NextGen Supply Chain: Robotics at a Tipping Point

“There's something happening here,
What it is ain't exactly clear”….Stephen Stills

Over the years, I've watched the adoption of any number of new technologies, from WMS to voice recognition systems to shuttle systems. In all three examples, technologies that we take for granted today were, in reality, fairly slow to become part of what Jim Rice at MIT calls “the dominant design” - just another tool in the tool kit.

I'm going to go out on a limb, but I'm now convinced that robotic materials handling is at a tipping point in materials handling, and it feels as if the adoption rate is about to take off.

Over the last two years, we've featured a variety of robotic applications, ranging from piece picking robotics at an eye wear manufacturer; mixed layer palletizing at L'Oreal; mobile robots in manufacturing at GE Healthcare and Whirlpool; a piece picking robot in order fulfillment at Rochester Drug; a collaborative mobile robot from Locus Robotics at Quiet Logistics, and robotic distribution at Medline. In the March issue of Modern, we are featuring DHL Supply Chain's strategy for mobile robots in order fulfillment purposes, including its use of Locus.

In fairness, you could argue that it's probably been ten years since Kiva first exhibited at one of our trade events. How is this different? I think it's different in two important ways.

The first is the over-night emergence of one start-up after another, thanks to funding that is pouring in from an investment community that previously ignored our space. The second is a convergence of factors outside of the four walls of the DC that are impacting what goes on inside the four walls. To paraphrase Stephen Stills, it's not exactly clear, but something is definitely happening here.

For me, the DHL story was a case in point. That's because 3PLs have historically avoided mechanical automation in favor of software, data collection and rigorous processes to drive productivity improvements. While Quiet Logistics was an early adopter of Kiva, it was both a startup and an outlier.

Based on a conversation I had recently with Kevin Stock, senior vice president of engineering, and Alan McDonald, senior director of continuous improvement, at GEODIS, another global 3PL giant like DHL, I have another data point.

GEODIS recently implemented 30 mobile robots from Locus Robotics in a 139,000 square foot area reserved for apparel fulfillment in a shared tenant facility outside of Indianapolis. Stock and McDonald report impressive results – a 100% productivity improvement rate over their baseline. It's not a fluke: DHL is reporting similar results in the facility where it is using Locus Robotics.

The catalyst for the project was that convergence I referred to earlier. It starts with labor. DC operators tend to congregate in logistics hubs, where everyone is vying for their piece of a finite workforce. “Its becoming more and more difficult to find labor, especially around peak, in a lot of the markets where we're in,” says McDonald. “A big part of our strategy is how do we make the current employees we have more productive and to reduce the requirement for more labor at peak.”

McDonald's point was echoed by the executives I interviewed for the L'Oreal story, who told me that without robotics, they could no longer operate a 3rd shift in a 24/7 DC. While much is being written about the loss of jobs due to automation, I believe the real impact won't be a loss of jobs for those currently employed in our industry, since we don't have enough workers now. Rather, it will reduce the growth of the labor requirement in the future. When I threw out that idea to McDonald, he answered this way. “We're growing as a company and we have plans to keep growing. This strategy is to off-set the anticipated labor environment in the future more so than the immediate needs.”

The second convergence point has to do with making the existing workforce more productive. Prior to mobile robots, GEODIS utilized a pick-to-cart methodology. Rather than walk through a facility, stopping to scan barcodes, the robot stops at the pick location and displays the picking information. An associate picks from that location, scans the item into a tote utilizing the scanner on the robot and stays in his or her pick zone. The robot does all of the non-value-added travel. But there's a second piece to this: As with many DC's I visit these days, English is not the first language of some of the associates. The robots being utilized by GEODIS are able to display the language that is native to the associate who is going to perform that pick, eliminating errors.

The third convergence point is one I hadn't thought of, but Stock and McDonald mentioned that their customers are challenging them to innovate and improve. That's something that was echoed by John Galliher, the CEO of Preferred Freezer, and another proponent of automation.

When I look down the road, I think pressure exerted by those three convergence points will only increase. For example, for a variety of reasons, I expect the labor shortage to get worse and not better. This new generation of mobile robots is just more affordable and easier to implement than was Kiva. And, they're re-deployable to another facility.

McDonald and Stock noted that they began with mobile collaborative robots because they're not convinced that piece picking robots are ready for prime time today. They are watching the space, however, along with other technologies. They mentioned that they discovered the solution they're working with at ProMat, and expect to be at Modex. “Going to a showcase with 850 to 900 vendors helps,” McDonald says.

I’ll certainly be there, trying to figure out just what’s happening here.

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