As logistics processes get expedited due to consumer demands and the rise of ecommerce, warehouses and distribution centers have been in a constant state of change – as automation and robotics become increasingly relevant across large swathes of their operations.
Dieter Berz-Vöge, CEO of GreyOrange in the Europe, Middle East and Africa (EMEA) region, spoke about the future of warehousing, as they evolve to fulfill customer expectations and buying patterns. “Over the last couple of years, we see ecommerce dominate the trends within warehousing – be it same-day or next-day delivery, last-mile customization, 3D printing in warehouses, or even free-of-cost returns. All this is putting pressure on warehouses, and the major driver now is to enable a flexible warehouse,” he said.
Berz-Vöge remarked that the rate of change of technological innovation in warehousing would not be a linear function going forward, but rather exponential. And this has a bearing on investments coming through to the warehouse environment, as businesses change with the channel it caters to – business-to-business or business-to-consumer – with the latter being the case of ecommerce.
“External changes also influence the product mix. Take, for example, the cereal aisle in a supermarket. Earlier, you probably had a dozen products that you could pick from, but now, you have a whole aisle for cereal. The same is true for many other product categories, and this is changing how warehouses function,” said Berz-Vöge. “The distribution models are changing as well and so is the material flow to the warehouse. All these factors drive changes in the scale of the warehouse, and they make demand a lot more volatile.”
However, to automate warehouses, it is critical to estimate demand flows and have stability in operations, as a changing landscape and unpredictable consumer behavior could mean an unforeseen increase in the return on investment timeframe.
“As your environment changes, you will not be able to realize the anticipated savings through automation – as the ratio between B2C and store retail sales keeps changing, along with several other parameters. As this happens, you will not only fall short of the savings, but you will have to spend more money to adapt to the changes in your business process and your environment,” said Berz-Vöge.
That being said, many warehouses are not as autonomous as other industries today. This is because logistics – especially warehouses and distribution centers – have been operating under the constant pressure of fulfilling customer needs and hence human labor, for the most part, has remained a flexible solution to the problem.
Berz-Vöge explained that to get automation to work, it is essential for the mobility robotic solutions to be flexible and adaptable to demand volatility. “There are different processes that need to be worked within warehouses, and most of them are highly complex tasks. Artificial intelligence can be used to orchestrate them, and to put them in a sequence of events for producing optimized results that meet different business needs over time,” he said.
To construct a flexible automated warehouse, it is important to define the different paradigms that it takes to be one. Mobility is a primary factor, as autonomous and portable systems would mean that any investment within the warehousing space would not necessarily be bound to the ground infrastructure and can be taken out in times of volatility lows.
The second paradigm, Berz-Vöge explained, would be a modular design for the robots, as that would give warehouse management independence and the ability to scale up or down, based on inventory demand. The third paradigm would be collaboration – the ability for humans and robots to work hand-in-hand to optimize operations.
Berz-Vöge contended that it would be impossible to entirely replace humans in warehousing in the near future, and thus to address productivity, it is crucial to make sure humans collaborate with robots and work in-sync with them. Berz-Vöge believed that this will lead to higher satisfaction among the workforce, improving personnel retention and helping the management leverage existing talent in the best possible way.
The final paradigm would be an intelligent software that can guide and control warehouse operations – working real-time and accommodating volatility peaks and changing demand patterns without trouble. “It is really about connecting the robots with the infrastructure and making sure we have synchronous operations across the warehouse and seamless movement of goods across the space,” said Berz-Vöge. “It is about high resource utilization and continuous improvement of operations. All these paradigms put together can create end-to-end optimization and will end up bringing a high return on investment.”