storing and delivering “fresh” products that typically involve temperature-controlled supply chains. Building and delivering orders that meet increasing customer demands as well as can compete with the produce available in brick and mortar grocery stores in terms of freshness and prices, puts significant pressure on the already thin margins in the grocery retail business. Warehouse automation is a perfect solution for this model, as the order picking and fulfilment process can be made more cost-efficient, enabling the retailer to compete on prices as well as offer same-day delivery.

Efficiency: The spatial savings from reduced warehouse footprints can be up to 85% and reductions in operational costs of up to 65%. Space savings are achieved primarily through storing SKUs higher and denser, and reductions in operating costs are resulting from decreased demand for manual labour.

Effectiveness: Warehouse automation solutions result in faster process times and reduced picking errors, and hence improved service levels. The speed at which an order can be accurately picked and shipped increases the reliability of the customer’s delivery service and makes operations more flexible in terms of handling late changes.

Optimization of operations: Warehouse automation solutions can be optimized through programming for continuous improvement in processes such as dynamic storage, inventory management and overnight relocation of goods. Warehouse Management Software provides cataloguing of inventory and improves end-consumers’ experience from connectivity and real-time data.

Edward Powell