A generation ago, touchscreen technology was futuristic. So the truth, or rather, a more reasonable approximation of it, is that the future will be radically different. But like a frog in boiling water, our perception will be that change has happened slowly, making today’s crazy prognostication, feel like business as usual tomorrow.
The future of supply chain management
We wanted to explore how robots would impact or take over the supply chain. This will have big implications for your business and most likely for your personal life too. But for every upside, there’s a potential downside as well.
The 2017 Kantar Retail Poweranking showed how Walmart and Kroger have embraced change to great effect, but that doesn’t mean they’ve gone all-in on robotic technologies. Rather, they have ventured into new territories tactfully—which is exactly how we think you should proceed.
Let’s examine things a bit more closely.
Robots in the supply chain
Three years ago, an understandably biased, but useful report from the Robotics Business Review made a strong case for robots in the supply chain.
Their findings include that:
- Human labor costs are 50% of warehouse costs – the largest single portion
- The price gap between robots and human labor is closing rapidly
Of course the third assertion, given that they advocate for the robotics industry, is that robots are poised to be a big market–more than $14 billion by 2022 according to some industry estimates. And who would begrudge them that?
A robot can work round the clock in your warehouse and doesn’t require health insurance. But what if it breaks? Self-driving vehicles don’t call in sick, but they are out there representing your brand—do they reflect positively on your company? Drone delivery is fun tech, but it also understandably comes with some negative connotations. How do you unpack all of this and make a sound business decision?
The question is: should you get invested in robots for your area of the supply chain?
Industry analysts have been saying robots are going to take jobs for a while now, which hasn’t turned out to be true. What is happening is that robots have gotten better at taking the heaviest lifting and the most dangerous aspects of work in the supply chain, freeing humans to attend to other tasks. Robots will most likely improve the mix of tasks being performed by humans, and in the process, improve profit margins for companies.
The robotic future is bright-ish
In fact, some industry analysts see a bright future where robots help employees become more efficient by taking care of the more repetitive aspects of the job. For example, in your pick, pack & ship operation, we think robots will do the arduous job of picking while humans focus on the fine details of packing and customer service.
Robots can reach and fit into a much wider set of spaces, so they can function in a warehouse with more inventory packed in with much greater efficiency. In this way, robots save time and drive down cost per square foot. And with OSHA opening up the regulatory framework, the future is arguably bright.
Artificial Intelligence or AI and robots is a big advantage
One place where we think there might be a big advance in robot technologies in the supply chain is in the big players such as DHL, where they are coupling robots and AI to make sure the co-working environment with humans is safe and efficient, and to stay up-to-speed with rapid changes in warehouse configuration.
To be fair, much of this debate is academic. More than a year ago the Wall Street Journal reported that fully ⅓ of all supply chain companies already use robotics in some form throughout their operations.
Caution is warranted. There’s nothing worse than investing in technology, robotic or otherwise, only to have it become obsolete because the warehouse changes, or worse, to limit warehouse optimization because your are too deeply invested in one type of technology.
Our suggestion: don’t stand on the sidelines.
Take advantage of the opportunities available through robotic technologies, particularly if you can couple them with artificial intelligence. Don’t try to be Amazon. Take a stepwise approach. Find a partner. Do your homework. Watch the market closely for opportunities. Or partner with a company that lowers the threshold to engaging with a range of new tech, robotic or otherwise.
Prepare for the future of supply chain management
Whatever your comfort level and budget, you have to be ready for a future where your competitors are enjoying cost and time savings from a range of new options. You might introduce physical machines into your operation, or you might simply take advantage of virtual assistance from something like OBI.
John Moore – Founder
Packaging & Logistics Solutions (PLS)