Industrial Automation Magazine India

The traditional warehouse is being transformed dramatically

Published on : Tuesday 30-11--0001

Smart forklifts, AGVs, autonomous mobile robots – what are the new trends in material handling?

The material handling space is moving toward integration of automated vehicles and system intelligence guided processes. This is being necessitated by many external and internal factors like:

•     Growing Online Shopping – triggering need for faster processes
•     Mass Personalisation – leading to high variety in order sizes, product portfolio and service level commitments
•     Changing workforce – high attrition rates, low availability of skilled people, time to adapt to changing processes, etc., and
•     Sustainability – growing focus on energy efficiency, emission control and providing healthy and safe workplaces.

There are simultaneous developments in technology which are being adopted, to respond to the challenges, like:

•     Autonomous vehicles
•     New energy sources
•     Robotics & automation
•     Sensors & IoT
•     Mobile & wearable computing, and
•     Big data analytics.

As a result, the emerging trend would be towards intelligent automation in material handling:

•     Deployment of automated forklifts and reach trucks, AGVs, AMRs and picking robots
•     Connected equipment providing real time data of operators, equipment and processes
•     IoT driven equipment lifecycle management, fleet management, etc
•     AI based process guidance focused on optimising various parameters like vehicle path, vehicle utilisation, and
•     Dynamic allocation and deployment aligned to performance parameters, viz., Service Levels, Order TAT commitment, Productivity targets, etc.
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What should be the ideal mix for efficient in-plant material handling?

The ideal mix of material handling systems would vary across industries, order and fulfilment scenarios, product portfolio and stage of operation.

The autonomous systems and intelligent automation driven material handling would be more relevant for environments involving high product/SKU variety, multi-SKU orders, varying order sizes, high service level commitments, etc. Industries like eCommerce, retail, auto components, FMCG, pharmaceuticals, etc., are thus better suited for application of these solutions. However, in case of low product/SKU variety or relatively higher order servicing time environments, conventional material handling systems would still be relevant.

Similarly, based on process stage like production feed from stores, transfer to warehouse, etc., specific material handling solution should be identified.

It is advisable to identify the best suited solution and automation level for the specific requirement than take a general approach.

The traditional warehouse is being transformed dramatically – what are the implications and lessons here?

The traditional warehouse is indeed being transformed dramatically – more in some sectors than others. This would have multiple implications for operations and warehouse management like:

•     Higher equipment and asset utilisation – leading to optimised investments
•     Enhanced productivity of processes, manpower and assets
•     Ability to onboard new operators faster
•     Reduced dependence on operator skills
•     System driven optimisation of processes, manpower deployment and asset utilisation
•     Reduced operating costs
•     Reduced MHE movement on the floor – safer workplaces, and
•     Ability to service larger variety of orders and order sizes in reduced time.

Organisations, however, would need to keep in consideration some critical factors before embarking on transformation initiatives like:

•     Evaluate impact and benefit from automation holistically than on a piecemeal basis
•     Choose flexible automation vis-à-vis fixed automation. Fixed automation could itself become deterrent to upgrading further
•     Adopt automation which is easy to integrate
•     Adopt automation which is agile and could support re-engineered processes, and
•     Deploy automation which is modular and scalable.

How is the Supply Chain Process impacted by digital transformation?

Digital transformation in supply chain would have varying impact on different parts of supply chain. While in upstream processes, this would mean better coordination with vendors and improved visibility of supplies, it would also provide opportunities to reduce inventories and working capital.

Similarly, in downstream processes like storage, manufacturing and warehousing – it could generate significant value in terms of space utilisation, better utilisation of manpower and assets, real-time visibility of process status, adherence to compliance requirements like FIFO, etc.

In general, digital transformation could help organisations significantly improve the velocity in their supply chains while providing end-to-end visibility.

However, the transformation need not be a ‘big-bang event’ – as such initiatives have historically been. The transformation could be a series of automation activities ‘within jobs’ than eliminate or replace entire jobs. This would also mean lot of collaboration of automation equipment, people and system intelligence in jobs.

If historically purpose of automation has been to produce and serve cheapest, in future would be about being smartest.

Is this the right time for enterprises to outsource supply chain management to professional organisations?

It may not be possible to outsource supply chain management as whole to professional organisations.

Organisations should identify the core and differentiating activities as per their value chains and consider outsourcing others. In most cases, Supply Chain Planning may need to be done by the organisation internally. Depending on the value chains, Sourcing and Raw Material Management, Order Management, Distribution, Last Mile Delivery, etc., could be critical.

In general, activities like Stores Management, Warehousing, IT Systems and Software, Manpower Management and Transportation could be more apt for outsourcing to professional organisations.

Warehousing in India is still in the early stages of automation barring some e-tailers. What are the barriers here?

Warehousing in India is in early stages of automation when compared to countries in Far East, Europe or Americas.

Some of the key reasons for slow adoption of automation in warehousing could be identified as

• Relatively lower focus on product Quality in warehouse – While lot of resource and efforts and spent on ensuring quality in manufacturing, the same is not the case when it comes to warehousing
• Availability of manpower – Warehouses tend to be outside city limits and manpower availability at relatively lower costs discourages automating processes
• ‘Payback’ as a key decision criteria – Decisions on automation continued to be based on payback considerations. Many important and critical parameters like compliance adherence, errors in activities, service failures, etc. tend to be ignored while evaluating automation decisions, and
• Few innovative home grown companies – Due to relatively lower innovation by domestic companies in this space, warehouse automation systems, in general, been adopted by domestic companies from global players or is being sold by the global players directly. This has kept the costs high and prohibitive for adopting organisations in many cases.

Anirban Mazumdar has worked across industry supply chains over more than 18 years, helping improve their performance. As an industry and consulting professional, he has experience of working with sectors like FMCG, retail, healthcare, pharma, industrial products, process, auto and logistics. He has worked on supply chain strategy, supply chain transformations, performance improvement, developing and driving growth agenda for organisations. Currently, as ThinkLink’s CEO, he focuses on helping customers adopt integrated automation solutions in their warehouses and improve their performance in this space.