Automation Becoming Integral to Supply Chains

Today, businesses are being squeezed on all sides. They have to contend with high inflation, supply chain disruptions and scarce labour while trying to meet rising consumer expectations for low prices, fast delivery, order accuracy and easy returns. To relieve these pressures, businesses are increasingly outsourcing their logistics, and logistics providers are increasingly turning to automation. The result is safer and more efficient warehouse operations, higher consumer satisfaction and a growing consensus that automation is becoming integral to supply chains.

Starting from a small base

It’s estimated that currently only 5% of distribution centres are automated, so full automation is still years away. Nevertheless, we can already see the outlines of what this automation will look like over the coming years.

We think warehouse automation is going to proliferate where it is needed most. In Europe, we have warehouses in the U.K., France, Italy and Poland that showcase high levels of automation. One of these is the Nestlé distribution centre in the East Midlands, U.K., where end-to-end integration of automation and robotics helped the global food and drink processing conglomerate to overcome the challenges of COVID‑19 and the other supply chain issues that threatened the peak holiday shopping season in the final months of 2021. The throughput of this automation is eye-opening: Nestlé packed and shipped millions of its KitKat candy bars, which, if laid end-to-end, would reach from London to New York City.

Later this year, we’ll be opening a new automated warehouse for GXO pharmaceutical customers in Italy. That facility will showcase the growing use of automation to meet the challenges of highly regulated storage and handling requirements, operating efficiency and order accuracy.

Automated systems have also become crucial as we build and operate warehouses with high-density storage on multiple levels. Working with technology partners such as Dematic and SwissLog, we can engineer warehouse systems that automate access and retrieval tasks at high volume and accuracy with total consistency using cranes to find the appropriate products at higher speeds. This area of automation is steadily evolving, using faster systems that are better coordinated and are managed by smarter warehouse control systems.

Staying in its lane

Of course, warehouse automation has limitations. Once we get beyond the access and retrieval systems where automation excels on its own, the complementary uses of automation increase.

Picking, for example, is a more manual task, with colleagues moving around mezzanine levels collecting items to make up an order. But then picking is followed by sortation, which is another area where automation excels and is well-established. Automated sortation systems handle complex procedures consistently, accurately and speedily.

What’s next for logistics automation?

We expect to see three key developments in the use of automation over the next several years.

First, we think machine learning is going to finetune automated processes. We are already seeing this in our Nestlé distribution centre with one gantry system used to build pallets and another to take them apart. Using machine learning and machine vision, the layer pickers are learning how to improve operations and understand how to respond to anomalies and how to self-clear errors. 

"Automated Systems Have Also Become Crucial As We Build And Operate Warehouses With Highdensity Storage On Multiple Levels"

Second, we expect warehouse automation to keep adapting to the rapid growth in ecommerce. This is where technology add-ons such as autonomous mobile robots or cobots can complement our team members, boosting safety, accuracy and productivity in line with the throughput of automated processes in storage, retrieval and sortation.

And third, we think we’ll be able to use automation to develop solutions for return logistics and to revolutionise picking. In the fashion industry, returned goods have to be sorted and assessed for resale. Currently, picking items such as clothing is labour-intensive, but a machine that could identify a product and assess its quality will make huge strides toward automating the returns process. Developments in gripper technology that will select the right amount of pressure to use when picking up a pillow versus a car battery will further our vision for automating picking.

These developments will build on today’s pilots, such as the Knapp Pick-it-Easy arm that combines a sophisticated camera with AI-based object recognition capability to automatically pick up items and put them into pockets. The same system is ready to be applied to returns, too.

Integral, but not a panacea

Automation is going to continue evolving, but it won’t be the solution to every problem.

For example, a sea container stuffed with cardboard boxes that need unpacking and sorting presents a real challenge, even for automation. And whereas a supermarket might order food items in a predictable way, online consumer purchasing varies widely and sometimes even wildly. On the other hand, end-to-end warehouse automation is the right solution for a manufacturer like Nestlé because the company works with huge and predictable product flows.

Given the flexibility necessary to meet the widely varying needs of customers, we see the adoption of automation being led by modular technologies such as Automated Mobile Robots. AMRs are small and mobile — warehouses can easily add AMRs when volumes increase during peak seasons and then redeploy some of them elsewhere as volumes return to normal — giving them significant advantages over heavier, fixed installations. And the increasing use of AMRs, among other technologies, is making automation increasingly integral to supply chains.