How Automation and Robotics are Changing Manufacturing and Supply Chain Logistics

If you were alive in the 1990’s, then you undoubtedly remember that you couldn’t drive down a busy street without seeing a Blockbuster, a Borders bookstore, or a Toys “R” Us.

Today, you might see the random Toys “R” Us store barely hanging on in some small, forgotten town, but the company filed for bankruptcy in 2017 and is slowly vanishing.

The disappearance of these three well-known and successful businesses begs an important question:

What happened to them?!

The answer for all three is essentially the same:

Each resisted (or ignored) the changes that technology introduced to their markets.

Specifically, these companies failed to adjust to e-commerce, online shopping, and the convenience of downloadable content. 

They were stuck in an outdated paradigm, and it cost them…well, everything.

The Future is Present

Whether you’re ready for it or not, we’re experiencing another technological wave—in fact, we have been for a while—and it’s once again, at least tangentially, related to e-commerce and online shopping.

This time, however, the focus is less on the speed and efficiency of online retail and more about matching the immediacy of that purchase with the requisite production and delivery of the product.  

Currently, in the world of manufacturing, material handling, and logistics there are companies who are actively embracing automation and there are those who eventually will be forced to in order to survive.

If history is a reasonable predictor of where we’re headed, you can expect businesses that disregard automation and robotics will soon find themselves in the same place as Blockbuster, Borders Books, and Toys “R” Us—all cautionary tales about what happens when businesses get stuck and refuse to change.   

This Isn’t New Information

Anyone paying attention to the development of machine learning, artificial intelligence, and social media algorithms has seen the proverbial writing on the wall for many years now. 

According to Derek Thompson writing for The Atlantic, “In 2013, Oxford University researchers forecast that machines might be able to perform half of all U.S. jobs in the next two decades. The projection was audacious, but in at least a few cases, it probably didn’t go far enough.”

While Thompson’s article—written in 2015—doesn’t necessarily list those “few cases” that Oxford University’s projection overlooked, it’s safe to assume that in 2022 we have a much clearer picture.

If you’re wondering where machine learning and automation are making the most headway in the American labor market, look no further than manufacturing, distribution, and supply chain logistics.

The rise of e-commerce and the aftereffects of the pandemic have put manufacturing and distribution centers under the proverbial microscope, and business owners are feeling the pressure of meeting their customers’ demands.

Consumers have developed a heightened—and perhaps even unreasonable— expectation of any company that warehouses products (or that guarantees quick distribution of materials) to meet deadlines that were once considered impractical. Now, automated material handling systems are meeting those expectations.

Today, warehouse management systems that feature machine learning and robotics are simplifying the challenges business owners face in terms of speed, efficiency, safety, accuracy, and security, especially when it comes to the packaging and distribution of products.

As a result, they’re also providing the best purchasing experience for their customers.

What we’ve learned over the past few years is there are three central reasons why automation has become a vital part of lucrative manufacturing and supply chain logistics.

Automation Solves Labor Shortages

Experts agree that America faces a shortage of workers in the aftermath of the COVID-19 pandemic, but the reasons why the workforce has been slow to return are speculative.

According to the US Chamber of Commerce, there are three million fewer Americans participating in the labor force today compared to February of 2020. Most of these jobs feature manual labor positions like food service, delivery personnel, forklift operators, etc.

With recruiting, hiring, and retaining workers becoming increasingly difficult, businesses are looking to automation to perform tasks that employees prefer to avoid.

You can see examples of this everywhere you look:

• We check out our own groceries

• We handle our own bank transactions from our phone screens

• We rely on conveyors to move packages from one end of a facility to the other

• We use scanners and algorithms to track data and predict purchasing habits

In other words, machines and software are being leveraged to handle those mundane or boring tasks that provide humans little motivation or sense of fulfillment.

Just as importantly, automation protects workers from repeated physical movements that place undue stress on the body while also helping the laborers who are present perform their tasks with greater ease, accuracy, and efficiency.

It’s easy to see how automation not only performs labor that humans prefer to avoid, but it also helps companies retain their current, desirable employees.

Automation Increases Productivity and Solves Space Issues

According to Industrial Supply magazine, as much as 70% of a warehouse attendant’s time is spent walking from one spot to another. This means that only 30% of a worker’s time is spent on the activities they’re actually compensated to do such as picking, packing, tracking, loading, and unloading. Robots can perform these tasks with greater speed and accuracy over a longer period of time without needing breaks or vacations and without calling in sick.

Everyone shares a similar notion of who the perfect worker is—someone who’s dedicated, diligent, and reliable—and with robots these qualities are guaranteed.

According to Ron Potter, Director of Robotics Technology for Factory Automation Systems, Inc. in Atlanta, Georgia, a robot is a basically skilled laborer “…operating at 75 cents an hour. If you project that over the life of the project, which might be 8, 10 or 15 years, much of the cost savings results from not needing a higher-paid, manual laborer. [Often] that’s $15 to $20 an hour versus 75 cents an hour.”

Moreover, machines can perform these repetitive tasks while also using the available space that the average human cannot.

As small businesses grow, purchasing more space or enlarging the company’s footprint is not always the best option. Those increased costs negate important gains made in revenue, and the small business model can become destabilized.

Therefore, the agility, speed, and effectiveness required of any “goods-to-customer” warehouse system must use every square foot of a facility’s available and unused space. Often, this space is overhead in the upper reaches of the building people can’t access.

Automated storage and retrieval systems (AS/RS) provide vertical integration, while incline-powered conveyors, elevators, and spiral conveyors (just to name a few options) eliminate the constraints and limitations of available floor space.

According to data collected by Daifuku Wynright, a leading provider of intelligent material handling systems, automation saves up to 85% of otherwise wasted floor space.   

Automation Improves the Customer Experience (Which Also Affects Your Bottom Line)

Advancements in technology have introduced countless benefits to society, but they’ve also created a demanding and impatient customer base. In a world where information is immediately available at our fingertips, consumers want products, merchandise, and materials to be available just as quickly.

Automation can boost the speed and efficiency of your business while also being more economical. Machines locate items much quicker than people can which improves speed of response. They’re also less prone to making errors which reduces return shipping costs and customer complaints.

In these ways, warehouse automation produces an incredible return on investment.

Ron Potter offers additional data related most business owners’ first priority: Return on investment.

“In an integrated turnkey system, often the robot is…one-third of the cost of the total installation, which includes all of the design, tooling, safety guarding, conveyors, integration services, programming and installation. That’s all included. But that goes into the initial cost of the system.”

“Once the initial cost is made, which may take two years or so for payback, that’s where you start to reap the benefits of low-cost labor from a robot. During years 3-10 the positive cash flow is almost exponential. By the time you’re at the 7th or 8th year, that $250,000 robotic investment turns out to be about $1.5 million of positive cash flow, and it keeps going up from there.”

Many integrators and automation suppliers have ROI calculators that provide their customers with a predictive scale of the ROI for a particular system. Potter’s cumulative cash flow example above was based on a system replacing two manual workers with two robots operating during two shifts, five days a week, for 50 weeks a year at an average cost of $45,000 per laborer.

So, Now What?

Seven years after Thompson explored how artificial intelligence and machine learning might change the future of work, we can confirm, today, that the future has arrived.

By adding robotics and machine learning to a distribution center, a company increases productivity as well as employee and customer satisfaction while simultaneously decreasing injuries, mistakes, and consumer dissatisfaction or grievances.

Automation isn’t on the way; it’s already here, and distribution centers and warehouse facilities that have embraced what it can do for them are thriving. Meanwhile, those companies that hesitate (or resist) these opportunities for growth will inevitably be left to ponder what might have been.   

If you’re interested in learning more about how automation and robotics can provide a solution for your business’ material handling and supply chain logistics needs, contact a member of Quintec’s sales team who can work together with our engineers and project managers to provide you with the information, knowledge, resources, equipment, and a vision for future success.