2022 was the worst year for retail in five years. The Centre for Retail Research reported that, as the growth of e-commerce has heralded the demise of traditional shopping habits, 17,145 UK high street shops closed.
In turn warehousing has been affected by this ‘quiet revolution’, gaining greater prominence in the retail supply chain as bricks and mortar stores close and retailers focus on delivering directly to consumers.
Accordingly, warehouses have transformed into sophisticated order fulfilment centres, offering complex value-add services, and managing ever larger numbers of SKUs with omnichannel inventory. Rapid order fulfilment isn’t just an option anymore. The expectation is for shorter lead-times, fewer errors, and higher visibility, both for the consumer and the retailer. To meet these demands, in addition to good old-fashioned process-flow optimisation, a new generation of highly-skilled logistics professionals relies on cutting edge technology.
As consumers responded to civic lockdowns by embracing e-commerce, fulfilment centres had to increase productivity while observing social distancing in the workplace. Simultaneously, a mass exodus of EU nationals from the UK workforce and early retirement of older workers, perhaps fearful for their health, or simply re-evaluating their life choices, hit the logistics industry hard. Alongside the well-documented loss of HGV drivers, warehousing faced a severe shortage of trained forklift truck drivers and in the ensuing labour wars, companies fought to secure sufficient staff at every level.
But it was not only labour that was in short supply. Ecommerce takes up more space than conventional retail operations, but across the UK, the impact of many years grappling with a planning system that is not fit for purpose meant the warehousing sector struggled for space too. This combined dearth of people and places meant warehouse managers had to get creative, finding ways of doing more, in the same space, with fewer people. The adoption of automation began to accelerate in UK warehouses.
Experts have predicted a surge in digital transformation over the next decade, which will bring fundamental changes to the warehouse operations of the future. Even the UK Government expects warehousing to be at the epicentre of a rapid period of growth in robotics across the whole economy.
Key technologies will include real-time data gathering, underpinned by the Internet of Things (IoT), enabling predictive analytics, real-time visibility and allowing collaboration among processes and partners, to create more efficient and effective operating models.
Beyond visibility, IoT enables holistic performance and status tracking of all connected devices. For example, temperature sensors can monitor cold storage parameters and vibration sensors track motors, predicting failures before they occur.
Smart phones, mobile devices and apps have already equipped warehouse workers to access data anytime anywhere, using imaging, voice recognition and more to contribute towards increased performance and lower costs.
And now, with increasing capability and configurability, the robots are coming: a cost-effective form of labour requiring few breaks and no holidays, demanding neither light nor heat. As costs come down and Robotics as a Service (RaaS) gains in popularity, this option takes the strain of monotonous, repetitive work, freeing human workers to focus on more complex tasks and scaling up capacity almost instantly during erratic peak seasons.
But the fear that robots will take over people’s jobs has proved to be unfounded. Feedback from one of the UK’s largest 3PLs suggests that working alongside robots enables employees to operate more effectively, increasing productivity whilst building morale and job satisfaction within the workforce. Moreover, the adoption of robots and other technology has generated a wide range of new IT jobs – from software programmers to maintenance engineers.
Cobots – collaborative robots designed to work with humans to complete tasks such as picking – are becoming more common, thanks to their affordability and ease of programming. They are designed to work safely and efficiently around humans. Easy-to-integrate, lightweight and flexible, warehouse Cobots eliminate unnecessary walking or heavy lifting, so workers can focus on picking and other revenue-producing tasks. It is even possible to take the collaboration further, with an exoskeleton or “wearable” robot to augment human capabilities, reducing the risk of fatigue or injury.
Autonomous Guided Vehicles (AGVs) have been around since the 1950s, but still have the potential to revolutionise the movement of goods in and around the warehouse. They are scalable and only require minimal adaptation to the existing infrastructure, although a smooth floor is usually a pre-requisite. Autonomous Mobile Robots (AMRs) have even more dynamic navigation abilities. Drone technology too is proving increasingly popular as a safe and economical option for inventory management, taking a fraction of the time needed for the manual equivalent and delivering more accurate results.
These developments and more are contributing to increased productivity and improved efficiency, optimising workflows with faster putaway, picking, packing and stock control. By replacing potentially hazardous tasks with automation, warehouses are operating more safely too.
Yet, despite the many benefits, to date too few warehouses in the UK have adopted technology. According to warehouse automation experts Interact Analysis, 74% of UK warehouses are still unautomated. This is in part due to low industry margins and in some cases planned investment in automation has been put on hold because of the currently high interest rates. Other barriers include fear of change, implementation challenges and even a shortage of microchips suppressing the availability of some robot hardware.
Many warehousing companies have been slow to take the leap, but the prediction is for investment in technology to take off in 2024. Clearly, doing nothing is no longer an option. Automation has been well described as ‘the new frontier’ for our industry, improving operational performance, adding value, increasing profit margins and, ultimately, driving down costs.
In the new digital world of e-commerce, warehouses – indeed all businesses across the supply chain – must embrace technology, not only to thrive, but to survive.
