How your warehouse can be a competitive advantage

The nation’s shift towards online shop­ping at the start of the Covid cri­sis “accel­er­at­ed five years of change into just five weeks. It has cre­at­ed demand for stock that is set to last long after the pan­dem­ic.” 

That’s the pre­dic­tion of Dave Ash­well, who, as man­ag­ing direc­tor of AO Logis­tics, knows what he’s talk­ing about. Online elec­tri­cals retail­er AO has acquired more than 45,000m² of ware­hous­ing space across Cheshire and Stafford­shire in recent months, in line with many oth­er etail­ers that are invest­ing in hi-tech facil­i­ties in their effort to keep the sup­ply of goods up with demand.

AO Logis­tics’ new ware­house in Stoke-on-Trent fea­tures voice-pick­ing tech­nol­o­gy, which ensures that “the right goods are loaded in the cor­rect sequence, improv­ing speed and accu­ra­cy”, Ash­well says. “Our peo­ple wear head­sets, mean­ing that they no longer need to car­ry around a pen and paper. This leaves them with both hands free to lift items safe­ly. We hope that it will sig­nif­i­cant­ly reduce the amount of paper we use here too.”

The social dis­tanc­ing con­straints of the pan­dem­ic have also accel­er­at­ed the adop­tion of goods-to-per­son (G2P) sys­tems. The use of this tech­nol­o­gy is set to quadru­ple before 2024, accord­ing to Gart­ner.

These sys­tems fea­ture robots, which retrieve items from stor­age and bring them to a human pick­er to decide where to put them.

“You let the robot do what the robot is good at: the things that real­ly waste a person’s time,” says Dwight Klap­pich, research vice-pres­i­dent with Gartner’s sup­ply-chain prac­tice.

In the past, he says, the ben­e­fits of automa­tion were lim­it­ed, because of the high cost of the tech­nol­o­gy, the con­sid­er­able time required to imple­ment it and the fact that each machine could per­form only one func­tion. Today, though, the emer­gence of more flex­i­ble, intel­li­gent robots is mak­ing it more viable.   

“Robots are sig­nif­i­cant­ly less expen­sive and have a short­er pay­back peri­od than con­ven­tion­al automa­tion,” Klap­pich explains. “I can bring a robot in fair­ly quick­ly, set it up, test it out and eval­u­ate sev­er­al use cas­es. It can be in pro­duc­tion with­in months, if not weeks.” 

Using a mix of tra­di­tion­al automa­tion and new­er robot­ic sys­tems requires com­plex man­age­ment sys­tems. Gart­ner pre­dicts that, by 2024, half of all organ­i­sa­tions in the sup­ply man­age­ment sec­tor will invest in appli­ca­tions that sup­port arti­fi­cial intel­li­gence and advanced ana­lyt­ics capa­bil­i­ties.

One com­pa­ny tak­ing advan­tage of such sys­tems is Nestlé. Togeth­er with trans­port and logis­tics firm XPO Logis­tics, it has recent­ly opened a dis­tri­b­u­tion cen­tre in Leices­ter­shire. The site uses advanced robot­ics along­side auto­mat­ed sys­tems devel­oped in col­lab­o­ra­tion with Swiss­log. 

An auto­mat­ed mono­rail brings pal­lets into the facil­i­ty, where they are stacked by 31m-high cranes. The pal­lets are then bro­ken down auto­mat­i­cal­ly into small­er case units for stor­age. 

“One of the major ben­e­fits of this automa­tion is its abil­i­ty to make up bespoke orders,” says James Sharples, MD of Swiss­log UK. “For exam­ple, a cus­tomer may not want to order a whole pal­let of Kit Kats. It might instead want a mixed selec­tion of prod­ucts – known as a rain­bow pal­let.” 

These are assem­bled to order using a com­bi­na­tion of gantry robots and anoth­er robot-based sys­tem that Swiss­log has devel­oped. Mean­while, state-of-the-art soft­ware syn­chro­nis­es both auto­mat­ed and human process­es across the facil­i­ty, col­lect­ing and analysing data to deter­mine where refine­ments can be made.

“As we imple­ment more tech­nol­o­gy, we get more data from it,” says Andrew Shaw, direc­tor of the sup­ply chain for Nestlé in the UK and Ire­land. “We’re look­ing at how that data can be used and also at how it can be com­bined with exist­ing data to pro­vide the real-time infor­ma­tion that we need to improve safe­ty, effi­cien­cy and cus­tomer ser­vice.”

Klap­pich believes that con­tin­u­ing labour short­ages in the sec­tor will prompt greater automa­tion in ware­hous­es and ful­fil­ment cen­tres, with most large com­pa­nies build­ing diverse fleets of robots in the longer term.

“You don’t want to use a robot that can move heavy loads for in-aisle pick­ing, for instance,” he explains. “It’ll be more cost­ly to oper­ate because it has a big­ger motor and big­ger wheels – it’s going to be hefty. You want a small­er, less expen­sive robot for that task.”

Klap­pich notes that anoth­er trend in ware­house automa­tion is emerg­ing: robot­ics as a ser­vice. Giv­en that many etail­ers have a cycli­cal busi­ness pat­tern, this mod­el enables them to scale their use of robots up and down accord­ing to fluc­tu­a­tions in demand.

“For most of the year I have, say, 50 robots – and that’s good enough; it gets the work done,” he says. “But for the Christ­mas rush I could scale that up to 500. The abil­i­ty to do this as a ser­vice, instead of incur­ring a huge cap­i­tal expense, is afford­able and gives a rapid pay­back. That’s pret­ty com­pelling.”

There’s broad agree­ment among indus­try experts that, even when the pan­dem­ic is a dis­tant mem­o­ry, labour short­ages will con­tin­ue to fuel the trend towards hi-tech automa­tion in ware­hous­es and ful­fil­ment cen­tres. 

In fact, Klap­pich says, “the one chal­lenge that retail­ers face is that they have too many options to choose from in this area, not too few”.