Robotics figure prominently in future supply chain process improvements

Berkshire Grey Inc., a supplier of AI-enabled robotic solutions for supply chain processes, announced the results of its 2022 State of Retail & eCommerce Fulfillment Report. The research, conducted in partnership with Hanover Research, surveyed more than 200 chief supply chain officers at retail and ecommerce businesses. Topics covered include labor issues, costs, pain points, automation and predicted areas of industry growth.

The study found chief supply chain officers expect the labor shortage to continue to grow in their industry, with 64% noticing generational differences in employment preferences that will have a long-term impact on labor availability.

Along with many warehouse laborers permanently leaving the field due to a multitude of factors including reskilling, pandemic-related illness and an aging workforce, the industry is also being hit with a combination of population forces. These include the lowest birth rate in U.S. history paired with Baby Boomers retiring out of the workforce, as well as a generational shift in what employees are looking for in their careers and workplaces.

“Labor issues across industries continue to vacillate, but unlike the temporary shortages seen in other industries, continued e-commerce growth and shifts in generational employment preferences are uniquely impacting the fulfillment industry and predicted to lead to long-term labor shortages that will only compound in the coming years,” said Steve Johnson, president and COO at Berkshire Grey.

How to improve talent retention

With more than half (57%) of executives saying that labor shortages have hindered their ability to meet demand, it’s critical for supply chain decision makers to find a way to bridge the gap. Seventy-six percent of executives believe they’ll need to raise wages and 63% believe they’ll need to increase bonuses to attract and retain workers.

Executives also believe robotics automation is a promising talent attractor.

•Nearly three-quarters (71%) of executives believe robotics automation is necessary to counter reduced applications from younger generations.

•Although less than one quarter (13%) of executives say they are currently using robotic automation, they are keenly aware this is where the industry is headed, as evidenced by over half (51%) of executives being in the process of adopting or planning to adopt robotics.

•Over half (51%) of executives believe implementing automation will increase employee satisfaction, and 43% believe it will lead to a decrease in employee turnover.

Rising customer demands, expectations

Rising consumer expectations and on-demand shopping resulting from the pandemic are requiring retail and e-commerce companies to greatly step up their throughput, with experts predicting the e-commerce market to increase from $3.3 trillion to $5.3 trillion by 2026.

•Free returns are growing to be table stakes—nearly three-quarters (72%) of executives believe they would lose customers if they didn’t offer free returns.

•More than two-thirds (68%) of executives believe they will need same day or faster delivery speeds within two years.

•More than three-quarters (80%) of executives that saw an increase in return rates in 2020 have needed to increase headcount to accommodate the increase of returns.

Automation’s impact

Since 2019, the percentage of executives who believe automation is mainstream has increased by nearly 43%. Robotics automation in particular figures in the plans of many.

The survey showed that more than three-quarters (78%) of executives expect to save more than 10% on order fulfillment costs as a result of robotics automation. In addition, 85% of executives currently using robotics are planning to increase their investment. Key areas of focus for robotics are packaging/labeling (62%), item sortation (59%), returns (58%) and goods retrieval (58%).

The results contained within the report are based on a survey of over 200 senior-level supply chain decision makers in the U.S. at eCommerce and retail businesses.

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