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Warehouse Automation – The Need of the Hour for Logistics Industry

Logistics IQ

One of the biggest challenges facing the logistics industry today is labour availability. Research shows that 80% of current warehouses are manually operated with no supporting automation.

One of the biggest challenges facing the logistics industry today is labour availability. It’s not easy for companies around the world to find enough high-quality employees to move goods from suppliers to customers. Two competing factors are making this especially difficult and are driving smart warehouse market: The first is an increasing need for more logistics workers and this is being driven by the e-commerce revolution and its need for more parcel shipments; the second is a decline in the size of the available workforce due to shrinking population levels in the Western world.

This growth directly affects the requirement for logistics labor since online retail typically needs more labor per item sold than traditional brick-and-mortar retail. This is because, instead of moving merchandise to a retail store in bulk, the organization must pick and pack online purchases individually by hand. Freight and parcel handling labor goes up as well since these goods must be shipped as separate parcels to be delivered directly to consumers’ homes. Added to this, the average weight of these shipments is increasing as consumers can now order large items such as white goods, building supplies, and even furniture online. For the first time in history, future populations will be smaller than past generations in the mature markets. A recent study by BCG shows that over the next fifteen years Germany alone could see a labor deficit up to 10 million workers. This shortage of labor and skills is driving the smart warehouse market worth $27B by 2025.

Since 1948, the US economy has grown at an average pace of 3% per year. If this trend continues and with the current rate of productivity, over the next thirty years the US will need 35 million more workers than will be available. How will companies fill this labor gap?5 Even today employees are being asked to work additional years and retire later due to staff shortages, but logistics is a difficult occupation for an already aging workforce.

To combat these challenges, the managers of tomorrow’s supply chains will need to either continue to raise costs while reducing service or will need to compensate with automation that can support workers and increase productivity. Today’s current material handling automation solutions have helped to ease and postpone this challenge but in many cases the solutions are just not flexible enough to cover all of the requirements of a dynamic supply chain.

Research shows that 80% of current warehouses are manually operated with no supporting automation. These warehouses have dealt with demands for increased productivity and throughput by supporting existing workers with good layout design, mobile material handling equipment, and constantly improving IT.

Traditional Method

Fully Automated

Some 15% of our current warehouses are mechanized. In addition to the technology used in manual warehouses, these distribution centers also use some type of material handling automation such as conveyors, sorters, goodsto-picker solutions, and other mechanized equipment to further improve the productivity of the existing workforce. While some of the components of these systems (ASRS / AGVs / shuttles) could be accurately considered as a type of robot, they are generally not in the same category as the robotic systems discussed so far in this trend report. The research finds that just 5% of current warehouses are automated and there is a huge adoption required for smart warehouse market.

The reality today is that these automated warehouses are typically highly mechanized environments that still employ people in key functions. An example would be a modern sorting center which has much higher productivity and accuracy than in previous generations. Even with all of this advanced technology, in large sorting hubs there may still be more than 1,000 employees who spend their time loading and unloading trucks, handling parcel ULD containers, and manually sorting odd-sized items.

A traditional warehouse employee typically spends most of his or her time walking around the warehouse to gather all of the items for an order. In a manual Amazon warehouse, a picker might walk between seven and fifteen miles per shift. As previously mentioned, to save labor by reducing the time spent walking, Amazon bought the company Kiva that builds mobile robots. These robots can pick up a shelf of goods and bring the entire shelf to the picker who stays in one spot, effectively turning these humans into stationary assembly line workers. After the picker selects the needed items, the shelf moves away and a different shelf arrives to take its place. This so-called goods-to-picker concept can be found in several technologies on the market today such as Swisslog´s CarryPick mobile system. It is possible in some cases to save 50% of warehouse picking labor with these systems through the elimination of walking. Currently, most of these systems are very capital intensive, requiring a network of connected shelves, tracks, robotic shuttles, elevators, and conveyors. Even after this investment, they still require a significant number of people to pick items from an automatically presented plastic tote or mobile shelf.

While these systems save walking, a relatively large labor force remains doing the very repetitive task of picking objects from one container and placing them into another. The companies that make the large goods-to-picker material handling systems have seen this problem as an opportunity to introduce robotic arms into their systems. An example is the German company SSI Schaefer that offers a product called Robo-Pick. This is a typical stationary industrial robot that is bolted inside a traditional robot work cell. The robot uses a camera to identify items in a plastic tote which has been delivered to the work cell by one of SSI Schaefer’s large automated tote storage and retrieval systems. Once the robot has located an item, it picks the product up and places it on a small buffer conveyor that will ultimately deposit the item in a separate transport tote. SSI Schaefer claims that its robot can pick up to 2,400 items per hour depending on product characteristics and order profile but it is just a part of automation as far as big opportunity of smart warehouse market is concerned.

Similar systems have been developed by the companies Knapp and Viastore. Knapp’s system can automatically change its vacuum cup gripper to better match the product, while Viastore’s system not only picks an item but can also place the item into a final shipping carton as well.

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