3 Ways Automation Can Streamline the Supply Chain

By Jeff Christensen

The retail industry often serves as a principal driver of supply chain innovation, with companies continually looking for ways to get products to consumers faster and more efficiently. The key to a happy customer experience at a brick-and-mortar or online store lies in an effective and reliable supply chain. Automating certain supply chain processes can significantly further this mission.

Because the margins in retail are usually quite small, squeezing every bit of efficiency out of the supply chain is crucial to maintaining a financially healthy operation. For today’s retailers, one of the key technologies helping to streamline the movement of goods are industrial self-driving vehicles.

For decades — and still in many warehouses — pallets of product were shuttled around facilities by humans driving pallet trucks and tow tractors. These vehicles require a driver, which brings all the inconsistencies inherent with human operators. Workers might be late or not show up for a shift. A competitive labor market could trigger high turnover. Training new employees is expensive and time consuming; some experts project real costs at 150 percent of salary when factoring in other indirect impacts like lost productivity. And, most importantly, driving these vehicles is incredibly dangerous. Nearly 100,000 people are injured each year in forklift accidents.

To add a level of automation to their facilities, some retailers have begun using various automated guided vehicle (AGV) systems. Although these vehicles do not require a human driver, they do involve a heavy capital investment. Traditional AGV systems navigate using infrastructure, like wire, tape and magnets. It would take months, even years, for engineers to plan AGV systems and install the infrastructure needed to accommodate them. Once finished, the area would be difficult and cost prohibitive to change.

Thanks to extraordinary advancements in artificial intelligence, machine learning and computing power, retailers now have access to smart robots that are capable of working independently alongside humans throughout the supply chain. These robots range in size and scope, from small arm-like machines capable of picking a single object from a bin, to large, fully automated forklifts that can pick up and carry pallets weighing thousands of pounds safely and reliably across a crowded facility. Robots can also handle more dangerous tasks, such as lifting heavy objects, and can even bring entire shelves to workers to retrieve an item rather than a human having to walk endless aisles in search of a particular product.

Three more ways that retailers can benefit from using smart robots in their workforce include:

Improvements to Cost: One reason behind the push towards automation is the improved efficiency that robot workers bring compared to humans. Improved efficiency keeps costs down, and robots can also help fill labor shortages during peak times like the holiday shopping season. Rather than spending money hiring extra workers to help, companies can instead rely on robots to fill orders.
Increased Productivity: Adding robots doesn't necessarily take jobs away from human workers. A recent survey found that 86 percent of companies plan to increase or maintain headcount over the next two years due to automation. Robots are taking on some of the more dangerous and repetitive tasks found in the supply chain, freeing humans to focus on more useful and productive roles — e.g., robot fleet management and strategic supply chain oversight.
Greater Flexibility: Warehouse environments are huge and can be overwhelming on the best of days. They're constantly evolving based on changing product demand as well as other business reasons. An aisle might be altered or products might be stored in a different area. Static systems simply cannot adapt to such changes without missing a beat in productivity. Intelligent, infrastructure-free self-driving vehicles only need a few minutes to learn the new route and adjust to the new layout.

So what does leveraging automation in the retail supply chain look like? For online retailer Zulily, implementing a flexible solution of connected self-driving vision-guided vehicles improved ergonomics and led to an eight-month return on investment. A single VGV was able to do a job that once required six team members, resulting in redeployed employees to more value-added roles. Furthermore, there was a 400 percent increase in carts per trip.

As Zulily demonstrates, the impact of adding robots to warehouses has immediate, tangible advantages.These benefits have a positive impact across the supply chain, from business owners to workers, with improved efficiencies ultimately impacting customer experiences. The future looks bright for those retail innovators willing to invest in supply chain automation.

Jeff Christensen is the vice president of product at Seegrid, a provider of connected self-driving vision-guided vehicles for materials handling.