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In our previous article, we have given readers a glimpse of what the future of Supply Chain Management (SCM) might look like with increasingly sophisticated automation. 2017 will surely bring about new inventions and greater advancement in technology, but will these be big enough to significantly decrease the number of low-level human jobs in this sector? This article will look into two major components of logistics: warehouse and last-mile delivery.
Robots in warehouses
Machines and robots are so much more intelligent than we can imagine these days. While most of us are familiar with robotic ‘arms’ swiftly assembling intricate parts of a product on long and automated assembly lines, not many would feel comfortable letting a robot perform their surgery instead of a human doctor, which is already happening in some parts of the world. This technology might soon become established enough to make us change our minds. If robots can even help with complex medical procedures, what is stopping them from taking over our warehouses and distribution networks where tasks are relatively simple and repetitive? The answer is: nothing.
A Symbotic autonomous robot, resembling a small driverless go-cart, travels on ledges down a storage-rack aisle to pick out products in a C&S Wholesale grocery-distribution center in Newburgh, N.Y. Photo: Michael Rubenstein for The Wall Street Journal (Source)
Robots are already swamping warehouses of the biggest retailers in the world, from simple stationary robots unloading containers to advanced mobile bots moving around aisles, sorting, retrieving and packing items according to a pre-programmed algorithm. These jobs used to be done entirely by human workers. Traditionally, a warehouse worker would have to walk along shelves and read printed labels on packages. Nowadays, packages are equipped with barcodes and microchips, which makes digital scanning a much more efficient and less time-consuming way to locate them.
This trend is caused not only by rising labor cost in some countries, but also the rapid increase in retail volumes from the developing world, especially in e-commerce. Retailers all over the world are under immense pressure during holiday seasons, such as Black Friday and Christmas. With a massive number of products coming in and going out of warehouses each day, most companies have found automation a very worthy investment. Amazon – the world’s largest e-commerce retailer – has always been a leader in technological application in its numerous and massive warehouses. Kiva used to be a pioneering invention and an early proof of the efficiency of automation over an all-human workforce [1]. These warehouse bots, now exclusive Amazon’s, have sparked an arms race among many other tech companies to automate warehouse operations for other corporations such as Target, Wal-Mart, etc.
After they arrive at C&S Wholesale’s Newburgh warehouse, packages of grocery products are separated by fixed-in-place robots into individual cases and move along conveyors. Photo: Michael Rubenstein for The Wall Street Journal (Source)
Symbotic, a leading provider of robotic automation solutions for distribution centers, said its system allows food retailers and wholesalers to cut distribution-center labor costs by 80% and operate warehouses that are 25% to 40% smaller [2].
Warehouse jobs are especially vulnerable to automation because they are mostly fixed and repetitive physical tasks, something machines are very good at doing. A job that used to take over 10 workers and several hours to complete now requires only three people and takes less than an hour thanks to conveyor belts, digital scanners and robotic wheels. Even though new warehouse jobs are still being added to the industry every year, the numbers are beginning to dwindle.
“Amazon, one of the biggest dogs in warehousing, has built 20 new fulfillment centers outfitted with robotics in the last three years, four in California. Since 2014, the company has added 50,000 warehouse workers nationwide — and more than 30,000 robots” [3]. Nowadays, big corporations are even building warehouses designed especially for automation. Instead of clear passageways for human workers to walk along, rails will be installed throughout for a robot’s wheels to roll not just along aisles but also up and down shelves. It is possible in some cases to save 50% of warehouse picking labor with these systems through the elimination of walking [4].
Automation in delivery
While distribution managers are all too familiar with the operations of a warehouse, customers are mostly concerned with effective last-mile delivery. In developing countries like Vietnam, human delivery men are still the only choice. However, more developed economies are already looking to use robots to join traffic and do this job. Dispatch’s Carry robot is one such innovative invention:
If Carry and similar products receive the authority’s green light, they will directly replace human workers and save retailers massive amounts of money. Customers will no longer open the door to see a smiling human handing them their package.
Similarly, self-driving cars have been heavily invested in by big names in the automobile industry such as BMW and Tesla. Notwithstanding, these autonomous vehicles are still being tested in highly controlled environments. Unlike human agents, robots can only be programmed to react to a limited number of scenarios and therefore will become helpless in unforeseen circumstances. It will take even more time for them to appeal to developing markets such as Vietnam due to its highly complex and less systematic transportation networks. Since vehicles on the road directly affect the health and safety of human passengers, any related automation will require a lot more trials and assurance than robots in a closed warehouse.
Having said that, automation is definitely still making its way into delivery, but in a less tangible way. As the first step, effective distribution needs effective route planning. Although a general route optimization software is no longer new to logistics managers in developed markets, these days, there are also software customized for specific developing countries such as Vietnam. The best last-mile delivery system in this case will take into account unique local characteristics such as motorbike delivery, customer locations, traffic restrictions among many others.
Abivin vRoute is a dynamic delivery management system with the best route optimization algorithm tailored to ASEAN and other emerging markets (Source).
Even if this technology does not perform any physical tasks like robots do in factories and warehouses, it still affects human jobs by increasing delivery efficiency and thus cutting the number of drivers needed. For example, Abivin has helped one of the largest FMCG companies in the world to reduce the number of drivers, and cut 30% logistics costs with the same amount of goods to be delivered.
On the bright side, while it is true that increasingly more human jobs in logistics are now done by robots, the rapid growth of automation is also opening up vacancies in other areas. After all, someone has to build these robots, then control and supervise their performance. Low-level workers who used to hand-pick packages off shelves in a warehouse will now have to learn new skills to handle the robots which are doing their old job. It seems we humans really do have to try and catch up with technology.
Reference
[1] https://www.bloomberg.com/news/articles/2016-06-29/how-amazon-triggered-a-robot-arms-race
[2] http://www.wsj.com/articles/fully-autonomous-robots-the-warehouse-workers-of-the-near-future-1474383024
[3] http://www.latimes.com/projects/la-fi-warehouse-robots/
[4] Robotics in Logistics – A DPDHL perspective on implications and use cases for the logistics industry (March, 2016), page 23.