Although the dust is still settling, one thing is clear: industrial robotics has reached a tipping point and is poised to grow exponentially. Supply chains, particularly at the warehousing and distribution nodes, are undergoing foundational transformations to their operations, infrastructure, and workforce.
Industrial Robotics and the Future of Supply Chains
The 2021 MHI Annual Industry Report, Innovation Driven Resilience: How Technology and Innovation Help Supply Chains Thrive in Unprecedented Times, shines a spotlight on pain points supply chain leaders are experiencing and how various technologies are alleviating them.
According to the report, “For many organizations, the pandemic has been a trigger for increased technology investment,” and companies are highly motivated to improve supply chain agility and resilience.
The report evaluated 11 technologies:
Inventory and network optimization
Robotics and automation
Wearable and mobile technology
Driverless vehicles and drones
Internet of Things
Cloud computing and storage
Sensors and automatic identification
Here’s where survey respondents said they intend to invest:
57% plan to spend more than $10 million on robotics and automation
48% plan to spend more than $10 million on cloud computing
43% plan to spend more than $10 million on predictive and prescriptive analytics
26% plan to spend more than $10 million on artificial intelligence
Furthermore, when it comes to adoption, the report stated that robotics and automation will double in the next 3 to 5 years, growing from 38% to 76%.
Trends Influencing Warehousing and Distribution
Most of the reasons that companies are stepping up their investments in industrial robotics and automation aren’t necessarily new. However, the impact of these drivers definitely became more pronounced over the past two years and are likely to become permanent.
Labor is an example. Fifty-two percent of survey respondents indicated that hiring and retaining qualified workers is their biggest challenge.
At the same time, the e-commerce explosion, including direct-to-consumer (DTC) fulfillment, is new for a variety of retail sectors that either didn’t offer online shopping previously, or did so in a limited fashion.
The combination of these two trends is significantly impacting the warehousing and distribution sector. Admittedly, warehouse labor was generally tight prior to the pandemic, and picking “eaches” isn’t new. However, the scale at which these both have been altered in such a short time is extraordinary.
Intensified expectations surrounding velocity and accuracy against a backdrop of SKU proliferation and demand for greater cost efficiencies doesn’t leave much room for preserving the old way of operating a warehouse or distribution center.
Fortunately, the pace of innovation has also advanced in the past few years. Simply put, industrial robotics and automation are more ubiquitous and affordable than ever before, thereby lowering barriers to adoption for many companies and sectors.
The food and beverage space is a key example. Grocery stores, restaurants, and wineries were among those required to pivot quickly during the pandemic. As a result, their “new and improved” e-commerce sales channels are now a permanent fixture that is helping these businesses grow customer engagement and the bottom line.