Posted: 12 Jan. 2023 4 min. read

Will robotic automation lead to lights-out warehousing?

Benefits of automation and robotics in warehousing

The constant changes within warehousing

Technology is an enabler. It allows us to improve processes by making them more efficient—quicker, more consistent, and less exhaustive on the human body than manual labor. But what is leading the industry to use more automation and robotics? Is it creating lights-out processes and heading toward lights-out warehousing?

There was a challenging talent gap in the warehousing market pre-pandemic, which has grown post-pandemic. Now, one in three people does not want to work in a full-time onsite role.1 This poses an issue, as operations need to plan appropriately every day to maintain the end goal: getting merchandise into the hands of their customers. The adoption of automation and robotics is shifting supply chain leaders’ thinking about how to help solve the inconsistencies of staffing, continuous workflows, strict safety compliance, and productivity. A recent LogisticsIQ report details expectations that the warehouse automation market to reach US$41 billion by 2027, with capabilities such as automated guided vehicles (AGVs)/autonomous mobile robots (AMRs), conveyor systems, automatic identification/data capture, palletization/depalletization, racking, and more.2 Today’s capabilities allow for the creation of lights-out processes—a process that is fully automated, where lighting is unnecessary because processes can operate without human labor. These successful processes are gradually leading to fully dark warehouses that can ensure maximum throughput around the clock.

Moving toward lights-out processes

According to the MHI’s 2022 annual industry report, the usage of automation and robotics is expected to grow from 28% to 79% in five years.3 This expected growth shows a push to implement automation and robotics, which can be done in a scalable manner. The ability to convert processes from manual to automated can start in receipt of goods, racking, transportation, or dispatch. With each area that is converted additional areas can make the move to automation for further optimization, to streamline movements, prevent errors, and recoup training costs.

Benefits of automation and robotics

Above and beyond cost savings, there are multiple additional savings when implementing automation. For example, with AGVs, the opportunity for human error via conventional forklifts is eliminated, reducing workplace accidents, protecting against labor shortages, and integrating with other systems. According to National Security Council data, conventional forklift accidents are a leading cause of work-related deaths and severe injuries. When these injuries occur, the average employee spends 16 days away from work, resulting in decreased productivity when already struggling with industry labor shortages. Additionally, mishandling forklifts leads to pallet damage, which causes not only material losses but also operational disruptions and equipment problems. The use of AGVs results in much lower rates of pallet damage and makes it more affordable and safer to run production around the clock. According to Muratec, AGVs consistently achieve uptime rates up to 99%. These benefits can pave the way to greater use of today’s available technology.4

Heading toward a future of darkness

The transition to a fully dark warehouse is possible and has many benefits, but for most, the first step is creating lights-out processes that can be integrated together. In Gartner’s 2019 Realization of Industry 4.0 Study, 79% of respondents stated that by 2025, their operations would be human-driven processes amplified with digital processes, with nearly 18% of respondents believing their operations would move toward a future of lights-out, totally dark warehouse automation.5 It’s clear that today’s technology allows for the possibility of creating dark warehouses. Whether beginning with one fully automated process or moving to completely dark operations, partnering with a supply chain and automation partner that has experience in this type of conversion will help lead to a successful implementation.

Endnotes

1 Bridget McCrea, “Logistics labor: Solving the talent gap,” Logistics Management, June 7, 2021.
2 LogisticsIQ, Warehouse automation market, 2022.
3 MHI, MHI annual industry report: Embracing the digital mindset, 2020.
4 Muratec, “AGV ROI: A deeper cost-benefit analysis for automated guided vehicles,” April 21, 2021.
5 Simon Jacobson, “Focus on lights-out processes, not lights-out factories,” Gartner, July 14, 2020.

Authors

Chris Riemann                      Managing Director
Deloitte Consulting LLP
criemann@deloitte.com

Wanda Johnson                    Specialist Leader                     Deloitte Consulting LLP
wjohnson@deloitte.com

 

 

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