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Viewpoint: Unpredictable markets, fluctuating demand, and a space shortage: The case for building better, not bigger

The only thing that’s predictable about today’s markets is its unpredictability

Unpredictable markets, fluctuating demand, and a space shortage are making the case for why AI robotics are a must for warehouse operations. (Photo: Covariant)

This commentary was written by Peter Chen, CEO of Covariant. The views expressed here are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.

Over the last few years, e-commerce has experienced explosive growth for reasons we’re all too familiar with. Logistics teams scrambled to keep up with the demand while also juggling painful supply chain interruptions; one solution to meeting the demand was to build new warehouses and staff up accordingly.

Now, following this explosive growth has been a more recent dip in demand – although we’re still experiencing historical highs. Persisting inflation may stymie holiday gift spending but no one can be sure. This tension between volatile demand and retailers’ desire for peak-season preparedness creates a challenging atmosphere for logistics professionals. Not to mention the ongoing pressure added from the worker shortage.

These factors combined become a forcing function for fulfillment leaders’ expansion decisions. Continuing to pursue capital-heavy strategies like warehouse construction and hiring pushes could be catastrophically risky for a company’s bottom line. They’re too heavily dependent upon the future of the economic markets; a situation that’s out of anyone’s control. So how do e-commerce retailers and logistics companies take back control? Do they keep building bigger? Or do they build better?

As CEO and co-founder of Covariant, an AI Robotics company, we advise companies on how best to answer this question. I’ve toured hundreds of facilities all over the world and observed the wide array of automation solutions that fulfillment leaders are using to optimize their current warehouse and labor resources.

Consider modern facilities that cost tens of millions to build. The truth is that they are still relatively inefficient. Automating with tech like conveyors and AMRs is helpful, but when throughput rates are a competitive differentiator, intelligent automation like AI robotics can be a deal maker. So if you find yourself in the position of trying to optimize warehouse throughput ahead of an unpredictable peak season, here are key considerations.

  • AI robotics is smart enough to handle the ‘hands’ part. For a while now, conveyors and AMRs have existed to automate the movement of goods from one part of the warehouse to the other – the “leg” part of the work. Meanwhile, the handling of items, the “hand” part of the work, has been largely unsolved, leaving that part of the fulfillment process vulnerable to the expense and unreliability of traditional labor. That is finally changing due to huge advances in AI. The hands, powered by machine learning, are smart enough to handle the dynamic and ever-changing nature of today’s modern warehouse preprogrammed requirements. With the hundreds of thousands of SKUs that change with seasonality along with various packaging types, this type of intelligent automation can finally pick and sort whatever comes its way – without disruption. 
  • Derisk with flexibility. Choose an AI platform that can cover all of your business’ needs today and grow into those of tomorrow. Look for a single AI platform that can power any application within your fulfillment workflows, service multiple facility locations, integrate with any type of integrator, and handle a wide array of automation levels. High-quality AI robotics solutions are adaptable. A dynamic, autonomous technology is a great match for the unpredictable.
  • Day one ROI is a must-have. As mentioned earlier, you’re considering an approach that isn’t as capital heavy as most traditional automation investments. Invest in an automation solution that will provide high throughput and accuracy from day one to further maximize your operational efficiency and protect cash flow. A flexible all-inclusive subscription model further helps protect capital cash flow. Added bonus? You should choose a vendor who will be a vested partner in your success by delivering guaranteed performance throughout the life of the system.

The future of work will continue to move away from relying on labor to handle repetitive tasks and adoption rates of automation are reflecting this shift. In a survey from earlier this year, 1 in 4 supply chain and logistics professionals are using or are in the midst of adopting such automation technologies.

As you read this, there are AI-powered robots at leading retailers and 3PLs around the world autonomously fulfilling thousands of customer orders a day with pick per hour rates recorded between 500 and 1000+ PPH depending on the use case. All with less than 0.1% of them needing human intervention. Now is the time for you to build better warehouses that automate piece-picking with modern technology like AI Robotics.

About the author

Peter Chen is CEO and co-founder of Covariant, a robotics company that has developed the Covariant Brain, a universal AI that allows robots to see, reason and act on the world around them.

Peter Chen, CEO, Covariant

Peter Chen is CEO and c-founder of Covariant, a robotics company that has developed the Covariant Brain, a universal AI that allows robots to see, reason and act on the world around them.