No one will forget the year 2020 — 2021, or 2022 for that matter. The years when the pandemic toppled the global supply chain, forcing retailers to find ways to minimize the effects of disruption while managing unprecedented online shopping behavior — piecing things together however they could. And here we are, three years later, still feeling the pressure as old challenges linger and new ones — namely growing inflation, a softening economy, an impending recession, combined with a whole lot of fear — rear their ugly heads.
No doubt we’re in for a tumultuous and chaotic year — so how should retailers respond? Should they risk investing in new automation strategies, or follow the path of what’s been done before? What will enable these companies to come out stronger, more resilient and more profitable than ever before?
At Covariant, our advice is clear: scoop up customers from rivals by prioritizing the right types of investments that will optimize operations and prioritize the customer experience. Avoid overhyped AI applications or in-store gimmicks. In today’s market, these represent more “buzz” than impact. Get back to the basics by improving the backbone of every single customer purchase: further automating your material handling flow.
Recognizing Fulfillment as the Competitive Advantage for Retailers
The post-pandemic world is chock-full of costs and bottlenecks that are increasing at the same pace as consumer expectations for real-time delivery. It’s a pace unlike anything we’ve ever seen before, one where customers expect their goods instantly. This consumer behavior thrusts material handling into the spotlight, highlighting it as a capability that can make or break consumer loyalty and profitability.
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While the above sounds daunting, it also allows retailers to make their mark amid waves of disruption. From order to fulfillment, being innovative and efficient within the material handling process will allow retailers to respond faster to evolving consumer demands while minimizing the costs of fulfillment and delivery.
But that investment today actually looks much different than it did in years past. Instead of focusing on building new, state-of-the-art greenfield sites, you should shift your 2023 investments toward improving your current facilities by bringing in automation technology that creates efficiency and upends existing manual processes.
Better not Bigger: Upending a Heavily Manual Process for Maximized Efficiency
Here are three pieces of investment advice for those looking to create efficiency with automation:
- Automating “the hands” represents the biggest opportunity for impact, and invest accordingly. When it comes to increasing the efficiency of your current warehouse footprint, automating the picking, sorting and packing represents your largest potential opportunity. Over the last few decades the “feet” have been largely automated via technologies such as conveyors and mobile robots, but the “hands” still remain the most manual parts of fulfillment. The hands, which are responsible for use cases such as order picking, packing, order sortation, truck unloading, putaway and more can account for more than 50% of your organization’s labor costs.
But now it’s also time to treat the hands and the feet as one body. Relying on manual picking from cube storage, shuttles or AMRs undermines the ROI of your overall automation spend. If you still have that manual component, you’ve just moved the bottleneck, you have not yet eliminated it.
- Piece-picking automation is an AI problem to solve. Automating piece-picking is an AI problem to solve, not a hardware problem. Hence why these use cases have been predominantly manual up until now. Traditional robotic automation has not been able to successfully automate picking due to the adaptability required to handle an infinite variability of items. Think of the dynamic nature of your SKUs flowing through any fulfillment center at any one time — the different shapes, sizes, packaging types and, over all, seasonality of those items. Robotic automation powered by sophisticated deep learning-based AI enables retailers to achieve accurate and speedy autonomous performance in highly variable fulfillment environments — guaranteeing the ROI of your investment.
Want to learn more? See how Radial, a leader in ecommerce solutions, is using this AI-powered automation technology here.
- Scaled investments are the key to competitive differentiation. The retailers positioned to succeed the most in 2023 will continue to push for investments in automation technology, even if the economy might be headed into a possible recession. But how, exactly, do you generate the most competitive advantage from your automation investment?
This is the year to shift from pilot automation projects to deploying AI robotics at scale — using multiple picking robots for multiple use cases across multiple facilities. Look for scaled deployment to provide amplified benefits such as reduced labor costs and improved throughput — all while preparing for tomorrow.
In times of uncertainty, it’s important to have solutions that can increase your level of performance — even as it is tested by unprecedented or increasing operational demands. And when is the right time to prioritize said investment? Know that the deployment process can take up to six months depending on the scale of the robotic installation and your current operational needs. To ensure your company is prepared for the 2023 peak season, you should choose your robotics picking automation partner by the end of Q1.
In Summary
Instead of shying away from technology investment, retailers are forging ahead with a new approach: prioritizing material handling and logistics as a competitive advantage and investing in automation to squeeze every possible ounce of efficiency and cost savings out of the process — all while working to exceed evolving customer demands.
If you haven’t started to make these investments yet, there’s still time to catch up. While most retailers intend to scale investment quickly, some are just beginning. You’re not behind yet…but don’t wait any longer or you won’t be able to catch up.
Ally Lynch is Chief Marketing Officer at Covariant, a leading global AI Robotics company that delivers AI-powered automation solutions to solve the problems of today’s modern warehouse.
