How ​Robotics Will Change Supply Chains In The Next Decade

Robots are now commonly seen in many warehouses, but how will they develop in the next 10 years?

What else is set to shape the future of supply chains? The journey to S&OP excellence is one of them. Check out the S&OP Innovation Summit

Supply chains and robotics are a natural relationship.

Many of the tasks that are vital to supply chains are also simple and monotonous. The movement of products from one area of a warehouse to another for instance, is something that needs to be done but is the very essence of laborious. It requires little skill and would not mentally stimulate most people.

We have seen some companies who have taken this on board and automated many of their warehouse systems to reduce human labour costs and headcount, whilst improving efficiency and reducing mistakes.

Amazon is the prime example of this.

Having bought Kiva systems for an estimated $775 million, they have implemented the Kiva system across several of their warehouses. The system consists of robots moving stacks or individual boxes throughout the warehouses without the need for human input.

This has improved their efficiency considerably as well as allowing them to become more profitable whilst keeping their workforce to a minimum level.

This is not something that is relevant only to the largest companies either. We have seen that even in small to medium sized companies that robots that are relatively cheap (a Baxter robot costs around $25,000) who can work for thousands of hours without stopping. In ‘Robots and the “New” Supply Chain: 2015-2020’ it is noted that a Baxter robot had worked for over 2000 hours straight sorting plastic in a factory.

A work rate like this would not be possible or affordable with a human workforce. It would require 4 shifts every 24 hours, at the going rate of $9 per hour it would cost over $19,000 over the same period, which is almost 80% of the entire cost of the robot.

This is not to say that warehouses are the only place that we are likely to see automation and robotics prosper in the future.

We are seeing more and more stories discussing the use of drones or automated trucks, that may well revolutionize the way that goods are transported once they leave the warehouse.

At the moment nearly 1/3 of all US haulage drivers are approaching retirement age, meaning that this workforce needs to be replaced. Daimler trucks are looking at ways that this could be done through automation and smart, economical vehicles. They believe that they would be able to have a fully automated truck within the next decade, which would not only be able to quickly and safely move goods, but also run cleaner and cheaper than current models.

In addition to automated trucks, the idea of drones has caught the attention of the media across the world, with several companies looking at the possibilities of using them for the mythical sub-30 minute delivery. They could also be used to deliver to more remote areas without the need for a van or lorry to travel significant distances to deliver to isolated locations.

Amazon and Dominos are two of the best known companies who are currently looking at the use of drones and early tests have shown the possibilities that they have for delivery.

At the moment drones can deliver smaller packages, but may be able to develop to include larger items and varying shapes/sizes. They are also limited in their use of air space as domestic air controllers are seeking to maintain a safe environment for traditional aircraft.

This causes several issues not only in the limitation of air space use, but also in the kind of places that they can deliver to.

Urban areas are naturally where the majority of people are condensed into a smaller area, meaning that more deliveries are likely to be delivered in these areas. Given that these not only have taller buildings and the increased use of overhead wires, there is likely to be an increased amount of air traffic.

From helicopters who can fly over urban areas to cranes on large construction sites, the ability to safely deliver within these areas could be a major problem for these companies. If there were to be one accident within the initial period of implementation, then it could cause these programmes to be significantly damaged or even cancelled moving forwards.

However, the one thing that robotics within the supply chain needs to consider is the implications that it may have on the perception of the company. The main reason for this is in the loss of jobs that robotics can often create.

A prime example of this is in Skechers in the US who, according to ‘Robots and the “New” Supply Chain: 2015-2020’ decreased their workforce by around 75%. These figures may damage the reputation of the brand, in much the same way that Amazon’s treatment of employees has hit the headlines and damaged their reputation.

However, it is clear that robotics have a significant impact on supply chains across the next decade. Their adoption will hinge as much on the public perception as the profits they create, but ultimately decreasing human error and improving efficiency is their core purpose. 

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