Companies with extensive field operations are seeing the value of mobile technology for enterprise-wide use. In Zebra’s Future of Field Operations Vision Study, 97% of companies surveyed expect to expand mobile technology for enterprise use to replace paper-based systems.

This explosion in adoption was made possible by the spread of 4G/5G service and other emerging technologies, with 60% of companies embracing a mobile-first strategy to integrate and scale technology across the enterprise.

The interest in automating many transportation and logistics functions is driven by macro-level challenges facing many companies. Making each employee more effective with mobile technology relieves some of the pressure on staffing operations. Rising labor costs improve the ROI narrative for investment in technology.

At the same time, the demands on transportation and logistics companies are higher than ever. Operational visibility has never been more critical, with an unrelenting need to know where assets are located from the warehouse through delivery and back, with reverse logistics.

Each aspect of the operation is under pressure to improve process efficiency. Speed and timeliness are critical to creating fluid operations. Visibility improves asset utilization to support efficient drop-and-hook operations and helps avoid costly detention fees.

Transportation and Logistics Automation Solutions

Automation is a critical piece of the solution. With rugged mobile devices in the hands of drivers and the cab, paperwork becomes a thing of the past. Real-time visibility of information transforms operations from reactive to proactive, with insights into drivers, vehicles, and customers. Improved management drives efficiency and profitability while overcoming the challenging environment. Enterprise devices eliminate the complexity and risk of managing consumer-level personal devices.

By embracing automation and mobile devices, transportation and logistics managers have the real-time information they need to reduce the cost of delivery operations, get the most value out of assets and personnel, and improve the quality and consistency of their customer service.

5 WORKFLOWS TO AUTOMATE

Rugged mobile devices close the gap between front-line work and the back office, making supporting field workers easier and giving managers access to real-time information.

• Last-Mile Delivery. Improve visibility from pick-up to delivery to ensure the right package gets to the right person at the right time without errors.
• Proof of Delivery (POD). Create accurate chain of custody during pick-up and delivery with electronic signature capture and mobile receipts. Improve financial results with same-day invoicing and reduce damage claims with photographic proof of condition at delivery.
• Electronic Logging Device (ELD). Replace paper with real-time processes throughout the delivery network to reduce costs and improve service quality. Because the devices track mileage and hours logged, fleet managers automatically collect regulatory information, such as hours of service and fuel tax data.
• Routing. Improve dispatch and routing efficiencies with immediate visibility into vehicle location and routing within the context of network-wide operations. The stream of real-time location information allows dispatchers to better manage routes and ensure drivers arrive on time, with the least miles traveled.
• Fleet Management. Automate proactive maintenance and compliance checks for all assets. Improve fleet uptime with preventive services that keep trucks on the road.

“For too long, we’ve thought about supply chains as cost centers,” says Rob Cushman, senior partner, supply chain transformation, with IBM Consulting. At their best, however, supply chains are growth drivers, he adds.

Automation is key to corporate initiatives to drive growth. As more supply chains digitize, they can deliver a wealth of data. A lack of automation, however, can keep supply chain leaders from accessing real-time, enterprise-wide information that can help them identify operational inefficiencies.

Here’s a look at the benefits possible from automating the supply chain.

Enhance Inventory Visibility

Many benefits possible with automation stem from the visibility it can provide.

Visibility and automation are key tools for companies facing pressure from customers, as well as internally, to cut inventory and costs.

“CFOs are closely monitoring supply chain and logistics operations,” says Ashutosh Dekhne, partner and head of Americas supply chain operations and tech practice with EY. “Many are questioning the labor required to make and ship items.” Automation can streamline processes, allow workers to contribute strategically, and cut costs.

The inventory visibility made possible through automation helps companies avoid overstocking products that are at risk of growing obsolete, or understocking hot-selling items and losing sales.

Accelerate Speed to Market

Companies can leverage automation to rev up speed to market. When they leverage dynamic planning solutions and employ automation, companies can act as soon as they receive market signals.

“Conversely, if a company takes several days to plan, it negates the benefit of getting the demand signal quickly,” Dekhne says.

Attract Workers

By making many warehouse and distribution center positions more appealing, automation can help companies tackle the current labor shortage. “Nobody wants to work in a facility where the easiest thing to use is their cell phone and everything else is 15 years behind the curve,” Dekhne says.

Meet Sustainability Goals

Even once products are in transit, automation has a role to play. Vehicle routing and scheduling solutions enhance full truck utilization and optimize routes, reducing emissions, among other benefits, says Robert Recknagel, vice president, logistics and manufacturing with Flexis, a provider of supply chain solutions. Integrating a three-dimensional container-loading solution further maximizes space utilization and cuts transportation costs.

These benefits have gained prominence as attention to sustainability increases. “More companies are aiming to streamline processes and align automation efforts with initiatives that address environmental concerns,” notes Craig Moore, vice president, sales, North America, with Körber Supply Chain.

Gain Control

Manual inventory management methods are no longer productive. Many companies are incorporating Inventory visibility technology into their omnichannel fulfillment operations to better predict inventory flows and reduce operating costs.

Once an organization has data, it needs to convert it to information. This may take the form of a supply chain control tower, which Gartner defines as “a combination of people, process, data, organization, and technology that captures and uses (close to) real-time operational data from across the business ecosystem to provide enhanced visibility and improve decision making.”

By assembling information from across a supply chain, control towers can develop “one source of truth,” says Barry Bradley, head of supply chain with Crisp, a collaborative commerce solutions provider.

When all areas of an organization work from the same information, they can make better-informed decisions, he adds.

Take the example of RxSugar, which provides allulose, a plant-based alternative to regular sugar, through more than 15,000 stores and 30-plus brick-and-mortar and ecommerce channels.

“As a relatively new product, our main challenge has been the supply chain-constrained ecosystem in which we operate,” says Steve Hanley, founder and chief executive officer.

The limited universe of allulose manufacturers, combined with RxSugar’s impressive growth, calls for a carefully planned and streamlined supply chain. To help reach this goal, RxSugar implemented a data platform from Crisp that can aggregate data on sales, distribution, inventory, and other functions from across the company’s distribution channels.

Hanley and his team can assess top-level demand across the network in real time, plan production, and keep shelves stocked. “We are now able to get ahead of our supply chain and we can order materials and packaging with 12-week lead times,” he says.

Leverage Robotics

Robots, such as Boston Dynamics’ Stretch, can boost warehouse efficiency and improve picking accuracy, among other benefits.

By 2027, more than 75% of all companies will have adopted some form of cyber-physical automation within their warehouse operations, according to Dwight Klappich, vice president and fellow with Gartner’s supply chain practice, in a recent brief.

Mobile robots typically require lower capital investments than fixed automation systems, says Rowan Stott, research analyst with Interact Analysis. In addition, it’s typically easier to add robotics to existing warehouses than to put in a new, fixed system.

Adding to robotics’ appeal is their dropping prices. Between 2011 and 2022, the average price of an industrial robot fell by about half, finds EY research. Conversely, wages and salaries rose about 43% over the same period, according to Statista.

Boost Decision-Making

Like control towers, digital twins can aid in decision-making. These are virtual representations of objects or systems that span their lifecycle, are updated with real-time data, and use simulation, machine learning, and reasoning to help decision-making, IBM explains.

Companies can use digital twins to simulate the impact of an event, such as a supplier that halts plant operations due to a weather event. To provide the most value, a digital twin should concentrate on modeling hot spots and critical components. “Be smart about what you want to model,” Dekhne recommends.

Improve Data Insights

In the supply chain world, artificial intelligence (AI) is capturing attention. Successfully implementing AI-enabled supply chain management solutions enabled early adopters to improve logistics costs by 15% and inventory levels by 35%, among other benefits, compared to their slower-moving competitors, McKinsey research found.

Generative AI is upping the ante. Generative AI empowers users to build their own interactive models, Deknhe says. For instance, a supply chain planner trying to determine the impact of a 20% jump in demand for a product has typically needed to manually assess supply levels and contact suppliers to get information on raw material supplies, among other data—a process that can take days. Generative AI can ask the same questions, work with the data, and adjust models to more quickly provide this insight.

Advance with Software

While traditional software solutions, like warehouse management systems, may not generate the same buzz as AI, they remain critical to many supply chains. They also continue to advance. Thirty years ago, companies could complete materials requirement planning (MRP) about once a week.

“We would dim the lights whenever we hit the enter key,” recalls Steven Benz, senior consulting manager with Panorama Consulting. Today, companies can generate MRP reports every 15 minutes.

Current algorithms can automate forecasting, inventory control, and supplier selection, among other functions. While algorithms—sets of finite rules or instructions to be followed in calculations or other problem-solving operations—aren’t true AI, they make software solutions more robust and useful.

Automate from End to End

More companies are evaluating and automating supply chains in their entirety, rather than focusing on optimizing individual pieces. A more comprehensive approach can help supply chains better handle disruptions, such as geopolitical events.

“End-to-end process automation can bring together siloed systems, connect people involved in different processes, and allow information to flow securely, says Gary Cassell, global industry lead, manufacturing and automotive, with Appian.

Organizations can act on the information to build resilience and optimize performance. When companies link their systems through a digital layer, they minimize the need to rip out solutions that are working but disconnected.

End-to-end solutions often encompass multiple systems. For instance, supply chain execution systems can expedite operations for swift, efficient task completion, while warehouse control systems (WCS) can serve as vendor-neutral hubs, orchestrating diverse material handling technologies for uninterrupted material flow. A WCS can integrate with a warehouse management system to optimize material flow.

The result? “An integrated process, enhancing warehouse throughput and performance,” Moore says.

Connect Through the Cloud and APIs

Automation has generally lagged where old systems need to be linked with new software solutions. Cloud-based software solutions can help by enabling the rapid exchange of data between all supply chain parties in real time, so data-based decisions can quickly be made.

APIs also offer a scalable solution for sharing data, unlike the generally cumbersome practice of emailing spreadsheets back and forth. APIs encompass a set of defined rules that allow different applications to communicate with each other. They enable access to information by sharing folders via the cloud.

Optimize Routes

Route optimization technology can improve delivery productivity while hitting customer service targets. This improvement can reduce delivery costs—distance, vehicles, or drivers—and increase delivery capacity.

It’s not only the operations inside warehouses or distribution centers where automation can drive efficiency. Route optimization software can leverage AI to dynamically match carrier capacity with loads, minimizing empty miles and helping carriers fill their trailers, says Justin Haines, director, fleet solutions with Coyote Logistics, which offers such a solution.

Improve Yard Management

In contrast to the automation seen in many warehouses and in transportation management, the “yard often is clipboards and walkie-talkies,” says Greg Braun, chief revenue officer with C3 Solutions, which offers yard management solutions. Yet technology has a role to play here.

Yard management automation can include a range of solutions. Some systems allow drivers to check in with their smart phones. Artificial intelligence can support task optimization, such as determining optimal trailer moves, Braun says.

As technology advances, the value of automating the supply chain will only grow. Companies that are quicker to leverage automation will gain first mover advantages, as well as the ability to attract top-notch talent. “It’s a win-win,” Dekhne says. n

7 Steps to Implementing Automation

While the benefits of supply chain automation are clear, the skill with which it’s implemented contributes to a solution’s success. These guidelines can help.

1. Focus on adding value. The solutions that will add value vary by company, says Lisa Anderson, president with LMA Consulting Group. Ecommerce retailers may find that automating the order-taking process adds the greatest value, while distributors might look to advanced analytics and planning solutions to better manage inventory and free up cash.

2. Take it step by step. Start with a solution that brings a rapid return on investment and addresses the most urgent problems, and then build from there. Introducing too many functions at once increases complexity and can overwhelm employees.

3. Invest in change management. When new solutions fail to live up to expectations, it’s rarely the technology that’s the reason, says Sandy Gosling, partner with McKinsey. Instead, it’s often a failure to build the capabilities needed to leverage the technology. Supply chain leaders can help employees understand how a new way of operating will benefit them and the company, and then train them on the systems.

4. Know your starting point. This isn’t always obvious, given corporate restructurings and changes in IT solutions. If you can’t identify the starting point, you risk generating needless disruptions when automating.

5. Check the data. The GIGO (garbage in/out) rule applies. While perfection isn’t necessary, data should be “directionally correct,” Anderson says.

6. Consider the impact to the organizational structure. It likely will change as new data becomes available. Employees who were good at finding problems may find their roles supplanted by technology. Instead, they’ll be charged with deciding how to address the problems.

7. Develop back-up plans. Automation can fail even with the best of care. Backup plans and systems can help with recovery until systems can be restored.

Pouncing on Automation

Automation is helping Tiger Tail USA “keep our team lean and efficient,” says Spring Faussett, president of the muscle recovery tools producer. Oracle/Netsuite’s manufacturing, inventory, and accounting system enables Tiger Tail to more systematically manage orders.

Among other benefits, Tiger Tail can enter product and vendor information, and then use reports and alerts to ensure proper ordering lead time and quantity forecasting.

When Tiger Tail receives inventory, it can quickly add this information and make it visible to all users. The company also uses inventory reports to work with vendors and shipping companies to ensure full truckloads.

“Although the system is expensive for our small company, it saves at least one employee and lowers accounting costs over the course of a year,” Faussett says.

On Tiger Tail’s consumer websites, custom APIs push orders into Netsuite, minimizing human handling. Custom APIs allow Tiger Tail to easily add new websites and products, which otherwise would be difficult to manage, Faussett adds.

Q. Automation in the fulfillment center landscape is erupting at incredible speed. What’s driving it?

A. There have been huge advancements in robotics and automation over the past decade. The same technology we’re seeing in self-driving cars has entered our industry. Similarly, venture capitalists have fueled the growth by investing in emerging robotic companies and technologies that specialize in fulfillment. When coupling the new technologies not previously available with the continued need to mitigate labor woes in the fulfillment center, the climate is ripe for massive growth.

Q. How do you view the future of fulfillment?

A. We will continue to see new technologies emerge at an aggressive pace; however their focus will be more specific. Similarly, their span of expertise will remain specific to a function in the overall process. Success will be determined not so much by the automation or technology itself but how well they’re integrated into an operation. Those who are investing in a scalable and flexible workflow software platform will achieve success earlier than others.

Q. How is VARGO® leveraging automation and software to change the game for its clients?

A. The key to applying new levels of automation in the fulfillment center is to take a holistic approach and start with the basics of redefining the full operational process. Particular attention must be paid to how all resources (both machines and people) interact with the new processes.

At VARGO® we start with the end in mind and work our way backward, defining how people and automation will work together to accomplish the highest levels of efficiency. Our largest differential in how we select and integrate automation is our COFE® Warehouse Execution System (WES). We have successfully doubled productivity and doubled throughput simply by using our WES and capitalizing on automation capacity.

Q. What opportunities do you see with these new automation technologies?

A. Some brilliant people are behind these new technologies and that is why their products are making a positive impact. However, we see a large gap in how they are applied. We need real-world experience from the operators and supervisors in the fulfillment center. We need more focus on the entire operation, not the silo where automation plays.

Q. What are some of the success factors VARGO® focuses on to measure your solutions?

A. With more and more silos of automation and managing labor around those silos, we look at the overall building flow. We often see a 2x multiplier in the efficiency of manual productivity. We also benchmark the utilization of machines, and we look to achieve 90% or better of their full capability. At the end of the day, we do more with less. Automation often comes at a price so making efficient use of it results in requiring less of it. To date our solutions set standards on manual labor rates, efficiency of automation, and have some of the lowest order cycle times in the industry.

Most of the existing examples are found in the middle mile—the warehouse and DCs—moving ingredients and finished consumer products toward the final demand point.

Several leading companies have taken shots at automating the final mile with drone deliveries. Amazon Air, DHL, FedEx, UPS, and Walmart are all testing the waters with drone delivery of products, but not necessarily just food. Robot final mile is also being tested in select urban areas.

But those automated bot delivery attempts have hit some speed bumps. Drone and bot delivery methods are in their infancy and may be successful in the  future, but today they can’t compete with something much better—human-driven DoorDash, Instacart, and Uber Eats last-mile food delivery.

Now comes a new alliance between two great brands—John Deere, with a long and storied 188-year history in food production, and Elon Musk, who is creating history with Starlink and everything else, it seems.

Deere has a long history in farm automation. How is this different? What’s the end game? For the first time, it brings web tone automation capabilities to rural internet dead zones, lighting up the first mile or starting point in the food supply chain. Aaron Wetzel, vice president of production for Deere, says it best: “Farmers must complete tasks within extremely short windows of time. This requires executing incredibly precise production steps while coordinating between machines and managing machine performance. Each of these areas are enhanced through connectivity, making the entire operation more efficient, effective, and profitable.”

The possibilities are exciting. Enterprise automation from low earth orbit, to rural farms both large and small, in the United States and around the world. Super accurate maps of all available arable fields.

Increased efficiency and sustainability. Better water and fertilizer management. Then there are the seasonal labor shortage challenges farms must contend with. Satellite automation can help there with all of that and more.

Imagine robotic combines, seeders, plows, fertilizers, or anything a tractor can pull. And most importantly for supply chain planning purposes, 10-ton harvesters like sentient bugs picking the fields clean and pushing advice to demand points around the globe.

The offline start point of the food supply chain is coming online.

What’s on the Minds of Manufacturing CEOs?

Manufacturing CEOs are making big plans for 2024, including accelerating investments in artificial intelligence, automation and robotics, while also raising the skill level of their current employees and recruiting highly trained workers. That’s the consensus of a year-long series of polls conducted by Xometry, an AI-powered, on-demand industrial parts marketplace. Here are some in-depth findings from the polls:

• Modernizing through AI. Manufacturing CEOs say AI will play a significant role in their company in the next one to two years. Of the CEOs who have already implemented AI, more than 70% have seen significant ROI in key areas such as supply chain management, quality control, and procurement.
• Domesticating manufacturing. Reshoring will continue to trend upwards with 76% of manufacturing CEOs having successfully reshored some or all of their operations throughout 2023, a move accelerated by federal tax incentives and initiatives such as “Build America, Buy America.”
• Tapping the brakes on EVs. While the automotive industry is primed for growth and innovation in 2024, EV manufacturers may be taking their foot off the accelerator when it comes to electric vehicles. Xometry’s Automotive Survey finds that 84% of automotive executives said current production timelines and waning consumer demand may make it difficult for the industry to meet the Biden Administration’s goals for the years ahead.
• Tracking a more sustainable future. Though EVs may be hitting a road bump for now, manufacturers are taking proactive action to limit greenhouse gas emissions across their industrial supply chains. Fifty-two percent of CEOs view climate change as an existential threat caused by human activity. In 2024, companies will make sustainability a business goal with more investment in measuring and tracking tools to prioritize decarbonization of their operations.
• Investing to fight a skilled labor shortage. Nearly four years post-pandemic, there remains a shortage of more than 600,000 manufacturing jobs waiting to be filled. As American manufacturing becomes more high tech, CEOs remain worried about attracting highly skilled talent. According to Xometry’s research, more than half (56%) of CEOs said they struggle finding qualified employees in today’s tight labor market.
• Pushing aside politics. Xometry’s Q4 CEO survey shows a near 50/50 split on whether Democrats or Republicans will better support manufacturing and the economy at large. The priorities remain non-partisan: bipartisan collaboration, public-private partnerships that invest in skilled labor, and proactive assistance from the federal government for the reshoring of manufacturing.

Help Wanted x 2 Million

The logistics and transportation sector is no stranger to challenging employment trends. Combating driver shortages, for instance, has been a top priority for trucking and intermodal companies for the past several years. And finding and retaining skilled warehouse workers has also been problematic for the distribution field.

The sector should continue to expect ongoing employment difficulties in the near future, according to Chad Raube, president and CEO of IntelliTrans, a global provider of multimodal solutions for bulk and breakbulk industries. What’s driving these trends? Raube points to increased order complexities; lower levels of available, seasoned staff; and changes in economic conditions where recovery rarely generates a return to prior staff levels.

“With continued growth forecast for domestic freight in 2024 and beyond, there is an expected need of nearly two million new employees for transportation and warehousing jobs, due to growth and attrition,” he says.

Adding to the challenge is the fact that companies are competing for a shrinking share of the population. Raube points to these stats: For workers aged 25 to 65, only 19% of the labor force will increase from 2021 to 2031, and 80% of the workforce in 2031 will come from the over-65 population.

Also, construction of new manufacturing sites has tripled in the past two years because of reshoring, which will change distribution patterns and transportation modes, adding to the urgency around these trends, he notes.

Three Industrial Real Estate Predictions

1. Look for vacancy rates to inch up further, as the construction pipeline continues to deliver new product throughout the country, while demand moderates further. The national vacancy rate should peak at just over 6% in 2024 before re-tightening.

2. Net absorption will remain tempered in 2024, as cooler consumer demand for goods, persisting elevated interest rates, and sticky inflation hamper growth.

3. As this wave of industrial product delivers over the next 12 months, the construction pipeline will shrink further, leading some markets to become supply constrained in 2025 as absorption starts to regain momentum.

Source: Cushman & Wakefield

Oversupply Makes Waves for Ocean Shippers

What do ocean freight experts see for 2024?

Shippers should expect more service disruption as container lines seek to manage oversupply and limit losses, predicts Philip Damas, managing director of Drewry Shipping Consultants and head of Drewry’s Supply Chain Advisors practice.

To control the level of oversupply, Damas expects a greater number of blank sailings, which will significantly reduce the predictability of containership departures.

Here are Damas’ key predictions:

• Container lines will collectively record profits of roughly $20 billion for 2023, but the oversupply of vessels will result in a collective loss of $15 billion in 2024.
• 2024 will be an ocean freight buyer’s market, and shippers should be able to secure significant rate cuts. “But,” Damas warns, “there will be a price to pay: the service reliability and service level of carriers will probably worsen.”
• In 2024, shippers will also need to contend with new EU Emission Trading System (ETS) surcharges from carriers. While current ETS surcharges on most trades are not high, Drewry is concerned about whether surcharges are “set at a justified, reasonable level,” as ETS surcharges are likely to more than double in 2025 and 2026.

2024: Year of Optimism and Growth?

Overcoming a slew of recent challenges seems to be breeding optimism in the supply chain sector. After enduring disruptions such as the pandemic, geopolitical conflicts, and monetary tightening, businesses are now adopting a growth mindset, according to Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report.

This is despite the fact that the report shows a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing higher delivery costs and delayed delivery times.

“Global businesses are adopting a more pragmatic stance towards their future,” explains Neeraj Sahai, president, Dun & Bradstreet International. “This shift in mindset suggests anticipation of additional growth in the forthcoming quarters, albeit with an underlying sense of continued caution.”

Key findings from the report’s five indices—measuring Q1 2024 compared with Q4 2023—reveal the following:

• The Global Business Optimism Index increased by 6.6%, indicating that businesses in advanced economies now feel more confident about their ability to absorb geopolitical and policy shocks, and are focusing more on growth opportunities.
• The Global Supply Chain Continuity Index fell sharply by 6.3%, with suppliers’ delivery time and delivery cost indices both deteriorating.
• The Global Business Financial Confidence Index increased by 10.1%; in addition, liquidity is expected to increase across firms of all sizes and businesses are more optimistic about their competitive positioning.
• The Global Business Investment Confidence Index rose 10.7%, showing a growing consensus that major central banks in advanced economies have reached a peak in the current interest rate hike cycle.
• The Global Business Environmental, Social and Governance (ESG) Index increased 7%, reflecting a positive shift in the commitment of firms worldwide towards sustainability practices.

“Greenwashing” Gaffes

With the current intense focus on sustainability, it’s not surprising that many companies are accused of “greenwashing,” or conveying a false or misleading impression of the environmentally friendly nature of their products or supply chains. Increasingly, however, many firms may be unintentionally guilty of the practice.

Nearly half (45%) of U.S. organizations are concerned they could be at risk of unintentional greenwashing, finds new research from Ivalua. With pressures from customers and regulators on the rise, organizations also face pressure to ensure all green claims are legitimate.

The study reveals less than half (48%) of organizations claim they are “very confident” that they can “accurately” report on Scope 3 emissions (emissions resulting from activities or assets not owned or controlled by the reporting organization). Meanwhile, nearly two-thirds (62%) say reporting on Scope 3 emissions feels like a “best-guess” measurement.

The research also shows that while 88% of organizations are confident they’re on track to meet net-zero targets, many don’t have comprehensive, fully implemented plans in place for:

• Adopting renewable energy (78% are confident in their plans)
• Reducing carbon emissions (68%)
• Adopting circular economy principles (72%)
• Reducing air pollution (67%)
• Reducing water pollution (63%)

The research also finds that more than half (51%) of organizations agree that unless green initiatives to reach net-zero goals also involve suppliers, they are a waste of time.

Quick Take: Sector Sentiment

• 74% of supply chain professionals foresee positive growth in the global container shipping industry in 2024.
• 53% expect an increase in container prices, 26% anticipate stability, and only 21% express pessimism about price decline.
• 30% of supply chain professionals say forecasting and planning is the most important area of business to improve with technology in 2024, followed by real-time visibility and tracking (24%), collaboration and connectivity (27%), and process automation (18%).

Source: Container xChange Industry Speak Survey

A Sea of Investment

The Great Lakes St. Lawrence Seaway system, a marine highway that supports more than 100 ports and commercial docks located in each of the eight Great Lakes states, and the provinces of Ontario and Quebec, has been the recipient of significant investment from public and private sources over the past five years.

An independent survey conservatively estimates that investments made between 2018 and 2027 will total $8.4 billion.

Prepared by Martin Associates, and titled Infrastructure Investment Survey of the Great Lakes and St. Lawrence Seaway System, the survey quantifies ongoing investments in the navigation system to help support long-term planning and economic development goals, while also building confidence in the system’s future viability.

The survey also reveals investment in specific aspects of the system, including:

• $636 million in vessel enhancements between 2018 and 2022; $328 million planned between 2023 and 2027.
• $2.1 billion to enhance port and terminal infrastructure between 2018 and 2022; $1.1 billion planned between 2023 and 2027.
• $3 billion in waterway infrastructure (locks, breakwaters, navigation channels) between 2018 and 2022; $1.2 billion planned between 2023 and 2027.

“The survey’s conclusion is clear: both the public and private sector recognize that maritime commerce on the Great Lakes and St. Lawrence Seaway remains essential to the economies of the United States and Canada, and are investing to protect this irreplaceable system,” said U.S. Transportation Secretary Pete Buttigieg.

While automation plays a significant role, many aspects of the supply chain are far from being entirely automated. The logistics chain, in particular, involves many complex processes that still require human oversight and intervention.

For instance, while AI can analyze vast amounts of data to identify customer demand or seasonal patterns, it is up to human supply chain managers to interpret this data and make informed decisions.

During the pandemic, human forecasters often outperformed AI systems in predicting changes in consumer behavior. While AI systems struggled due to the sudden and unprecedented nature of the pandemic, human forecasters adapted quickly, mostly using their experience and intuition to make predictions based on real-time data and consumer trends. AI and human workers can and should complement each other’s strengths.

The Human Touch

While AI can automate routine tasks and provide valuable insights, human workers bring to the table critical judgment, decision-making skills, and adaptability. This leads to the conversation around job loss caused by AI, but it is important to understand that AI will create a lot more jobs, requiring employees and employers to obtain the necessary skills and training.

Another notion that keeps some users away from AI is that it is beneficial only to large enterprises. While this may be true in some cases, the advent of cloud-based AI solutions, pay-as-you-go alternatives, and overall dramatic shifts in the costs associated with AI, it has become possible for companies of all sizes to use it.

Implementation costs have gone down significantly compared to just a few years ago. However, when supply chain companies try to become AI companies creating their own teams around this topic, it can be a completely different conversation.

How many companies build their own warehouse management system or ERP platform? Not many, right? It’s more affordable and efficient to outsource to companies that are innovating AI to provide easier access.

AI integrations come in many shapes, forms, and costs. Some require an entirely new infrastructure to operate software and need regular updates and maintenance—expenses that add up over time. For most companies, the cost to transition and adopt AI software to improve existing operations becomes out of reach.

For full-scale adoption in the industry, affordable avenues for implementing AI are key. Software that works on existing infrastructure is a gateway to improving the supply chain, creating jobs, and streamlining the process from start to finish while making adoption and upskilling faster and easier.

Companies that view AI as a tool that enhances human capabilities to drive greater efficiencies while reducing costs will win. The integration of AI and human expertise will continue to shape the supply chain landscape.

According to a study by MHI and Deloitte, 80% of respondents believe the digital, always-on supply chain will be the predominant model within five years.

With the advent of technology, warehouse automation systems are redefining inventory management, order accuracy, and speed of delivery, enhancing customer satisfaction while reducing operational costs.

Automated Warehouse Systems Development

The genesis of automated warehouse systems traces back to the need for efficient, error-free, and fast operations within the logistics industry. 

Initially, warehouses were labor-intensive, with workers performing manual tasks often prone to errors and inefficiencies. However, with advancements in technology, the incorporation of automation solutions like Autonomous Mobile Robots (AMRs), automated storage and retrieval systems, and machine learning algorithms have revolutionized warehouse operations.

Today’s automated warehouses are a symphony of cutting-edge technologies that seamlessly streamline inventory, packaging, and delivery processes. Industries ranging from e-commerce to manufacturing are leveraging automation to optimize their supply chains. 

For instance, Amazon’s automated warehouse utilizes a mix of robots and AI to streamline its order fulfillment process, leading to reduced delivery times and enhanced customer experience.

The technology embedded in warehouse automation systems ranges from robotics that transport inventory around the warehouse floor to AI algorithms that predict customer demand and optimize inventory management. 

They also incorporate integration with existing enterprise software to ensure real-time data analysis and decision making. Vertical lift systems and automated storage solutions maximize warehouse space, ensuring efficient inventory storage and retrieval.

Most Advanced Automated Warehouses Examples

Amazon stands as a quintessential example of warehouse automation at its pinnacle. The e-commerce giant employs over 200,000 mobile robots working alongside human employees to optimize the picking, packing, and shipping processes. These robots reduce the walking time of warehouse workers, increasing efficiency and throughput markedly.

Ocado, a British online supermarket, operates another stellar example of an automated warehouse. In this facility, swarms of robots navigate a three-dimensional grid, picking and packing grocery orders. The system is orchestrated by a complex algorithm that ensures maximum efficiency and speed, resulting in orders being processed in minutes.

Benefits of Automated Warehouse Applications

The application of automated warehouse systems yields many benefits that transcend enhanced operational efficiency, including cost reduction, safety enhancement, and customer satisfaction improvement.

Lower Error Rate

Automation minimizes human intervention, leading to a significant reduction in errors. For example, an automated storage and retrieval system ensures precise picking, reducing the incidence of wrong orders and returns.

Employee Efficacy

Automation relieves employees from repetitive, mundane tasks, allowing them to focus on more complex tasks. In Amazon’s warehouses, robots transport goods, while employees focus on quality checks, enhancing overall efficacy.

Increased Productivity

Automated processes ensure tasks are completed faster and more accurately, leading to increased productivity. Alibaba’s automated warehouse in China utilizes robots to handle 70% of the work, leading to unprecedented efficiency.

Automated processes like real-time inventory tracking and order picking are faster and more accurate, reducing errors and associated costs. Automation also ensures a seamless fulfillment process, from order receipt to packaging and shipping, thus reducing lead times and enhancing customer satisfaction.

Reduced Processing Time

Automation accelerates order processing. In Ocado’s automated warehouse, complex algorithms and robots ensure orders are processed in minutes, ensuring faster customer deliveries.

Maximized Space

Automated storage solutions optimize warehouse space utilization. IKEA’s automated warehouses use robotic carousels to store and retrieve items, maximizing vertical space usage.

Safe and Dependable Operation

Robotic systems ensure operations are conducted safely and reliably. In Amazon’s facilities, robots are equipped with sensors to avoid collisions and ensure a safe working environment.

Improved Inventory Management

Real-time inventory data and AI algorithms optimize stock levels and reordering. Walmart uses AI to analyze sales data and replenish inventory efficiently.

Using AI in inventory management also aids in demand forecasting, ensuring that stock levels are optimized to meet customer demand without excess. Advanced data analytics tools analyze past sales data, trends, and other factors to predict future demand, aiding warehouse managers in making informed decisions on inventory purchases and stock allocation.

Reduced Operational Costs

Automation reduces labor and operational costs. Companies like Amazon leverage robotics and AI to streamline operations, significantly cutting costs.

Improved Customer Satisfaction

Automation ensures faster, error-free deliveries. E-commerce giants like Amazon and Alibaba leverage automation to enhance order accuracy and speed of delivery, leading to improved customer satisfaction.

Sustainability and Scalability

Automation is energy-efficient and easily scalable to meet increased customer demand. Ocado’s energy-efficient robots and scalable automated storage and retrieval systems exemplify this, ensuring adaptability to fluctuating market demands.

Disadvantages and Costs of Warehouse Automation

While the advantages of an automated warehouse are evident, it is crucial to consider the associated challenges and costs. Implementing warehouse automation systems involves initial investment hurdles, training requirements, and other operational adjustments.

Initial Start-Up Cost

Implementing warehouse automation can be capital-intensive. The investment in technology, machinery, and integration with existing systems can be substantial. For example, a small e-commerce business might find the initial investment in robotics and AI beyond its immediate financial capability.

The initial start-up cost can be mitigated by phased implementation. Businesses can begin with automating core warehouse tasks and gradually expand to incorporate more complex automation solutions. The adaptability of many warehouse automation systems allows for this phased integration, making automation accessible even for businesses with limited initial capital.

Training

Employees must be trained to operate and manage the new automated systems effectively. In Amazon’s case, despite automation, human intervention is necessary for maintenance, supervision, and other specialized tasks, requiring comprehensive training programs.

Other Considerations

Automation often leads to workforce reductions and necessitates strategic planning for the existing workforce. Also, constant maintenance and upgrades of the automated systems are essential. For instance, an automated storage and retrieval system requires regular maintenance to ensure optimal performance.

Automated Warehouse Operations

The evolution of automated warehouse operations ranges from complete to partial automation, depending on the nature and scale of the business. In complex warehouses like Amazon’s, a combination of robots, AI, and human intervention ensures efficiency, while smaller enterprises might opt for semi-automated solutions to balance costs and efficiency.

Automated Product Receipt

Automation in product receipt enhances accuracy and efficiency. For instance, Walmart utilizes automated systems to receive products, where barcodes are scanned automatically, ensuring precise inventory data entry and immediate shelving or storage application processes.

Automated Transportation Internal

Internal transportation is another area where automation plays a crucial role. Companies like Alibaba employ robots that move products within the warehouse efficiently, reducing manual labor and ensuring that products are transported to their respective storage locations or picking stations in record time.

These robots are equipped with sensors and sophisticated navigation systems, ensuring they follow the most efficient routes within the warehouse. This not only speeds up internal transportation but also reduces fuel consumption and wear and tear on the equipment, contributing to reduced operational costs and an eco-friendly warehouse operation.

Storage Application and Stacker Cranes

Automation in storage optimizes space and enhances retrieval efficiency. IKEA, for instance, employs automated stacker cranes in its warehouses that ensure optimal space utilization and guarantee swift and accurate retrieval of items based on real-time inventory data.

Automated Order Picking and Distribution

Automation in order picking and distribution is pivotal in meeting customer expectations for speed and accuracy. Amazon employs a mix of robots and AI to ensure that the right products are picked, packaged, and shipped efficiently, significantly reducing the order-to-delivery time.

Automated Warehouse Software

Automated warehouse software integrates with physical automation to optimize operations. For instance, SAP Extended Warehouse Management provides real-time data and process automation, enhancing warehouse operations’ visibility, control, and optimization. 

This software ensures that all processes, from receipt to shipment, are streamlined, and decision-makers have real-time data at their fingertips to optimize operations.

Safe and Sound Supply Chain

Integrating physical automation and sophisticated software ensures a synergy that redefines efficiency, accuracy, and customer satisfaction in the landscape of automated warehouse operations. 

As technology continues to evolve, the scale and scope of automation in warehouse operations are set to reach unprecedented heights, with AI, machine learning, and robotics leading the charge. 

The investment in warehouse automation—though significant—is justified by the unparalleled operational efficiency, cost reduction, and customer satisfaction it delivers, positioning it as an indispensable element in the future of supply chain management.

Transitioning to Automation Trends

Businesses considering the transition to an automated warehouse must weigh factors like operational scale, budget constraints, and the complexity of tasks. 

The shift is not binary and companies can opt for incremental implementation, blending manual processes and automated solutions. A tailored approach, often integrating various automation technologies, can address specific operational challenges while ensuring ROI.

When transitioning, companies should also consider integrating with their existing enterprise software to ensure a smooth flow of data and processes. 

Employee training and change management are pivotal to harness the full potential of the new automated systems. Businesses need to assess their current workforce’s skills and readiness for the transition, providing training and support to ensure that employees are equipped to maximize the benefits of automation technologies.

FAQs

Explore the answers to some frequently asked questions about warehouse automation.

What is a warehouse automation company?

A company that specializes in implementing technology and systems to automate warehouse tasks, increasing efficiency and accuracy in storage, retrieval, and distribution.

Will Amazon warehouses be automated?

Amazon is progressively automating its warehouses, incorporating robots, AI, and other technologies to enhance efficiency and speed while still requiring human oversight.

What is an example of warehouse automation?

Autonomous mobile robots for transporting goods within the warehouse, automated storage and retrieval systems, and AI for inventory management are examples of automation.

How many warehouses are automated?

The number is continually growing, driven by e-commerce demand, technology advancements, and the need for efficiency and speed in supply chain operations.

Warehouse Automation Solutions Summary

The integration of warehouse automation is transforming the logistics industry, offering solutions that enhance efficiency, accuracy, and cost-effectiveness. Automated warehouses leverage cutting-edge technology, reducing labor costs and optimizing processes, setting a new standard for supply chain management in an increasingly competitive and demand-driven marketplace.

As we peer into the future, the synergy between human expertise and automation will continue to shape the supply chain. The iterative improvements in warehouse automation systems, fueled by advancements in AI, robotics, and machine learning, promise an era where supply chain efficiency, speed, and accuracy are optimized to unprecedented levels. 

The automated warehouse is not a static concept but an evolving entity, adaptable and scalable to the dynamic shifts in market demands, technology, and consumer expectations.

Akash Gupta, CEO & Co-Founder, GreyOrange

Akash Gupta and Samay Kohli were barely out of college when they co-founded robotics and AI firm GreyOrange. From that start in 2012, the company, now based in Atlanta, has become a major force in supply chain automation, with operations across the Americas, Europe, and Asia.

“In 2012, supply chain was not as sexy as it is today,” says Gupta, who took over from Kohli as CEO of GreyOrange in 2023. “It was still a back-end function and a pure bottom-line driver rather than a top-line driver.” The world has changed since then, and demand for GreyOrange’s solutions has soared.

Gupta filled us in on the company’s history and recent activities and shared some insight into his leadership.

IL: When you and Samay Kohli founded your robotics business, why did you choose logistics as its focus?

In 2012, digitization was transforming manufacturing just as ecommerce was revolutionizing consumer behavior. We predicted that the supply chain, which connects the manufacturing and consumer ecosystems, would have to evolve quickly as well. That was a global problem.

Also, we realized that warehouses badly needed to be automated in two ways: to reduce manual labor and walking, and to become less dependent on human decisionmaking. We were intrigued to find an industry that needed a combination of robotic automation and software automation.

IL: Tell us about an event early in your career that taught you an important lesson.

Our first product was a sortation system. The launch was beautifully successful; it took just a few months to sell systems to two large companies in India. But then we had to spend 12 to 18 months refining those systems, because what you think you have on paper is very different from what happens in the warehouse. That experience taught us a lot of things that two engineers getting out of college needed to know.

And those lessons paid off extremely well. One of our first customers was the ecommerce company Flipkart. We worked very hard to make sure their peak season went well, and they turned into an amazing customer reference for us. The next season, we sold 37 sortation systems and went from $500,000 in revenue to between $10 million and $12 million.

IL: What keeps your customers awake at night?

Three things. First is how to develop a technology platform that will give their customers the right experience. Second is, once they’ve identified how to deliver that experience, how do they quickly scale up the solution to cover the whole enterprise? Third, how do they stay agile, so they can respond to any sort of event, from a pandemic to unexpected changes in consumer demand?

IL: Do customers bring any unusual challenges to GreyOrange?

One customer was shipping 80% of its volume to retail stores and 20% to ecommerce consumers from one facility. We designed a system to support that volume. Then COVID hit, and they asked us to flip the system to 80% ecommerce and 20% retail.

That was a drastic request, but fortunately we had been designing our solutions to accommodate a change in channel mix. We were able to reconfigure their system in a few days.

IL: What would we see if we followed you around at work?

I spend 50% of my time with current and prospective customers; I try to visit three or four customer sites every 15 days. Another 30% of my time I spend talking to folks in the company, including my direct reports and people at the execution level. And I probably spend 20% of my time putting out fires and making sure we keep the lights on.

IL: How would you describe your leadership style?

I’m fairly detail-oriented. I try to be as intellectually honest as possible, and I want everybody to do the same. I like to hear bad news as quickly as possible, so we can do something about it. Once we make a commitment to a customer, I go very far to make sure we keep that commitment.

IL: How do you nurture talent on your team?

Because it’s so important to understand our customers and their problems, I encourage team members to visit customer sites. I make sure that they feel comfortable trying new things and making mistakes, but also that they have a clear view of what is important, what is reversible, and what is irreversible.

These people have attained their roles because they’re capable, but through all the chaos of running a business, they need to be self-aware. It’s important to help them with that.

IL: What’s new and interesting at GreyOrange these days?

We’re making sure that each member of our leadership team spends time in one of our customers’ warehouses. And we’ve recently expanded the focus of our solutions from just the warehouse to the larger challenge of omnichannel execution, including in-store inventory.

IL: How have you been influenced by a mentor or role model?

I’ve had several mentors, but one who taught me a particularly interesting lesson was Thomas Chance, the CEO of C&C Technologies, where Samay and I did internships. We worked closely with him on a few projects, and he was kind enough to tell us about his experiences. He emphasized that you have to respect Murphy’s Law: If something can go wrong then it will go wrong, so it’s important to be well prepared.

IL: Is there something you believed strongly at the start of your career that you’ve changed your mind about?

When you start out, what’s most important is to get the technology or the product right. But the crucial thing is to get the people right. The value of having people who align on the company’s vision, culture, and behavior is even greater than the value of a good product or technology.

IL: Outside of work, how do you like to spend your time?

I love taking drives to remote places. I also love attending all kinds of musical performances. And spending as much time as possible with family is always on my priority list.

Keep Moving Forward

Looking back at his entrepreneurial journey so far, the characteristic that strikes Akash Gupta as most important is a bias toward action.

“You start your day with 10 decisions to be made,” Gupta explains. “No matter what happens, a few of those decisions will be wrong.”

But you can’t let fear of those inevitable errors keep you from moving forward. “You’ll never have enough information to make the perfect decision,” he says. “You just need to trust that you are making more right decisions than wrong ones.”

A. Some of the biggest trends we’re seeing in the logistics industry relate to automation and robotics, and how to increase efficiency across all parts of the fulfillment and distribution process.

As an automatic sorting solution provider, we see firsthand how even small to mid-size companies are pivoting towards smarter ways to switch over their manual processes with smart tech.

Q. For smaller companies seeking to automate warehouse operations, what solutions should they consider to immediately address pain points?

A. A great place to start is to look at weighing and dimensioning solutions. Being able to scan and log products by SKU to keep volumetric weight low is critical as prices continue to rise.

For smaller companies, it is important to find scalable automation solutions to address long-term considerations. Avoid finding ones that are “just right” now, but not in the long term.

Q. What are the long-term advantages of automation solutions in parcel processing operations?

A. If you choose a solution wisely—one that is scalable with your company growth—you will reap the benefits long after your initial investment is paid off. It’s essential to find solutions that are long-term and adaptable, and that you invest in continued maintenance along the way to ensure a healthy ROI.

Addressing pain points with modular solutions allows a company to keep its existing processes running and over time makes introducing new automation simple, intuitive, and efficient.

Q. How has the labor shortage affected companies’ approach to automating operations in warehouses and distribution centers?

A. Many companies used to make decisions to invest in automation based on labor ROI, but now companies are looking at meeting and exceeding their service level agreements (SLAs).

A labor shortage makes it difficult to deliver goods on time and that affects your SLA and reputation to those you serve. Using automation boosts the labor force you do have, and maximizing productivity is paramount to meeting SLA standards.

While current approaches have been monumentally successful and offer benefits for those who follow the rules, logistics automation—specifically new developments in warehouse automation—gives forward-thinking supply chain managers some counter-intuitive choices on warehouse or fulfillment center locations. Three factors drive that counter-intuitive thinking.

1. Products follow people and some centers of American consumption are reshuffling. “Where are my customers now? Where will they be in 5 years?” That’s hard to know. But smarter, and in some cases older, consumers who hanker for less crowded, less congested, less contested, and more clement climes are moving elsewhere as a result of the pandemic, work from home, high taxes, social challenges, onerous regulations, and other factors. Companies are planning and building a new wave of distribution assets to serve that mini migration.

2. Warehouse labor shortages in many areas. Conventional thinking was to locate a new facility in larger, more urban centers of population to gain access to a good and reliable labor pool. Yet many modern and automated DCs are less labor intensive and more labor light, meaning product can move with fewer hands on the boxes.

That also means you don’t need to locate your distribution facility in traditional urban areas. Consider that those locations are typically more highly taxed, have higher energy costs, and, in some cases, a more stringent regulatory environment, prompting the question: What am I doing here?

3. A new wave of available warehouse automation and robotics. Lower-cost, hard-working automation solutions enable you to locate your facility in sites more distant from your final mile. While it’s true that automation costs are high, amortizing those investments over time is likely to offset the costs associated with traditional locations, even accounting for higher transport costs.

New choices are here. You don’t have to be a robot whisperer to listen to where your robot tells you to go.