Robotics—and the software used to direct and guide them—have evolved to the point where they are now well-suited to the dynamic and variable warehouse environment. As a result, we are about to see a rapid adoption of smart robots.
For years, intralogistics operations have been trapped in a mostly manual status quo, where the majority of tasks and activities performed within distribution and fulfillment centers are done by human beings. But we are now on the cusp of an explosion in automation, ignited by the increasing sophistication of robotic solutions designed for the warehouse. These “smart,” autonomous robots not only automate the “tasks of the hands”—such as picking and packing—they also share data in real time for faster and better decision-making. They can sense their environment, carry out computations to make decisions, and perform actions automatically, rapidly, and accurately.
Experts predict that the use of robotics in supply chains will rapidly go beyond fringe implementations to mainstream use and being considered “table stakes.” The analyst group Gartner says, “By 2026, 75% of large enterprises will have adopted some form of smart robots in their warehouse operations.” This rapid adoption is being driven in part by the ability of smart robots to lower touches and reduce reliance on manual labor. But there are other factors at play as well, including:
Cost and lead times for smart robots are dropping;
Use cases are multiplying (as can be seen in the case studies at the bottom of this article);
Return on investment (ROI) is improving, thanks to robots that require limited or no coding and “low-touch” robotics systems; and
The intelligent logistics software that controls robotic processes (for example, warehouse management systems, warehouse execution systems, and warehouse control systems) is maturing.
At the same time, technology enablers for robotics are converging. These enablers include:
Sensors and vision technology that give robotics the ability to see, sense, and interact with objects;
Standard interfaces and open protocols that enable system wide connectivity and communication between robots;
Edge and cloud computing that facilitate high-speed data analysis and data sharing, as well as real-time operations management; and
Machine learning and artificial intelligence (AI) that makes autonomous robotics possible and enables continuous improvement .
Everything is coming together to mark the beginning of a golden age of robotics. There is already an enormous range of robots on the market. This includes standalone robots for tasks like assembly, picking, and transportation, as well as cobots and even flying robots for inventory management. At the other end of the spectrum are comprehensive solutions that automate entire intralogistics processes. All of these robotics vary widely and have impacts on implementation timeframes, performance, and payback expectations.
In this article, we focus on autonomous robotics for core intralogistics processes, because they have the biggest potential to make a positive impact on overall operations. Today, there are autonomous robotic systems for every core logistics process, including storage and retrieval, conveying and sorting, picking, packing, and palletizing. These types of robots range from shuttle systems and picking robots to pocket sorters and autonomous mobile robots (AMRs). The sidebar below presents
four proven applications of autonomous robotics in distribution and fulfillment operations.
Getting robotics right
When you think of a robot in the warehouse, the first thing that probably comes to mind is an AMR zipping around the facility transporting orders or a robotic arm picking goods. But a robot is so much more than the hardware that you see on the floor. It’s an integrated system composed of hardware, software, vision technology, sensors, and interfaces.
Almost half of the respondents (46%) to a “2022 Intralogistics Robotics Study” by Peerless Research Group recognize that fact, saying they would prefer to buy their robotic solution as an entire integrated system—a pure capital expenditure initiative—that includes hardware, software, support, and maintenance.
In fact, key to the development of this blossoming golden age of robotics is the software used to direct and guide this next generation of robots. Robots are only as good as the software that drives them. Autonomous robotics for distribution and fulfillment operations require three types of software:
1. Intelligent logistics software for dynamic orchestration of complex distribution and fulfillment processes. This software includes warehouse management systems (WMS), warehouse control systems (WCS), and systems for gathering and analyzing the real-time data coming from the robots and other machines, as well as packing software, analytics, computerized maintenance management systems, and more.
2. A universal AI platform that can be applied to any use case or customer environment. The AI enables robots to quickly learn to manipulate objects without being told what to do.
3. An automation data system for the collection, distribution, and maintenance of item attributes. It turns out, robots need a lot of data to function efficiently. For example, fully automated palletizing systems may require up to 50 item attributes for correct handling. Insufficient automation data leads to damaged items, downtime, and, in some cases, cleaning costs.
For robots, data drives performance. Unfortunately, today’s master data wasn’t designed for robotics. It often doesn’t include information like packaging type, contents, center of gravity, tilting behavior, stackability, and pickability, to name a few.
Manually recording all this data takes time and money, and the quality of the data may suffer. You have to look at the item, measure its dimensions, enter all the data, and check twice to make sure everything is correct. It’s not an efficient process.
An automation data system records all necessary article attributes in less than 30 seconds. It essentially decodes an item’s “DNA” and adds this information to the master data. The software also distributes, manages, and continuously improves data quality using self-learning AI. It even shares article properties across networks to avoid damage during transport. It provides one central source of data.
Build a business case before you buy
Although smart robots hold great potential to transform distribution and fulfillment operations, it’s important to have a plan and business case in place before trying to implement them. As the 2022 MHI Annual Industry Report says, “The number one barrier to adoption is the lack of a clear business case.” Successful implementation of autonomous robotics requires a thoughtful approach before you buy. The following steps can help you evaluate your options and choose the right robotic solution for your operation:
1. Define your near-term objectives. What are you trying to do? Alleviate labor pains? Accelerate throughput? Increase storage capacity? Improve employee and customer experiences? Do more in the same space? Enable sustainable operations?
2. Determine your key decision drivers. What will drive your decision? Cost? Lead time? Cubic utilization? Throughput? Prioritize these to ensure you make the best decision based on your business drivers and available budget.
3. Evaluate solutions and vendors. It’s important to be aware of the variety of available applications. The
sidebar below presents just four of the many use cases. Furthermore, don’t just buy a robot. Buy a system and the organization that backs it. Investing in robotics shouldn’t be transactional. It should represent the beginning of a mutually beneficial and ongoing relationship.
4. Create a multi-year map for your journey. What are your long-range goals? Do you ultimately want to achieve a fully autonomous supply chain? Build resilience? Get to net-zero greenhouse gas emissions?
Evaluating and planning a robotic implementation can take time, but it is important not to delay the process. As Gartner says, “Supply chains will become autonomous faster than you expect.”Supply chain leaders are already making autonomous robotics for core intralogistics processes a key component of their strategies. You should too.
Autonomous robotics is a rapidly growing area of automation in the warehouse with an increasing number of possible applications. The following case studies present just four examples of autonomous robots and possible applications.
The incredible shrinking process
One of the world’s largest retailers was looking to build a next-generation fulfillment network that would be able to rapidly pick and ship online orders to meet aggressive delivery agreements. The retailer also wanted to create a positive workplace that would attract and retain employees.
The core component of their high-tech fulfillment centers is a massive robotic shuttle system that spans from floor to ceiling and maximizes every square inch of its footprint. With this advanced system, the retailer:
Doubles storage capacity, because the system can accommodate millions of items,
Doubles the number of orders they can fill in a day,
Improves the comfort for employees who no longer have to walk up to nine miles each day to retrieve goods, and
Creates new tech-focused jobs that provide more meaningful work and higher wages for associates.
The robotic shuttle system significantly streamlines the fulfillment process because it packs a lot of functionality into one system. It automatically stores stock and overstock. It picks, buffers, and sequences orders. It also supplies goods-to-person workstations and replenishes other work areas.
Instead of a manual, 12-step process, the retailer now has an automated five-step process. The shuttle system seamlessly integrates with the intelligent logistics software, making it possible for the retailer to fulfill orders in just 30 minutes from click to ship.
Robots are now in fashion
Apparel picking is notoriously difficult for robots. There’s a vast range of product sizes, shapes, textures, weights, and packaging. Items change shape when picked up. Stock keeping units (SKUs) change during seasonal rotations. It’s virtually impossible to hard-code all the variables.
A global third-party logistics provider (3PL) conquered these obstacles with a robotic system that picks into a pocket sorter. The robotic picking system has a “brain,” so no hard-coding is required. It can handle virtually any item and unstructured scenario—even transparent, reflective, and floppy polybags.
The robot brain rapidly processes visual information and identifies the optimal gripper, gripping point, and gripping speed. Then the robot arm places items onto a pocket conveyor for sorting, grouping, and routing to packing stations. When new SKUs are introduced, the AI brain infers from past experiences, learns with every grip, and shares learnings with other robots via the cloud.
Item DNA created using the automation data system provides an additional performance boost. The software automatically captures item attributes, adds them to the master data, and gives all connected robots the information they need to function more efficiently.
The automation data works in tandem with the AI brain. One example? Some apparel have no suitable suction spots, so robots can’t pick them. Without automation data, articles will be rejected by the robotic picking system and sent back to the robotic shuttle system. This negatively impacts performance. With automation data, the item will be flagged during decanting and never sent to the robotic picking system in the first place.
Elevating efficiency
A global online retailer was challenged with consistently meeting consumer demands for faster delivery. The company also wanted to utilize space more effectively to accommodate a broad and constantly changing range of goods.
The answer? A pocket sorter that uses overhead space. Everything from clothing to shoes to accessories and more are conveyed, buffered, and merged to quickly complete online orders.
The robotic pocket sorter is part of a seamlessly integrated system, which includes a robotic shuttle and robotic picking and packing systems as well as intelligent logistics software. The software controls, monitors, and optimizes all of the processes. Items are handled in the most efficient way possible because the master data has been enhanced to include item attributes.
The shuttle system delivers items to both manual and robotic picking stations, where items are automatically inducted into pockets. Goods can be dropped at any location in the warehouse—without the pockets slowing down or stopping—thanks to a patent-pending pocket mechanism, which opens and closes automatically. RFID technology keeps track of every single item.
Single items are sent to pack stations in the right sequence using intelligent matrix sortation software, which also contributes to the pocket sorter’s ability to process up to 50,000 items per hour. The fully automatic pocket sorter gives the online retailer what it needs to meet today’s service level agreements (SLAs) while at the same time being scalable enough to meet tomorrow’s needs.
Shaping the future of e-grocery
A national grocer was among the first to pilot automated micro-fulfillment centers (MFCs) to handle e-grocery orders. The grocery chain deployed its first automated MFC in 2019 and opened seven new MFCs in 2021. The chain believes e-grocery will eventually comprise 20% of its business.
To increase the speed, capacity, and accuracy of its e-grocery operations without increasing the footprint, the grocer is deploying next-generation MFC technology. The company’s MFCs use autonomous mobile robots (AMRs). These “open shuttles” roll independently within the MFCs and are completely safe for use around people.
The AMRs seamlessly integrate with the robotic shuttle systems. Goods are stored in the system and picked at goods-to-person workstations. Completed orders are transported by AMRs to a flow rack and assigned a buffer conveyor. This ensures the right orders get to the right customers at the right time.
The AMRs require very little space, because they turn on their own axis. As a result, they can work in tight spaces with narrow aisles. That makes AMRs more flexible, cost-effective, and space-efficient than automated guided vehicles (AGVs). They’re faster and easier to install too, because they require:
No structural modifications,
No special pathways or fixed routes,
No additional markers,
No induction loops in the floor, and
No human oversight during operations.
The AMRs use virtual lines defined and managed by intelligent fleet control software, which ensures smooth and efficient traffic flow. The software also ensures the vehicles avoid humans and other obstacles as they transport totes full of groceries.
The national grocer believes automated MFCs are a key element to their future success. Their e-grocery business has become more strategically important to them. Their goal is to make e-grocery a competitive advantage. AMRs will help them do it.
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
Census data showed that overall retail sales in October were up 0.4% seasonally adjusted month over month and up 2.8% unadjusted year over year. That compared with increases of 0.8% month over month and 2% year over year in September.
October’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were unchanged seasonally adjusted month over month but up 5.4% unadjusted year over year.
Core sales were up 3.5% year over year for the first 10 months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023. NRF is forecasting that 2024 holiday sales during November and December will also increase between 2.5% and 3.5% over the same time last year.
“October’s pickup in retail sales shows a healthy pace of spending as many consumers got an early start on holiday shopping,” NRF Chief Economist Jack Kleinhenz said in a release. “October sales were a good early step forward into the holiday shopping season, which is now fully underway. Falling energy prices have likely provided extra dollars for household spending on retail merchandise.”
Despite that positive trend, market watchers cautioned that retailers still need to offer competitive value propositions and customer experience in order to succeed in the holiday season. “The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under invest in their stores,” Nikki Baird, VP of strategy & product at Aptos, a solutions provider of unified retail technology based out of Alpharetta, Georgia, said in a statement. “They need to make investments in labor, customer experience tech, and digital transformation. It has been too easy to kick the can down the road until you suddenly realize there’s no road left.”
A similar message came from Chip West, a retail and consumer behavior expert at the marketing, packaging, print and supply chain solutions provider RRD. “October’s increase proved to be slightly better than projections and was likely boosted by lower fuel prices. As inflation slowed for a number of months, prices in several categories have stabilized, with some even showing declines, offering further relief to consumers,” West said. “The data also looks to be a positive sign as we kick off the holiday shopping season. Promotions and discounts will play a prominent role in holiday shopping behavior as they are key influencers in consumer’s purchasing decisions.”
Third-party logistics (3PL) providers’ share of large real estate leases across the U.S. rose significantly through the third quarter of 2024 compared to the same time last year, as more retailers and wholesalers have been outsourcing their warehouse and distribution operations to 3PLs, according to a report from real estate firm CBRE.
Specifically, 3PLs’ share of bulk industrial leasing activity—covering leases of 100,000 square feet or more—rose to 34.1% through Q3 of this year from 30.6% through Q3 last year. By raw numbers, 3PLs have accounted for 498 bulk leases so far this year, up by 9% from the 457 at this time last year.
By category, 3PLs’ share of 34.1% ranked above other occupier types such as: general retail and wholesale (26.6), food and beverage (9.0), automobiles, tires, and parts (7.9), manufacturing (6.2), building materials and construction (5.6), e-commerce only (5.6), medical (2.7), and undisclosed (2.3).
On a quarterly basis, bulk leasing by 3PLs has steadily increased this year, reversing the steadily decreasing trend of 2023. CBRE pointed to three main reasons for that resurgence:
Import Flexibility. Labor disruptions, extreme weather patterns, and geopolitical uncertainty have led many companies to diversify their import locations. Using 3PLs allows for more inventory flexibility, a key component to retailer success in times of uncertainty.
Capital Allocation/Preservation. Warehousing and distribution of goods is expensive, draining capital resources for transportation costs, rent, or labor. But outsourcing to 3PLs provides companies with more flexibility to increase or decrease their inventories without any risk of signing their own lease commitments. And using a 3PL also allows companies to switch supply chain costs from capital to operational expenses.
Focus on Core Competency. Outsourcing their logistics operations to 3PLs allows companies to focus on core business competencies that drive revenue, such as product development, sales, and customer service.
Looking into the future, these same trends will continue to drive 3PL warehouse demand, CBRE said. Economic, geopolitical and supply chain uncertainty will remain prevalent in the coming quarters but will not diminish the need to effectively manage inventory levels.
That result came from the company’s “GEP Global Supply Chain Volatility Index,” an indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses. The October index number was -0.39, which was up only slightly from its level of -0.43 in September.
Researchers found a steep rise in slack across North American supply chains due to declining factory activity in the U.S. In fact, purchasing managers at U.S. manufacturers made their strongest cutbacks to buying volumes in nearly a year and a half, indicating that factories in the world's largest economy are preparing for lower production volumes, GEP said.
Elsewhere, suppliers feeding Asia also reported spare capacity in October, albeit to a lesser degree than seen in Western markets. Europe's industrial plight remained a key feature of the data in October, as vendor capacity was significantly underutilized, reflecting a continuation of subdued demand in key manufacturing hubs across the continent.
"We're in a buyers' market. October is the fourth straight month that suppliers worldwide reported spare capacity, with notable contractions in factory demand across North America and Europe, underscoring the challenging outlook for Western manufacturers," Todd Bremer, vice president, GEP, said in a release. "President-elect Trump inherits U.S. manufacturers with plenty of spare capacity while in contrast, China's modest rebound and strong expansion in India demonstrate greater resilience in Asia."
Even as the e-commerce sector overall continues expanding toward a forecasted 41% of all retail sales by 2027, many small to medium e-commerce companies are struggling to find the investment funding they need to increase sales, according to a sector survey from online capital platform Stenn.
Global geopolitical instability and increasing inflation are causing e-commerce firms to face a liquidity crisis, which means companies may not be able to access the funds they need to grow, Stenn’s survey of 500 senior e-commerce leaders found. The research was conducted by Opinion Matters between August 29 and September 5.
Survey findings include:
61.8% of leaders who sought growth capital did so to invest in advanced technologies, such as AI and machine learning, to improve their businesses.
When asked which resources they wished they had more access to, 63.8% of respondents pointed to growth capital.
Women indicated a stronger need for business operations training (51.2%) and financial planning resources (48.8%) compared to men (30.8% and 15.4%).
40% of business owners are seeking external financial advice and mentorship at least once a week to help with business decisions.
Almost half (49.6%) of respondents are proactively forecasting their business activity 6-18 months ahead.
“As e-commerce continues to grow rapidly, driven by increasing online consumer demand and technological innovation, it’s important to remember that capital constraints and access to growth financing remain persistent hurdles for many e-commerce business leaders especially at small and medium-sized businesses,” Noel Hillman, Chief Commercial Officer at Stenn, said in a release. “In this competitive landscape, ensuring liquidity and optimizing supply chain processes are critical to sustaining growth and scaling operations.”