The growth of e-commerce, which accelerated further with the Covid-19 pandemic, has drastically changed the logistics landscape in Asia. Particularly in India, the e-commerce market is expected to grow to $200 billion by 2026, up from just $38.5 billion in 2017. With consumers today increasingly shopping through online channels and expecting fast deliveries, brands, their supply chains, and logistics players are now seeking solutions that will help them fulfil orders more efficiently, writes James Christopher of TMX.
As a result, brands and their partners are now contemplating various warehouse automation and digital solutions – some of which may have never been considered before – to better serve their customers. As part of this, businesses will also need to take into consideration the significant skill changes that would need to be employed and closely managed in parallel, in addition to the type of physical solution implemented.
Accessible automation
Autonomous mobile robotics (AMRs) and other similar mobile robotic solutions are increasingly becoming commonplace and a go-to automation solution for warehouses and distribution centres in Asia. Key reasons for this are that AMRs can easily fit within existing warehouse space, are easily deployed, and are cost-effective.
Before, automation in warehouses was only possible if the building was purpose-built for the integration of the technology. The four walls of a building would essentially be built around automation solutions. However, the flexibility of AMRs and mobile robotics means that they can be easily and quickly adopted inside four walls that already exist. Companies do not need the height, floor loadings or upgrades to existing services that you would conventionally need. Existing sites can be readily utilised and do not need to be bespoke to the automation solution.
This has democratised automation. Traditional warehouse automation solutions were typically only adopted by larger businesses due to the high-cost investment and long payback involved.
On the other hand, mobile robotics is now allowing smaller players to consider integrating automation into their warehouses to better meet growing consumer demands, particularly the fast delivery expected out of e-commerce. Furthermore, with increased competition from other countries, the level of capital needed to automate warehouses using mobile solutions are now comparatively lower, and businesses can also enjoy a shorter return on investment.
This type of mobile automation can also be deployed within months, rather than years, and scaled as a business grows. For newer ecommerce players, whose volumes are growing rapidly, or growth levels are not yet quantified, the mobile robotics solution gives the businesses flexibility. Additional robots can be ordered quickly to cater to fluctuations in growth, and the portability of the solution means that it can also be easily relocated to a new site should a business outgrow its current site.
Automation versus manpower
Even with the accessibility and low cost provided by mobile automation solutions today, there remain to be barriers in India in taking those first steps towards automating warehouses. This is mainly due to the relatively low labour costs given the large base of manpower available.
Although automation is known to increase output and reduce time taken to process an order, there is a counter debate that adding more labour can achieve the same at a lower cost than investing in a machine. We also tend to get questions from the businesses we work with on whether automated solutions, like mobile robotics, will take significant labour out of their operations and whether the existing labour can be retrained.
However, as people become more educated across the country, there could be an increasing lack of labour in the warehouse and distribution space due to a waning interest to undertake roles such as picking customer orders or maintaining stock in a warehouse, especially in the more developed cities like Kerala. Furthermore, with the rapid advent of ecommerce and more consumers going online per the “Digital India” drive, demand continues to be at an all-time high. Even hiring an additional 100 people might not be a solution to fulfil customer orders in a timely manner.
Considerations for the change
While having automation solutions in warehouses is needed as part of modernising supply chains, there are important questions that businesses should consider before implementation.
One key element to consider is around the pain points of existing processes and how a future optimal process flow should look. Having a good understanding of these and mapping them correctly can help ensure that the right type of automation is implemented. The last thing that a business would want while implementing a new automation solution is to replicate existing poor processes.
Beyond this, it is also crucial to ensure that employees are willing to embrace change. Implementing solutions that are as transformative as mobile robotics can result in significant changes to workflow, day-to-day operations and the type of skills needed from the workforce. An effective change management plan that seeks to position new automation solutions as further augmenting current employees’ work should therefore be established and prioritised when undertaking the automation and digitisation journey.
Indeed, supply chains around the region are changing rapidly and there are now cost-effective automation solutions that can be implemented within existing sites and complement the present workforce. Where once automation would have been rejected out of hand, there are now smart, low-cost, and highly flexible solutions that can be employed to allow businesses to continue growing and thriving. However, with this, it is key that businesses have a good strategy in place so as to ensure that the right type of automation solution is implemented at the right cost.
| James Christopher is the president – Asia at business transformation consultancy firm TMX |
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Indian Transport & Logistics News.