Over the past decade, robots in warehouses have become ubiquitous, but so too have abandoned or underperforming projects that have failed to live up to their potential. Warehouse operators globally intuitively know that they must adopt new technologies, including robotics, in order to compete, but selecting the right solution and investment is a much trickier question. Like a wide-eyed child in a toy store, it’s easy to become overwhelmed with all the options and promises of possibilities beyond our wildest dreams!
Unlike the average trip to the toy store, the cost and consequences of selecting warehouse robots can make or break careers and businesses.
Background
Robots have been making their way into industrial settings since the late 1950’s, when Unimate, the first Industrial robot, was introduced by Joseph Engelberger. From Unimate’s humble beginnings to the half a million new industrial robots installed globally in 2021 (link), there is no doubt that robots are here to stay.
Today’s USD $7.93 Billion (link) warehouse robotics market includes hundreds of options – from straightforward sortation systems to collaborative robots and everything in between. The industry has evolved at the pace of technology, with new sensors, networks, and computing platforms enabling previously unthought-of innovation. Just 20 years ago it was unheard of that a robot and a person would work side by side, safely!
The demand for warehouse robots is unlikely to slow down anytime soon – in fact, Modor Intelligence (Warehouse Robots Market Size & Share Analysis 2024 – 2029, link) expects it to more than double, to nearly USD $18 Billion in the next 5 years. Changing consumer behavior, projected labor shortages, and lingering effects of COVID are all powerful influences on the evolving needs of warehouses.
Despite the size of the market, there are still a substantial number of warehouses without robots. In the 2022 Peerless Media/MHI Annual Survey, (2022 Robotics Survey: “The logistics robots have arrived” by Bridget McCrea May 4, 2022 link) only 23% of respondents were using robots – in the yet to be published 2024 update to the report, which Robot Advisors assisted with, that percentage doubled to 46%. In the same time frame, the number of respondents without plans to use robots declined from 40% to 8%.
The mainstream adoption of rapidly maturing technology like AI and drones will increase the number of available options even further, leading decision-makers and warehouse operators to feel overwhelmed like a kid in a toy store.
What could go wrong? The Perils of wrong robot choices
Returning to the toy store, if our wide-eyed child chooses a Barbie or a set of Legos, the consequences are relatively inconsequential. Sure, we might ascertain that their selection may impact their future, but odds are that single selection means nothing beyond a few weeks, months (or minutes!) of entertainment – and we all know that the packaging might be more engaging than the toy itself.
The same is not true regarding the selection of warehouse robots. The choice of solution will impact not only the business, but also individuals, the environment, and even the industry as a whole. If things go well, all parties will see significant benefits, but if they don’t… let’s examine the perils of making the wrong choice.
-
Company Ramifications
-
- Financial: The most obvious impact on the company is a financial one. With projects ranging from tens of thousands to millions of dollars, there is significant outlay of financial resources. In an unsuccessful project, this money may be totally lost, or in the best case, does not achieve the expected ROI.
- Disruption to Existing Operations: In most cases, the introduction of new robotic co-workers into a manual warehouse will be greeted with skepticism at best and downright hostility at worst. As the robots are introduced, most projects will include significant employee relations/change management components. A suboptimal robotic technology choice may unnecessarily disrupt existing operations and impact customer service. A less obvious impact is the potential for losing trust with existing employees as they feel at risk.
- Lost Opportunity: Warehouse automation projects will require attention from many teams within the organization – Facilities, IT, Operations, Finance, and Engineering to name a few. This is time that could potentially have been spent on other initiatives – from optimizing existing processes to selecting a more suitable solution that could have had a greater impact.
-
Individual Ramifications
Some warehouse automation projects offer a once-in-a-generation introduction of new technology, a once-in-a-lifetime opportunity to change the trajectory of a business and your career. Consider Bruce Welty and the team at 3PL Quiet Logistics, who in 2011, decided to double down on what was then Kiva Systems (now Amazon Robotics). This decision ultimately paved the way for not only Quiet but also was the genesis for solution provider, Locus Robotics. A successful project can lead to professional opportunities like industry recognition, expert speaking engagements, and job offers at other organizations.
What happens when projects don’t go according to plan? Let’s take a look at an example from another industry. In 2016, and with much anticipation, Samsung released their Galaxy Note 7, which included a compact design and a new high-capacity battery. Shortly after it hit the market, reports of the devices catching fire or exploding emerged. The incidents were linked to defects in the lithium-ion batteries used in the phones. The repercussions were severe for individuals involved in the development, marketing, and management of the Galaxy Note 7, the most notable being the resignation of the mobile division head, Koh Dong-jin. While most warehouse robotic automation projects won’t be quite so visible to the public, the same impact may be experienced – lost confidence and maybe even a lost job.
-
Environmental Ramifications
What happens to the actual robots when projects don’t live up to their potential? Most warehouse robots are purpose-built by vendors to work only with their software and solutions. There may be a limited resale market in select cases. Still, due to the proprietary nature and pace of technological innovation of most solutions this is unlikely to be significant. It’s also possible that some portions of unused robots can be recycled. The reality is that custom-manufactured parts, batteries, and electronics must all be disposed of somehow. The cost of this disposal, which falls on the business is one factor, but we must also consider the impact to the environment. Unused robotics are considered E-waste, or electronic waste. There is a growing global concern about the effects of e-waste. According to the Global E-waste Statistics Partnership (link), the world generated more than 57 million metric tons of e-waste – for context, that’s the equivalent of about 53.4 trillion Woody dolls.
-
Industry Ramifications
Less relevant to individual decision-makers, but still very real is the impact on the industry as a whole. Like a rising tide lifts all vessels, successful stories of robotic warehouse projects are good for all vendors and operators alike. Failed projects lead to lost confidence and often delays as companies seek to avoid risk. Fewer projects slow the pace of innovation. On the other hand, everyone benefits when projects go well, new solutions are adopted and proven and technology advances. Robot vendors and warehouse operators alike can profit from the application of rapidly emerging technologies including drones and AI that can only come to fruition if continued innovation can be supported.
Avoiding the Pitfalls
What’s a warehouse operator to do? You know you want, or even need, some kind of robotic automation. There are so many options, and you feel like that wide-eyed kid in a toy store. Here are a few pointers to help you narrow down your choices:
- Know what you’re looking for:
Ensure you have fully defined the business problem you’re trying to solve. This sounds obvious, but like the kid in the toy store, it’s really easy to get distracted by the latest video game console in the window, when the Power Ranger in aisle 3 might be exactly what you need. There are many great robotic solutions available, but not all will be able to help your business in exactly the same way.In defining your objective, it’s essential to not only look backward at the operational challenges you face today but to look forward to ensure you’re taking into account the future direction of your company and your warehouse. While things like warehouse efficiency and cost per unit will likely always be the primary objectives, consideration should also be given to availability and dynamics of the labor pool, location, available and potential capacity on site, SKU assortment, possibilities for changing business models, and more.Referring back to the problem statement throughout the decision-making process will help ensure you select the correct solution for your operation.
- Measure twice, Cut once: This mantra from the construction industry that refers to double checking your measurements before committing to the cut, which cannot be undone and may be costly to materials and schedule, is sound advice. It can be modified to “Model twice, Commit once” for our purposes. Time and effort spent on analysis has been shown to increase the success rate by up to 15% (McKinsey & Company, link) and helps to ensure no surprises once implementation begins. The first step is to have clear baseline metrics. “You can’t manage what you can’t measure”, as the saying goes. As discussed above, this includes more than cost per unit or pick rates but also other metrics that might be impacted by a robotic solution, such as SKU assortment, storage density, overall throughput capacity, order fill time, and more.Care must be taken not to over-rotate on the happy path, which will result in an unrealistic ROI and potentially the dreaded robot graveyard. Considerations include seasonal variations in SKU assortment and volumes, variability in receiving volumes, possible points of failure, both optimistic and pessimistic growth projections, and variations in labor availability.Investing in experienced advisory services can help identify unforeseen implications of various solutions where you may have a blind spot. In fact, Harvard Business Review has reported that seeking a second opinion on major business decisions can increase the likelihood of success by 60% (Lauren Landry, HBR March 5, 2020 link).
- Explore all your options: Industry trade shows are one great opportunity to see what’s available. From the latest in AI-enabled drones to “old” standbys like AGVs, you’ll be able to get a good view of what’s out there. If you’ve done a little work clearly defining the problem you’re looking to solve, you can focus on what booths you want to visit. If you’re not quite there yet, it’s also a great chance to network and hear what others are doing. If you cannot attend one of the shows, Robot Advisors has a comprehensive set of profiles of many of the leading vendors in the space (link) and provides recaps of all the major shows (link).
The cost of indecision
There may be an argument that it’s better to pick something and get on with it – no one wants to be left behind. If all of your competitors are doing it, maybe you feel pressured to make a selection. Perhaps a particular vendor seems attentive, and you’d be happy to work with them, even though you’re not certain their solution is the best for your purpose. Maybe you’re prone to “analysis paralysis” and uncertain about your final decision.
In all these cases, it’s worth getting a second opinion. Just like a doctor’s diagnosis, sometimes it’s valuable to someone else to take a look to ensure there is no unintentional bias. Also, like a health issue, it’s best to be proactive, do the studies, align with your company’s strategy, and not be pressured into making a decision.
In Conclusion
In the dynamic landscape of warehouse robotics, strategic decision-making is paramount. A wrong choice can have wide- reaching consequences. But take heart! There is no need to feel like that overwhelmed kid in the toy store – Do your homework, seek expert advice, and navigate the maze of possibilities with confidence. As the industry transforms, make decisions that not only benefit your company but contribute to the success and innovation of the entire warehouse robotics landscape.