Amazon is on the verge of a revolution in the supply chain

196
5
Amazon is on the verge of a revolution in the supply chain

Amazon warehouse workers might have new recruits soon, named after the pair of muppets in the US educational television series Sesame Street, Ernie is a robot with a robotic arm that delivers containers to staff, reducing strenuous reaching and bending, while Bert is an autonomous mobile robot that can be summoned to carry items.

The US retail and logistics colossus has taken a head- and shoulders lead in warehouse automation, a market that is expected to double by 2025 to $68 billion, according to consultancy Interact Analysis.

Since the outbreak of the pandemic, chronic labour shortages and complexity of ecommerce have accelerated the uptake of automation, transforming it into a critical issue for competitiveness, according to analysts.

Tom Bianculli, chief technology officer of Zebra Technologies, an Illinois-based company that produces wearable computers, rugged scanners and industrial printers for warehouses, said the labour crunch has prompted a shift in thinking in company boardrooms about automation in recent months.

He said automation is not about return on investment, it is about continuity of business and recalls recent conversations with executives. I can't realise my revenue unless I close my labour shortage. Supply chain managers are looking at new technologies to take the pressure off their workforce.

One of the technologies used in automated forklift trucks is said to be a technology used by the global chief information officer and chief operating officer of DHL Supply Chain, which is the logistics contracting arm of the international courier group, which is aiming to automate a third of its 20,000 machines in the world.

He says there is a huge shortage of labor in all of our markets. I believe that this problem is not going to disappear. Adhish Luitel, an analyst at ABI Research, says that another area of huge growth is in micro-fulfilment centres that use robots on rails, like those used by online retailer Ocado or AutoStore, its Norwegian competitor, which was recently listed in Oslo.

Supply chain managers are now focusing on integrating all the different robotics and automation technologies with data to better predict demand and use robots and humans on the most urgent tasks.

In order to promote a common software platform for robots that many vendors can plug into, much like Android became the operating system for many smartphones, according to an analyst at Gartner.

He says that a lot of smart people are looking at what the robot platform looks like. It depends on if one of the big tech companies wants to make a robot operating system. While robots speed goods through warehouses, external problems - such as truck driver shortages - have put the logistics industry under strain.

An important factor in making sure that automation is productive is pairing warehouse automation with other links in the supply chain, as self-driving lorries are still years away.

Thomas Evans, Honeywell Robotics chief technology officer, says technologies such as 5 G, connected cities and vehicle-to- vehicle communications could help orchestrate the higher throughput of automated warehouses with the arrival of trucks to bring and take the goods away.

There are still other obstacles to progress despite the excitement about deploying robots.

The sector is currently stuck in the Victorian era with an estimated three-quarters of warehouses worldwide without automation because large conveyor belts and fixed infrastructure became too expensive.

Amazon bought Kiva Systems in 2012 and shook the market because the Massachusetts-based group stopped selling its robots to new customers or servicing those already in service, as per a senior analyst at Interact Analysis.

He says that many fear that a big company like Amazon could acquire a mobile robot company, making customers hesitant to invest while the market is in such a nascent state.

The sheer growth in ecommerce has also given retailers a boost to the ecommerce industry.

Joe Daft, head of robotics at Wise Robotics, a British manufacturer targeting smaller businesses, says that automation is an obstacle because of the fact that automation is priced prohibitively.

He says it is a mindset thing that business owners are intimidated by the prospect of automation. There isn't a single company that knows what they want. He believes that the pandemic has spurred change. He says that there has been a generational change at smaller businesses over the past 18 months.

That tailwind comes at a time when few people don't predict a let-up in the labour pressures that are driving automation.

Ageing populations in advanced economies, tighter immigration rules, growing demand for flexible working arrangements, and the march of the on-demand economy all make it hard to see how worker shortages will ease off.

Rick Faulk, chief executive of Massachusetts-based Locus Robotics, said Covid put a spike in it - the genie in the bottle is not going back any time soon, and plans an initial public offering in the next 12 to 18 months. The gig economy is sucking labour out of the logistics business.