Robotics has the potential to solve many of the challenges that modern distribution centers face in today’s multifaceted retail sector. But what do you need to consider before implementing them? How can you realize the full potential of robots while avoiding potential pitfalls?
The allure of robotics in the materials handling arena needs no introduction. At modern retail distribution centers (DCs), where operations often run 24 hours a day, 7 days a week, 365 days a year, robots are increasingly being added to meet ever-increasing throughput demand. According to the Association for Advancing Automation (A3), North American companies bought 12,305 robots in the second quarter of 2022—a 25% increase over the second quarter of 2021 and a 6% increase over the first quarter of 2022.While the automotive industry has historically been the biggest adopter of robotics, recent years have seen a surge in implementations focused on automating warehouse logistics, according to A3.
In reality, the use of robots in retail DCs is not new. Many warehouses, for example, have used palletizing robots effectively for years to move heavy cases and position them in the exact same way over and over—which is an incredibly difficult task for people. And that’s just one example. For facilities that already depend on advanced automation—for example integrated, shuttle-based automated storage and retrieval systems (AS/RS); autonomous fork trucks; and high-speed conveyors within integrated goods-to-picker systems—the application of robots feels like a natural progression. Robots are just the next logical step in using automation to further address and solve operational challenges.
With these opportunities, however, come questions. What do those who manage DC operations need to keep in mind when implementing robots, and how should they approach the innovations in robotics that are now viable options for many warehouse operations? To start, DC operators should keep in mind the following six important considerations.
1. What is the difference between an integrated robotic solution and robotic point solution?
There are two main types of robotic solutions. Integrated robotic solutions are closely connected to existing automated systems, such as AS/RS, via software. Robotic point solutions work independently of those same systems. Integrated robotic solutions and robotic point solutions are suited for very different applications.
In most retail DCs that have a high level of throughput made possible by already existing automated systems, robotic point solutions have less applicability. That’s because these point solutions are harder to integrate into existing processes and workflows. However, robotic point solutions can be valuable for specific tasks, particularly in facilities that still rely on more manual operations. As a result, the common vision of robots/standalone machines that do everything—the very kinds of robots that dominate the headlines and often generate the greatest excitement outside of DCs—are typically of less utility in materials handling.
Some futurists may argue with this contention or note that fully robotic warehouses in which teams of robots move all materials are possible, but the reality today is different. Robotic point solutions can be used in discreet applications, such as stacking boxes that are always the same size and weight at a set frequency, with great effectiveness. For this reason, robotic point solutions are popular in environments like manufacturing where there is significant consistency—for example welding the same identical parts together repeatedly thousands of times. For now, however, robots are not able to address the innumerable ad hoc tasks that arise in distribution centers in the standalone fashion required for them to operate entire facilities on their own. In most retail DCs, the flow of products—the products being moved, picked, packaged, and shipped—is highly variable. Due to this, most retail robotics applications are and will remain integrated solutions. For example, AS/RS—which themselves can be considered robotic—are increasingly being paired with robotic pickers with exceptional success, both in increasing throughput and maintaining order accuracy.
Such systems are tightly integrated not only with one another, but to the DC’s core network that connects everything from when orders are received to when they are picked, packaged, delivered, and automatically restocked. In this way, the line between automation and robotics is blurring. Notably, these tightly integrated systems are possible because of recent developments in two key areas.
2.How have recent innovations made robotics more applicable to DCs?
Retail DCs historically faced issues applying robots because an order might include items of dramatically different shapes, sizes, or materials. Up until recently, most robots simply could not address such highly variable, inconsistent situations—let alone with the speed and efficiency of humans. Two advancements changed this dynamic and now play a key role in addressing the increased throughput demands that often prompt warehouses to deploy robots: improvements in vision recognition systems—the cameras and sensors used to help the robot “see”—and an increase in the array of end effectors, the “hands” that enable robots to manipulate or pick items.
With advanced vision recognition, robotic pickers now can see exactly which item they are tasked with picking—even shaking the tote or carton to make them fully visible or to determine which end effector to use.
Recent innovations in end effectors are no less noteworthy. There are now many variations of end effectors, from mechanical grippers to those that use compressed air for suction. As a result, a single picking robot can be used for a wider range of applications—even holding spare end effectors that it can swap in and out as needed to process different kinds of products. The applications of this kind of technology are virtually unlimited. For example, one robot can use an end effector with suction to move soft-sided packages, such as the bags often used for food items, and then quickly switch to a mechanical gripper for heavier, hard-sided items. Furthermore, now that robotic pickers have so many end effectors available to them, they can also be used to process larger and heavier items simply by increasing the scale of the robot itself.
3. What will be your throughput needs five years from now?
Many DCs struggle to determine how much capacity and throughput to address with robots, and whether they should look at peak periods for volume or at their average throughout. The more important question, however, is, “What will your throughput look like in five years?”
Yes, robots can be used as a short-term, or even a stopgap, solution to address very specific needs in the retail warehouse. Some organizations are even beginning to offer robots-as-a-service (RaaS), a subscription-based model that lets DCs lease robots during periods of increased volume or demand rather than buying them. It’s a viable option for some organizations that ensures that robots are only paid for when they are productively working.
However, a full robotic deployment, one in which robots are integrated into the core warehouse system and structure, is a much more advanced undertaking. To ensure that it is approached correctly, retailers should audit their operation to determine what throughput looks like as well as which products comprise most of it and which might challenge robotic systems.
Integrated systems often take two or three years to deploy from assessment to design, construction, testing, and deployment, so it is also imperative to look at least five years ahead to ensure that the desired return on investment is achieved. This does not mean that robotic systems should be configured to address periods of high throughput at all times, but rather that they are capable of being sped up to handle additional capacity on a seasonal basis or as needed.
4. What role should DC employees play in a robotics implementation?
Robotic systems have the potential to dramatically enrich the lives of DC employees, but those who run retail warehouses must actively include these employees in the selection process. Employees who currently work in roles shaped by manual, highly repetitive tasks have the most to gain from a robotics implementation. These individuals can transition into the highly skilled positions needed to manage, maintain, and repair robots, and their experience in roles such as picking can be exceptionally valuable when designing and refining robotic systems. For example, skilled pickers often have ideas on how and where existing picking processes can be streamlined and which kinds of effectors should be considered. Warehouse employees in general are also very aware of the many processes that would benefit from robotic automation. This information is of exceptional value when designing the layout of any distribution center.
Directors of retail distribution centers should involve these individuals in the planning process. Most importantly, it is imperative that they view robotic systems as an investment that complements warehouse staff and as a strategy that is proven to decrease employee churn. It is equally important to map out a career path for those employees whose roles will be automated or addressed by robots. Investing in and upskilling these employees is something that every organization investing in robots should examine.
5. How will you handle maintenance and repairs?
Robotic warehouse solutions are complex, and a breakdown can have a dramatic impact on operations. Once the decision to automate a DC with robotic systems is made, it is crucial to establish a strong maintenance and repair plan. This includes ensuring that adequate service level agreements are established and that the retailer has access to spare parts and experts.
One highly effective strategy for retailers is to build and hire their DC robotics team a full six months before the facility becomes operational. This allows the team to work side by side with the vendor in the testing and adjustment of all systems, simultaneously gaining familiarity with often expansive facilities.
Existing warehouse employees who are intent on learning about robotics and want to pursue a career in the field are ideal candidates for these assignments. Providing them with the opportunity to work directly with the vendor enables them to extract insights that have accumulated from many years of robotics work. Such opportunities should not be missed.
6. What tasks are robots still not well-suited for?
Enthusiasm for robotics is warranted. However, it is important for retailers to realistically appraise the capabilities robots bring to their facilities as well as which tasks robots are not yet ready to do at the velocity and scale required.
Two common tasks associated with the holiday shopping season offer a great example. While robots are proven in fulfillment operations, the reverse logistics involved during the returns season is problematic. While robots can scan returned items for volume and weight to determine if they are complete, today’s vision recognition systems are not ready for prime time use in the returns market.
For example, a robot can determine if both pairs of shoes from an order were returned and that they are the right kind, but it cannot determine if those same shoes were worn and can be sold as new. In the same way, a robot can determine if a returned television is the right model, but it cannot determine if it was dropped or damaged. People must still provide that critical oversight.
Vendors are working to quickly develop innovations to solve needs just like this. In the meantime, however, it’s important to leverage robots where they have the most potential for a return on investment.
Be thoughtful and realistic
It is also important to realize that robots are not suitable for every operation. Ultimately, what is important is not how many robots you used to address a problem but whether or not the problem was actually solved. Innovation for innovation’s sake just isn’t feasible for many brands, and not all organizations have the resources required to deploy large-scale robotic systems.
All retailers are, however, in a position to streamline their fulfillment operations so that they process orders more efficiently and accurately, retain valuable employees, increase the return on investment of their DCs, and address future periods when throughput needs are higher. Before they implement any automation, companies should make sure that it is based on best practices, done with reputable and experienced partners, and designed to address their own unique needs.
By keeping the above considerations in mind, those who oversee the operation of retail DCs can make sure that if they do move forward with a robotics strategy, they do so in a thoughtful and realistic way.
Those in our profession will likely look back on the present era as one shaped by unprecedented change and significant steps forward. Only time will tell if this is the beginning of the golden age of robotics or another chapter in the longstanding evolution of automation in retail DCs. What is certain is that those who embrace robotics thoughtfully, realistically, and methodically will see success in their fulfillment operations.
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
Jason Kra kicked off his presentation at the Council of Supply Chain Management Professionals (CSCMP) EDGE Conference on Tuesday morning with a question: “How do we use data in assessing what countries we should be investing in for future supply chain decisions?” As president of Li & Fung where he oversees the supply chain solutions company’s wholesale and distribution business in the U.S., Kra understands that many companies are looking for ways to assess risk in their supply chains and diversify their operations beyond China. To properly assess risk, however, you need quality data and a decision model, he said.
In January 2024, in addition to his full-time job, Kra joined American University’s Kogod School of Business as an adjunct professor of the school’s master’s program where he decided to find some answers to his above question about data.
For his research, he created the following situation: “How can data be used to assess the attractiveness of scalable apparel-producing countries for planning based on stability and predictability, and what factors should be considered in the decision-making process to de-risk country diversification decisions?”
Since diversification and resilience have been hot topics in the supply chain space since the U.S.’s 2017 trade war with China, Kra sought to find a way to apply a scientific method to assess supply chain risk. He specifically wanted to answer the following questions:
1.Which methodology is most appropriate to investigate when selecting a country to produce apparel in based on weighted criteria?
2.What criteria should be used to evaluate a production country’s suitability for scalable manufacturing as a future investment?
3.What are the weights (relative importance) of each criterion?
4.How can this methodology be utilized to assess the suitability of production countries for scalable apparel manufacturing and to create a country ranking?
5.Will the criteria and methodology apply to other industries?
After creating a list of criteria and weight rankings based on importance, Kra reached out to 70 senior managers with 20+ years of experience and C-suite executives to get their feedback. What he found was a big difference in criteria/weight rankings between the C-suite and senior managers.
“That huge gap is a good area for future research,” said Kra. “If you don’t have alignment between your C-suite and your senior managers who are doing a lot of the execution, you’re never going to achieve the goals you set as a company.”
With the research results, Kra created a decision model for country selection that can be applied to any industry and customized based on a company’s unique needs. That model includes discussing the data findings, creating a list of diversification countries, and finally, looking at future trends to factor in (like exponential technology, speed, types of supply chains and geopolitics, and sustainability).
After showcasing his research data to the EDGE audience, Kra ended his presentation by sharing some key takeaways from his research:
China diversification strategies alone are not enough. The world will continue to be volatile and disruptive. Country and region diversification is the only protection.
Managers need to balance trade-offs between what is optimal and what is acceptable regarding supply chain decisions. Decision-makers need to find the best country at the lowest price, with the most dependability.
There is a disconnect or misalignment between C-suite executives and senior managers who execute the strategy. So further education and alignment is critical.
Data-driven decision-making for your company/industry: This can be done for any industry—the data is customizable, and there are many “free” sources you can access to put together regional and country data. Utilizing data helps eliminate path dependency (for example, relying on a lean or just-in-time inventory) and keeps executives and managers aligned.
“Look at the business you envision in the future,” said Kra, “and make that your model for today.”
Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”
In McCaskill’s comparison, just as a doctor might have to break some ribs through energetic CPR to get a patient’s heart beating again, a failing warehouse might need to recover by “breaking some ribs” in a business sense, such as making management changes or stock write-downs.
Once the business has made some stopgap solutions to “stop the bleeding,” it can proceed to a disciplined recovery, she said. And to reach their final goal, managers can use the classic tools of people, process, and technology to improve what she called the three most important key performance indicators (KPIs): on time in full (OTIF), inventory accuracy, and staff turnover.
CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.
EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.
Citing data from the Coyote Curve index (which measures year-over-year changes in spot market rates) and other sources, Adamik outlined the dynamics of the TL market. He explained that the last cycle—which lasted from about 2019 to 2024—was longer than the typical three to four-year market cycle, marked by volatile conditions spurred by the Covid-19 pandemic. That cycle is behind us now, he said, adding that the market has reached equilibrium and is headed toward an inflationary environment.
Adamik also told attendees that he expects the new TL cycle to be marked by far less volatility, with a return to more typical conditions. And he offered a slate of supply and demand trends to note as the industry moves into the new cycle.
Supply trends include:
Carrier operating authorities are declining;
Employment in the trucking industry is declining;
Private fleets have expanded, but the expansion has stopped;
Truckload orders are falling.
Demand trends include:
Consumer spending is stable, but is still more service-centric and less goods-intensive;
After a steep decline, imports are on the rise;
Freight volumes have been sluggish but are showing signs of life.
CSCMP EDGE runs through Wednesday, October 2, at Nashville’s Gaylord Opryland Hotel & Resort.