The Automated Warehouse: Making Space For Retail Robots
By Valentyn Kropov, VP of Client Success, SoftServe
As customer expectations shift ever closer to instant gratification, retailers must optimize more quickly than ever. While there is much to be said for automation within existing networks, systems, and applications, one of the most overhyped, underutilized automation efforts is robotics.
The physical manifestation of automation, robotics manages the retail-specific challenge of working with a tangible product. While robotics has long been implemented in the manufacturing stages, modern retailers are getting more creative with the solutions that move product from the click of a mouse to the customer’s door. Smart robotics enhanced with artificial intelligence (AI) is revolutionizing the applications for retailers. Sophisticated sales androids may be on the horizon as the technology grows, but the biggest area of interest for retailers is implementing robotics in the warehouse.
Cost-effective and efficient, warehouse robotic units do not require the sensitive usability software that comes with customer interactions, nor do they necessarily need to be the heavy mechanical arms that manufacturers use. Warehouse robots, by contrast, are built to be mobile, continually overseeing warehouse operations for ongoing optimization and reading data that feeds into top-level decision making.
Navigating A Labyrinth Of SKUs
For all retailers, the warehouse is integral to business operations — the hub for organizing and shipping all merchandise. When storing hundreds — if not hundreds of thousands — of products, organization and proper inventory are key for prompt delivery to the customer.
Implementing robotics in the warehouse becomes a key driver for efficiency — improving both productivity and customer experience by removing friction in the delivery process. There are two areas of warehouse operations where robotics serves a valuable return on investment: inventory efforts and order fulfillment.
Smart robotics enables the real-time analysis of stock, assessing the popularity, demand, and condition of each product. In addition to constant surveillance over all products within the warehouse, robotic units also can map out a structure for optimizing the locations of all products.
TagSurveyor is a robot specifically made to scan radio-frequency identification (RFID) tags on various products. The robot roams the aisles of the warehouse to scan data embedded in RFID labels through radio waves. Not only does it track known product, it also uncovers any lost or missing product that may have slipped through the proverbial cracks of the warehouse infrastructure.
Tracking inventory autonomously becomes invaluable for enterprise retailers, saving workers time and companies money while reducing human error. According to Supply Chain Dive, RFID robots cost $50,000, but “the typical customer saves up to a million per year in labor reduction, waste reduction and inventory optimization.”
These robots are also programmable for data collection to track stocking habits that inform larger decision making. Data can range from product value and expiration information to the mapping of the warehouse itself, finding the optimal design based on the location and the destination of each product.
But inventory isn’t the only robotics implementation within the retailer’s grasp.
Traditionally, fulfillment requires human involvement. Human workers must locate a product and prepare it for shipping. However, today’s influx of online orders paired with the high expectations set by trailblazers like Amazon means retailers must accelerate fulfillment or risk losing precious customer loyalty.
Smart robotics offers a way for retailers to expedite fulfillment without sacrificing efficiency. Unsurprisingly, Amazon is at the forefront of execution. In each warehouse, Amazon utilizes the help of robots no bigger than three square feet to fetch different groupings of products on heavy shelves. The shelves are then delivered to employees that pick and choose different items for various orders and the robots move the shelves back to the optimal location. All told, the robotic units are able to do in 15 minutes the assorted moving, choosing, organizing, and packing that can take a single worker an hour. And, as a result of optimized traffic, the warehouses are able to hold 50 percent more product than those without robots. As Amazon continues to iterate enhancements to make robot-human interactions more seamless, their robots continue to be a main driver of productivity.
And Amazon isn’t the only retailer innovating with custom robotics.
There’s a sizeable amount of business value in robotics for retailers with product that demands high turnaround, such as grocery. For grocers, produce and other perishables need to be moved before they expire.
British grocer Ocado created a custom robotic warehouse, completely automated to fulfill online orders. Instead of simply innovating an existing warehouse like Amazon, Ocado created one from scratch to maximize space, eliminating aisles and filling the majority of the building with produce stock for order fulfillment. Robots move on tracks that separate product from product, and hover over shelves to grab individual items to add to specific orders. The 1,100 robots in the 18-acre warehouse are able to complete 65,000 customer orders every week, moving time-sensitive product and reducing waste. Though this particular model has greater risk (its construction does not allow for human employees, making perfect design imperative), production is at a premium, providing substantial return on investment when it operates as designed.
Breaking Into Robotics
While for many the idea of robotics may seem complex, implementing robotics in the warehouse is rather straightforward. Depending on the demand for product organization and order fulfillment, introducing robotics can be as simple as programming existing bots on the market and tailoring them to specific retail needs. However, for enterprises or e-commerce businesses that must move hundreds of thousands of products, a more tailored solution is a more prudent choice.
In either scenario, increased automation provides a valuable return on investment. Two years after acquiring the robotics that power its warehouses, Amazon reported a 20 percent decrease in operational costs.
Robotics for both inventory and fulfillment are two significant steps to disrupt any retail business, as they are programmed to provide business leaders a better understanding of the layout and space utilization of each warehouse. Additionally, due to the construction of most warehouses, moving and rearranging products for optimization is relatively quick and easy compared to the longer-term results.
Implementing robotics is a valuable investment for any retailer, especially in the warehouse. A low-risk, disruptive solution — robotics provides true business value that can be realized today. Tracking inventory, speeding fulfillment, and even mapping the entire building for optimization, robotics has the power to disrupt the entire business for the better, without breaking the budget.