This piece was written by Bharath Kanniappan, who is a Senior Industry Analyst with the Industrial Automation vertical at Technavio. He has more than 12 years experience in strategy and growth consulting in the fields of Industrial Process Control, Electronics and Semiconductors and Building Technologies. Bharath has driven close to 150 consulting and 150 syndicated research assignments. With his experience, he has influenced clients to develop their strategies both in terms of market expansion and organization level business targets.

Misalignment of products, delay in product identification, duplication of delivery, wrong product delivery, damage in delivered products, and underutilization of the workforce — have you experienced any of these things in your warehouse set-up? Then perhaps it is time to contact an automation and robotics solution vendor or consultant.

Gone are the days when people worked in chaotic environments in order to deliver services to their end-users. Companies are increasingly investing in multiple process streamlining and automation solutions such as robots for their process-lines. These investments have increased the warehousing company’s capabilities to address faster delivery time, accuracy, and return policies.



Process assessment, streamlining and standardization

In the warehouse sector, there are multiple entities involved in replenishing product delivery, from product suppliers to end users. In order to ensure proper product delivery, companies are investing in the development of a transparent system that works from the procurement stage to the product shipment and delivery stage. Standardization is the key to achieving a streamlined process in warehouse set-up. Warehouse organizations worldwide are turning to process engineering consultants in order to understand the workflow related to the delivery system of every single organization. These consultants study the current “As-Is Process” of the warehouse by working in conjunction with the workforce and the existing systems (both process and IT).

In the process of streamlining and standardization, the “As-Is Process” has to be developed in order to determine the “To-Be Process”. The “To-Be Process” will be developed in-line with major changes to the existing process and will prevent long waiting periods, unwanted movement of people and goods, excess inventory, over processing, and under-utilized talent. The alignment of the workflow and the standardization of the process flow will ensure that there is a single workflow from beginning to end.

In the modern business environment, automating a process will ensure that it is adhered to in all circumstances without any sort of deviation. Automation involves a set of hardware and IT enabled systems within the existing or revamped process.



Transparency in the work environment

Automating a warehouse or logistics division will support the credibility of the workflow and will ensure that there transparency in the work environment. Automating logistics set-up involves implementation of solutions like one-piece workflow, visibility to every department on the availability of the products, clear identification marking on products, and single data visibility to all entities in the organization. These criterions are achieved by creating a standardized environment in the warehouse set-up.



Where are the robots?

Traditionally, automating a warehouse involved the implementation of conveyor systems, rack management, order management, and ease of product movement within the facility. Conveyor systems were the basis of automation used for movement of goods in a warehouse. Organizations faced a major glitch in the implementation of conveyor systems due to the large space occupied by these systems. Moreover, a major segment of manual labor was used for their effective output.

In order to ensure optimum usage of space and faster product movement within a warehouse facility, organizations are currently opting for robotic solutions. With enrichments in the process flow, organizations have started deploying remotely operated and autonomous robots in their facilities to regulate the workload of employees. These autonomous systems are capable of identifying the work area, and transporting goods within the facility with or without manual support. The deployment of these robots has created a positive environment by achieving a streamlined workflow of goods from inventory, to packing, to delivery. Pick-and-place, request identification, product identification, palletizing/depalletizing, packaging and material movement are the key areas of concern for most organizations; the use of robots in these applications will not only curtail challenges, but will also enhance overall productivity.

With the global e-commerce market expected to grow at a CAGR of around 18% between 2015 and 2020, the demand for better delivery and warehousing solutions is forecasted to grow at a similar rate. Technavio estimates the global factory logistics robots market to reach $1.75 billion by 2020, growing at a CAGR of 32%. The remotely operated and autonomous ground vehicles (UGV) market, which forms a major part of warehouse automation, is currently experiencing major development and more competitors. The market for UGVs alone is expected to reach $495 million by 2020, growing at a CAGR of 13%. This growth is evident in the fact that companies like Amazon, Walmart, and eBay are implementing robots in their delivery and fulfilment centers.

The mastermind behind the robots

The growing need for automating warehouse and logistics processes has caused robot vendors to rely more heavily on software and end-of-arm tooling technologies. Robot software plays a major role in enhancing solution productivity and aids in establishing a seamless operation.

Robotic solutions vendors, apart from concentrating on developing the right hardware to meet consumer demands, are also relying on third party software developers for integration requirements. Third party software developers focus on single technology solutions. Systems developers partner with or acquire the technologies from these entities for implementation in their hardware. The main advantage of procuring outsourced information for robot vendors is significant reduction in cost.

Software is achieving an advantage over the hardware portion of robotics, mainly due to factors related to product identification, book keeping, data processing and analytics. To understand the various buying and procurement patterns of goods, large amounts of data have to be captured during warehouse set-up. This data is used for shelf re-alignment, procurement planning, packaging workflow, and dispatch scheduling, to name a few.

What’s the game plan?

Even though implementation of warehouse automation does involve a major CAPEX in an organization, the return on investment is high. For example: a single material handling robot can replace two human workers (with a salary of $7.5 per hour). The ROI of robots can be witnessed within 32 months of implementation, and can account for nearly 65% savings per year.

Given the advantages of developing a transparent system that allows for streamlined processes, a standardized workflow, ease of product identification, and error-free product delivery, there is great potential for robotics in the warehouse sector. Harnessing this potential and working towards the enrichment of software solutions for end-users will fuel the implementation of robotics solutions in this sector and beyond.

View Technavio’s Latest Robotics Reports