The massive supply chain disruptions unleashed by the pandemic are yielding to new challenges related to sharp spikes in demand for an array of consumer goods as well as raw materials for manufacturers.
Although the dust is still settling, one thing is clear: robotics has reached a tipping point and is poised to grow exponentially as supply chains, particularly at the warehousing and distribution nodes, implement foundational transformations to their operations, infrastructure, and workforce.
The 2021 MHI Annual Industry Report, Innovation Driven Resilience: How Technology and Innovation Help Supply Chains Thrive in Unprecedented Times, shines a spotlight on where the pain points are for supply chain leaders and how they are investing in various technologies to alleviate them.
According to the report, “For many organizations, the pandemic has been a trigger for increased technology investment,” and companies are highly motivated today to improve supply chain agility and resiliency.
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 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 would jump from 38% currently, to 76% in the next 3 to 5 years.
Most of the reasons that companies are stepping up their investments in robotics and automation aren’t necessarily new. However, the impact of these drivers definitely became more pronounced over the past year-and-a-half, and furthermore, they’re likely to become permanent.
Labor is an example. Fifty-two percent of 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 having a significant impact on the warehousing and distribution sector. Admittedly, warehouse labor was generally tight prior to the pandemic, and picking “eaches” isn’t new, but the scale at which these both have been altered in such a short time is extraordinary.
Today’s intensified expectations for velocity and accuracy within the four walls, 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 DC.
Fortunately, the pace of innovation has likewise advanced in the past few years. Simply put, robotics and automation are more ubiquitous and affordable than ever before, thereby lowering many companies’ and sectors’ barriers for adoption.
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.
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