COVID-19 has increased the emphasis on supply chain to meet demand requirements which has hastened the pace of adoption of technologies in warehouses both in terms of automation and autonomy. The endless options and solutions available for innovative applications make the selection process overwhelming. Warehouse executives cannot just invest in all automation and autonomy solutions. The right level of automation and autonomy will not only enable faster, safer, and more efficient day-to-day warehouse operations. It will also cut costs and improve delivery times, creating a faster, leaner, more scalable, and more sustainable operation.
Recent logistics disruptions and operational challenges have demonstrated the critical importance of robust supply chains. In the quest for greater resilience, companies are now looking for ways to boost their warehouse and distribution operations’ speed, reliability, flexibility, and productivity. Automation has emerged as the answer. It promises to help organizations tackle pressing supply chain problems: addressing labor challenges, improving fulfillment quality and safety, maximizing space utilization, and increasing throughput.
Advances in computer vision, machine learning, and AI are increasing warehouse robots’ capabilities, too, with the latest models able to plan their best routes and pick sequences while navigating autonomously in complex environments. The robotics market is becoming more dynamic, with established warehouse automation players competing alongside many startups offering specialized solutions or highly flexible general-purpose robotic systems.
The success of a warehouse automation strategy hinges on skillfully integrating people, processes, and systems to the right degree. However, since every warehouse has its purpose and range of functions, depending on the supply chain model, these movements and processes can be wide-ranging and complex. The combination of variables such as size, scale, velocity, number of stocks keeping units (SKUs), etc., all contribute to the level of complexity of operation in the warehouse, and as the workforce must continuously navigate this maze to get products out to delivery. A one-size-fits-all solution simply would not work.
Leading retailers are aiming to make warehouses responsive, resilient, and reliable to accommodate the ever-growing e-commerce market and incorporate lessons from the global pandemic. Along with improving existing warehouse capabilities and enabling new nodes of fulfillment (such as urban fulfillment centers), they view warehouse automation as an important part of the solution. In a recent McKinsey survey retailers across apparel, grocery, and other key sectors, more than 80 percent of respondents indicated they intend to increase automation investments over the next two to three years.
McKinsey report envisions three warehouse archetypes that will inform the design of automation systems: dedicated, shared, and integrated omnichannel. These archetypes can help retailers narrow down the set of use cases and solution sets and better understand the complex choices among automation providers, integrators, and start-ups.
Dedicated warehouses are tailored for specific channels, product flows, or types, aiming for scale and cost efficiency. They range from large national facilities to smaller urban centers, using specialized automation for improved space and labor efficiency. Examples include Amazon Go for retail fulfillment and Zara for national e-commerce.
Shared warehouses serve multiple channels or product segments under one roof, with independently managed inventories. They offer flexibility, efficient space use, cost savings from consolidated labor, and inbound consolidation benefits. Integrated omnichannel warehouses seamlessly serve all channels with a common inventory pool, offering flexibility and reduced inventory-carrying costs. They use hybrid automation solutions to meet different channel requirements, such as fast fulfillment for online orders and larger, slower shipments for stores. This type is ideal for stores ordering individual items, enabling efficient space use and scalable automation.
Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor & MEGA Tech