COVID-19’s Impact on Warehouse Automation and What it Means for Supply Chain Management

Here are three ways warehouses are adopting automation technology and enabling businesses to thrive amid today’s changing conditions.

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In the past, the warehouse and supply chain management industry has been slow to adopt automation technology. The traditional model for warehouses, which has experienced minimal innovation over the years, typically functions completely devoid of automation, and involves a fairly low-tech approach with warehouse workers often running and managing operations themselves. Additionally, the focus of warehouse and supply chain management has been largely centered around cost versus response. Newer warehouse automation systems and technologies require a serious investment and are often not quick or easy to install. So, the motto in the industry has been, “if it’s not broken, don’t fix it” and the status quo has prevailed. While this sentiment may have resonated in a pre-pandemic world, the rise of the Coronavirus disease (COVID-19) has forced the industry to rethink warehouse automation anew.

Pre-pandemic, warehouses were never in a position where they needed to innovate to survive however, COVID-19 and the global economic shutdown that ensued has upped the ante significantly. The stakes are much higher now. Due to lockdowns, social distancing and a laundry list of other COVID-19-related health and safety protocols, today’s warehouses must find ways to operate seamlessly while facing a markedly reduced workforce. Physical distancing guidelines make it extremely difficult on warehouses to operate, which has a trickle-down effect on the entire supply chain. For example, manufacturers do not have the manpower to keep up with increased demand, resulting in out of stock products and shipping delays.

The short-handed staffing issues, pre-existing orders that still need to be fulfilled and a sharp increase in demand are accelerating the idea of doing more with less – from a lead time, cost and workforce perspective. This is serving as the catalyst for the warehouse and supply chain industry to adopt and implement automation technology, to shift and adapt to the “New Normal. 

Here are three ways warehouses are adopting automation technology and enabling businesses to thrive amid today’s changing conditions:

1.      Assisted guided vehicles 

Assisted guided vehicles (AGV) are essentially robots that can transport inventory around a warehouse. They are a box on wheels that uses sensor technology and a preset track to go into rows of product towers, lift the tower to pull a specific product and then deliver it to a worker. Amazon is a prime example of creating a near-fully automated warehouse, employing numerous AGV units to fulfill orders quickly and efficiently. In this example, an order is automatically routed to an Amazon warehouse, which is then sent to a specific AGV to locate the product tower and bin – speeding delivery times and increasing efficiency overall.

2.       Forklift automation

Traditionally, a warehouse worker would need to operate and drive a forklift around multilevel racks to find and pull specific products. However, through edge computing and artificial intelligence (AI), forklifts can now be automated to the point where a human no longer needs to be on the lift to operate it. While similar to an AGV in its capabilities and purpose, an automated forklift is the better option for older warehouses looking to update and automate processes, without investing in a fully automated warehouse. Edge computing and AI devices, like a smart forklift, provide the best of both worlds – automated technology, without the higher cost.

3.       Smart sorting

Smart sorting and conveyor belt systems allow sorting and shipping to be conducted autonomously, without a line of workers up and down the conveyor belt. Through AI and machine learning, high-speed cameras can capture product coming down the line and not only sort it, but match it with the most cost-effective box.

One of the biggest processes that fail in the warehouse and supply chain industry is shipping. With many cargo ships unable to leave port due to COVID-19 restrictions, air freight costs have increased – making saving on shipping critical. Couple this with the frequent waste from shipping things like a lipstick in an oversized shoebox, it’s imperative for warehouses to tighten up processes to survive and thrive. Smart sorting allows warehouses to operate with a reduced, more physically distanced workforce, while also ensuring cost-effective packaging and shipping.

The reality of COVID-19 and its impact on the warehouse and supply chain management industry, has underscored the gaps and inefficiencies in supply chain and warehouse automation strategy. Pre-pandemic, automation was viewed as a luxury; now it’s a necessity. With the booming e-commerce market, warehouses can’t afford to let productivity suffer. They need to have a game plan that involves some form of automation to create leaner and more streamlined operations. Warehouse automation reduces human capital costs and drives value, which will not only provide ROI during a crisis like the current pandemic, but in the long-term to meet regular business goals as well.