Closing the Gap on Warehouse Automation | Deloitte US has been saved
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How it may be closing faster than you think
Coming out of the COVID-19 pandemic, we find ourselves amid an unprecedented labor shortage. Many factors contribute to this; but a limited talent pool, an increase in demand for warehouse workers, and a skills gap find themselves at the top of the list. According to the latest US Bureau of Labor Statistics, warehousing employment has increased 20.5% since 2017.1 When you combine this with a 44% uptick in e-commerce orders for 2020 and the evolving distribution models needed to meet customer demands, we start to see why a workforce transformation is taking place.2
Today’s consumer expects a lot from the company they trust with their money. They want the flexibility of having what they want when they want it. Consumers want their purchases to be inexpensive with a wide selection and the flexibility to choose how their product gets in their hands. What does this mean for supply chain leaders in warehousing? The potential for automation to improve customer service is more than a pipe dream. Automation can improve key performance metrics and have an immediate impact on the customer experience, including accuracy, quality, and speed of order completion.3 This transformation is coming faster than you may think. In fact, according to a survey in MHI’s annual industry report for 2022, only 28% of leading supply chain companies have adopted automation in their processes as of today, but that number is expected to reach 79% by 2027.4
Creating a resilient workforce
While automation seems inevitable, it is imperative for organizations to think about their talent holistically alongside technological advances. Although antiquated thoughts of automation replacing human talent are still alive today, studies have shown that automation drives an increased throughput that helps expand, not contract, the workforce. As workforces fluctuate, there are several considerations organizations can take to combat this negative perception while developing a resilient workforce strategy.5
Creating a resilient workforce strategy can happen in many ways. Leading organizations are focusing on prioritizing employee experience. The growing evolution of coupling a traditional change and training approach alongside new talent operating models helps activate digital and resilient supply chain workforces for the future. A thoughtful employee experience can make a difference in attracting and retaining talent in competitive hiring markets. When talent feels like they are central to the organization’s mission and have a line of sight into their career, automation turns into an asset as opposed to an inhibitor. According to a recent study, managers and workers both recognize the need to evolve their skill sets to adjust to automation.6
Understanding an innovative employee experience, inclusive of upskilling workers, leads to higher flexibility, adoption, and retention rates. When the employee experience is a centralized focus, much of an organization’s symbiotic evolution of the collaboration of talent and automation can happen organically.
New technologies workforce impact
Emerging technologies can optimize labor efficiency and help speed up order processing. One technology gaining traction and complementing workforces is a “robotic put-wall.” A robotic put-wall is a system of shelves that is designed to improve order consolidation, picking productivity, and accuracy. With a robotic put-wall, workers can sort orders up to three times faster than with manual-only processes. For example, instead of a worker trying to figure out which cubby a product goes in and then walking to that cubby and placing the item, they would simply load the item into a robotic shuttle for scanning and delivery to the appropriate cubbies, which frees the worker from time-consuming processes. This not only makes the sorting process much more efficient, but there are upstream efficiency gains as well. Automated put-walls can process more orders at once, which means manual pickers can pick products for more orders as they traverse the warehouse aisles. The ability to pick for more open orders can yield more than 30% improvement in upstream picking productivity.7
An automated storage and retrieval system (ASRS) is another technology worthy of highlighting. This system is a combination of equipment and controls that handle, store, and retrieve materials as needed with precision, accuracy, and speed under a defined degree of automation. An ASRS can support a wide variety of processes like receiving, slotting, order picking, and pallet building. Some key benefits of an ASRS include:8
The gap between traditional and automated warehousing is quickly getting smaller. We’ve discussed how the gap is closing, how this could affect current workforces, and identified some leading new technologies. Now, how does someone take this information and start implementing it in their own warehouse? In MHI’s annual industry report, the lack of a clear use case was the No. 1 barrier to the adoption of all technologies covered in the report.9 Engaging with a supply chain partner that has the knowledge and experience in the automated warehouse space can be a great starting point.
1 Transportation Insight, “Most in-demand worker these days is the warehouse worker,” January 29, 2021.
2 Bridget McCrea, “Logistics labor: Solving the talent gap,” Logistics Management, June 7, 2021.
3 James Lawton, “What’s driving the need for robots in the warehouse?,” Forbes, January 10, 2022.
4 MHI, 2022 MHI annual industry report.
5 Knowledge@Wharton, “Robots and your job: How automation is changing the workplace,” World Economic Forum, June 24, 2021.
6 Prudential, “Pulse of the American Worker Survey fact sheet,” June 2021.
7 Peter Van Alstine, “Four reasons to rethink your ecommerce fulfillment operations using a Robotic Shuttle Put Wall,” Supply Chain 24/7, March 8, 2022.
8 MHI, “Automated storage and retrieval systems,” accessed December 13, 2022.
9 MHI, 2022 MHI annual industry report.