The age of co-bots and autodocks

As e-commerce giants strive to push unit costs down and retailers increasingly outsource their logistics to 3PLs, the sector is going through a major technological revolution. By Beata Socha The e-commerce business is growing steadily at a double-digit pace, but it’s also becoming a very competitive market. Zalando, which took the Polish online fashion market by storm a few years back already has several direct competitors, including Answear and Sarenza (footwear retailer). Even a small-time retailer has to have an online store these days. While the set-up may be relatively easy, many a retailer has learned that running an e-commerce business means more than just signing a deal with a courier company. Especially when storage and delivery costs begin to soar. [negative]The high cost of automation, coupled with the volatility of online businesses, results in most online players being more prone to invest in flexible staff... Investment in warehouse automation is therefore usually the case for large e-commerce pure players.[/negative] “The e-commerce battle will be won by the player with the lowest handling costs per order,” said Walther Ploos van Amstel, professor of City Logistics at the Amsterdam University of Applied Sciences. “The consumer wants more delivery options. Amazon plans to have a total of 90 distribution centers across Europe in order to be close enough to consumers. Handling and transport make up just over half of Amazon’s costs. That’s around seven euros per order,” he added. Expensive toys It’s hard to find a retailer that has invested more in automation than Amazon. Stories are told about drones flying around Amazon’s fulfillment centers while robots wrap and unwrap bulk parcels. The efficiency boost can be staggering. “An order picker can be trained for the job in just 30 seconds,” Ploos van Amstel explained. Just like car manufacturing, today’s warehousing is becoming increasingly sci-fi like: from Cartesian depalletizers, which require little or no human interaction, through automatic wrapping and labeling modules to automated docking systems. [caption id="attachment_95193" align="alignleft" width="300"] Image: Shutterstock[/caption] “Amid the increasing use of robots in warehouses, a new generation of robots has been introduced to the market. These machines, called ‘co-bots’ are designed to work together with people. They are equipped with sensors that detect people working nearby and are programmed to optimize and standardize simple repetitive manipulation tasks and to significantly reduce employees’ musculoskeletal disorders,” FM Logistic said. “After having equipped the module with a speech synthesizer, the Automation Department of FM Logistic will soon also give it sight through a special app,” the firm added. Even manual order handling can become more efficient through the application of Augmented Reality tools, such as Google Glass. Tests performed by Dutch e-commerce firm Active Ants show that Google Glass can increase order-picking speeds by 15 percent and reduce errors by 12 percent, according to research cited by Martijn Lofvers and Marieke Lenstra. Who can afford it? Drones, robots and AR tools are not cheap toys, mind you, and only the largest players can afford the cutting-edge technology. For the majority of e-commerce firms, these costs are just too steep. “Importantly, the high cost of automation, coupled with the volatility of online businesses, results in most online players being more prone to invest in flexible staff, which can handle increased numbers of operations during sales peaks. Investment in warehouse automation is therefore usually the case for large e-commerce pure players,” said Jan Jakub Zombirt, associate director, Research and Consulting, JLL. [negative]The e-commerce battle will be won by the player with the lowest handling costs per order.[/negative] But there are also simpler ways of boosting productivity in the warehouse. “Automation and WMS [Warehouse Management Systems] enable a more efficient inventory and delivery management that includes e.g. parcel tracking, which is highly appreciated by customers, and enhances their shopping experience. It also facilitates warehouse operations and helps to reduce the number of staff,” Zombirt explained. Third-party option While e-commerce giants gear up, smaller retailers, including those who are only dipping their toes in the e-commerce ocean, are realizing the best response cost-wise is to outsource their warehousing and deliveries to third-party logistics firms (3PLs). The same goes for manufacturers who decide to offload their internal logistics onto outside providers. [caption id="attachment_95198" align="alignright" width="150"] Tomasz Kur[/caption] “Outsourcing these days is not only about saving money. The financial aspect is important but it can also be achieved by technological upgrades and modern management systems. Today, outsourcing is about allowing the company to grow,” said Tomasz Kur, director of Customer Operations, at Seito. As a company grows, so does its client base and order numbers. While more orders is good news to almost any retailer, it also means more complex logistics. The two biggest challenges logistics operators are facing are same-day deliveries (100 percent of those polled) and return logistics (60 percent), according to a study by JLL and Prologis. Cross-border sales came in third with 40 percent of those surveyed pointing to it as a major challenge. Getting closer The challenges and pressure to reduce costs have an impact not only on the way warehouses are equipped, but also on where they are located. “Whereas today, same-day delivery can be a unique selling point, it will become the standard in the near future. In order to keep up with customers’ expectations, 3PLs should be seeking locations which are in close proximity to end customers, and pursue further efficiencies within their supply chains and warehouse activities,” Zombirt concluded. Who knows, maybe in a couple of years our orders will be picked, wrapped and labeled by robots in fully automated warehouses located just outside the city and then delivered to our doorstep by drones. Amazon has promised its first drone deliveries in 2017!