Warehouses of the future

As human civilization has evolved, the concept of warehousing goods has evolved alongside us. Thousands of years ago, the ancient Romans built large structures near rivers in order to store a variety of goods that would arrive on ships from other parts of the world docked at nearby ports.

Much has changed since the fall of the Roman Empire, including the fact that today’s warehouse facilities leverage the power of technologies that the Romans could have never dreamed of, namely cutting-edge robotics and artificial intelligence (AI), designed to improve efficiency and boost productivity.

The Key is Automation

The key to efficiency and productivity is automation: enlisting machines and computers to manage tasks previously overseen by humans. “Without exception, every warehouse interested in continuous improvement would like to implement some type of automation or expand their existing automation,” said Peter Gerbitz, system sales manager at Matthews Automation Solutions. “The degree of automation varies widely. Very small, low volume facilities may have difficulty justifying the expense (ROI). In most cases, the higher the volumes, the higher the level of automation.”

Despite the fact that automation can boost productivity, it’s not as widely embraced as one might think. “While warehouse automation is growing rapidly, the industry is still relatively early in its development,” said Gina Chung, vice president of corporate development at Locus Robotics. “According to industry estimates, less than 20 per cent of global warehouses are fully-automated today.”

That said, Chung admits the trend is accelerating, driven by acute labour shortages, rising operational costs and a growing demand for faster fulfillment. “Because of the labour shortages, many companies need to move from traditional manual operations to highly-flexible automation solutions, like mobile robotics, to meet demand, stay competitive and control operational costs,” she said.

Getting Started

While the benefits of automation are clear, getting started can be a challenge, admits Gerbitz. “While warehouses typically like to begin with something tangible and flashy, the first step should be to ensure that your data is in order,” he said. “Warehouse automation requires readily available and accurate data. How much inventory is on hand? Where is it? What orders are coming in? Once the data is stable, we can begin to look at order profiles: orders per day, lines per order, items per line. Based on this information we need to answer two questions:  what SKUs are needed and where do they need to go? Automation systems then execute on these answers.”

Clearly, warehouse managers have a lot of homework to do before implementing any solution. According to Chung, automation begins with identifying the problem that needs to be solved. Doing so will narrow your focus and help you identify the technologies and solutions that make the most sense for your specific warehousing needs.

Another key consideration is where to begin the automation process? Determining where a warehouse will see the most bang for their buck. “Many warehouses start with automating their order picking and fulfillment operations, often the most labour-intensive, costly and time-consuming task,” said Chung. “Deploying AMRs (autonomous mobile robots) to assist human pickers, for example, offers an immediate productivity boost and a fast return on investment without needing to fully redesign the warehouse and spend millions upfront. In addition, it helps improve worker ergonomics, safety and even retention. It’s a logical, scalable first step that allows facilities to gradually expand automation throughout the operation.”

Innovations in Technology

While warehouse automation isn’t a new or novel idea, we’re seeing new technologies emerging with innovative features and advanced capabilities. Innovations like AI-driven robotics, fully automated fulfillment systems and orchestration software are rapidly reshaping warehouses, Chung explained. “We’re also seeing strong interest in solutions that integrate physical AI – the merging of physical robotics and the latest advances in artificial intelligence – to make warehouse operations smarter, more adaptive and increasingly autonomous.”

Locus Robotics recently introduced LocusINTELLIGENCE, a data science and analytics platform that uses AI to deliver real-time operational insights to optimize warehouse performance. “It provides operators with actionable dashboards, predictive analytics, and performance benchmarking, helping operators make smarter, faster decisions,” said Chung. With this new technology, Locus hopes businesses will gain full visibility into productivity trends, workflow efficiency and ROI metrics, facilitating continuous improvement across their operations.

Accuracy and ROI Benefits

While we often think of warehouse automation as a way to reduce the number of employees needed to get the job done, Gerbitz noted that in today’s business environment, that’s not always the goal anymore.

“In the past, reduction in headcount was desirable,” he said. “Currently, because labour is more difficult to find, distribution centres need to do more with less. Instead of reducing headcount, they need to make the operation work with a limited labour supply. All of this contributes to maintaining and increasing throughput with the same number, or fewer employees.”

Accuracy is another critical component to consider. “In the case of a mis-pick, this can lead to costly returns or lost customers,” he explained. “In a manufacturing environment, incorrect components can lead to downtime. These have costs.”

Finally, Gerbitz explains that the data collected can also contribute to ROI. “Acquiring data throughout the fulfillment process can streamline other processes related to lot tracking, serial number capture, and item validation,” he said.

When calculating ROI, Chung noted that it’s important to look at how automation improves efficiency, throughput and accuracy while reducing labour dependency and operating costs. She added that ROI can be calculated through a combination of factors: faster order fulfillment, fewer errors, better space utilization, lower turnover costs and reduced overtime or sick leave expenses. When considering all of these factors, customers can see productivity improvements upwards of two to three times what they would achieve purely through manual operations, simply by utilizing these automated solutions.

Man vs. Machine

Unless all warehousing tasks are performed by robots and computers, there’s always going to be a need for cooperation between employees and their non-human counterparts. Furthermore, whenever man and machine work together, safety becomes a key concern.

Chung agreed that collaboration and worker safety are critical for successful warehouse automation. “Robots that are designed to work alongside humans, augmenting their capabilities rather than replacing them, need to be safe and not intimidating,” she said. Locus focused heavily on making their robots user friendly with an approachable training process, not only saving time and resources but ensuring easy-adoption by workers.
As we think about the future of warehousing, we may well wonder whether we’ll see the day when humans will no longer have to work with robots or machines. In other words, will we see the day when all warehouses are fully-automated, and where humans are no longer needed?

According to Gerbitz, we are already there. “Fully-automated ‘lights out’ facilities exist today,” he said. While that may be true, Gerbitz notes that there’s a major caveat to consider. “This requires a very high level of product consistency (i.e. predictable and consistent shape and size). As automation improves, handling of exceptions and irregular items will be better handled by automation.”

That said, Gerbitz believes that there will always be a place for humans in the process, although the role humans play will continue to change over time.

Chung agreed. “The warehouse of the future will be highly-automated, but humans will still play a vital role,” she said. “Automation will handle the repetitive, physically-demanding tasks, while humans will focus on problem solving, managing operations and optimizing workflows. The future is about finding the perfect balance between human capability and machine efficiency.”