Lior is co-founder and CEO of inVia Robotics with over 20 years of experience in internet networking, robotics and software development.
getty
The US economy faces unprecedented uncertainties. Inflation is rising, but overstocks cause price discounts. Unemployment is low, but wages are falling. Interest rates are rising, but consumers are still spending. And with little to no barriers to entry, online stores seem to be popping up overnight, creating more and more competition.
These are just a few factors that create a volatile economy that is extremely difficult to understand, and companies have a harder time making predictions for. So as the industry continues to buzz, the need for newer automation that offers the flexibility to accommodate these trends becomes more imperative.
Many unpredictable factors affect order completion.
The one economic trend that seems indisputable is that there isn’t enough labor available to hire, train and retain, which means that customer orders don’t go out on time. The labor shortage has been a factor for years, and it worsened with the pandemic. I specifically point this out because: 42% of consumers expect a two-day shipping option for every online purchase they make.
More recently, wild swings in consumer demand have added a new challenge. Major retailers are lowering their prices to clear out products that used to be in high demand. Broadly speaking, order volumes for household items and furniture are trending downward, while essential products continue to trend upward.
It also becomes even more important to manage the flow of goods entering the door. Processing returns is expensive and labor-intensive. Each item must be inspected manually and when seasonal goods are returned, they can often never be resold. Some major retailers, such as Target, are actually consumers pay to simply not return their unwanted items.
Uncertainty requires agility.
Through the pandemic and the ‘great layoff’, we have learned that it is critical to reallocate resources during unexpected events. It is imminent that someone will stop, a forklift will stall or another Covid outbreak will leave a warehouse with a shortage of staff. The ability to remain nimble is important to ensure that gaps in the workforce are filled.
While some warehouses have implemented automation in the past, they applied it in a traditional way. For example, the systems are often fixed and rigid, leaving little or no room for adjustments to floor plans, stock flow or working conditions. In addition, they require significant upfront costs to implement without a clear path to a return on investment that makes them worthwhile. Furthermore, they do not allow evolving technology to improve their processes on a continuous and flexible basis. This is where newer automation systems, especially mobile ones, are best suited.
Automation helps reallocate resources and run effectively.
With newer automation systems, digital simulation warehouse managers can reorganize an entire warehouse with minimal disruption. This includes the ability to move people, workstations, racks and robots until the workflow makes sense for the current circumstances. This can be done repeatedly as things change.
Here are a few instances where this level of agility has the most impact.
• Stock ebb and flow: When it comes to inventory, retailers are turning to the help of AI and the digitization of data to further inform the products on their shelves. By providing greater visibility, automation systems can help a retailer understand the speed of their product SKUs and how it should affect warehouse placement, price reductions, restocking needs, and overall demand. The data also enables warehouse managers to better inform their productivity and staffing needs.
• Warehouse Density Pain Points: At the beginning of a warehouse opening, a retailer may feel that he has enough space. But as time goes by and customer demand asks for a variety of SKUs, the topic of density will arise. Newer automation systems can help reorder warehouse inventory, positioning the most requested SKUs in optimal places and others backwards. Furthermore, bins can be specifically designed and stored by robots to maximize the space available on racks.
• Relocation and expansion: Moving is a stressful process, and flexible automation systems help you pack and move your warehouse to best handle situations like last-mile delivery. In addition, warehouses can adapt their robot fleets to market conditions in different locations. For example, if a company expands to a new warehouse in a city with higher hourly labor costs, they can deploy more robots to offset the cost.
The benefits of automation are becoming more undeniable, so it’s no longer a race to the innovation finish line. Instead, retailers are seeing how a flexible solution can create the flexibility to stay in the race longer, especially in times of economic uncertainty.
businesskinda.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.