Ideas for a successful implementation
By: Robert McElmurry
As the pandemic created a “new normal” for how we live and work
that no one could have imagined, the fulfillment and logistics industries
experienced unprecedented growth. A key factor driving this market
growth is omni-channel fulfillment. Increasingly, customer demand is
driving retailers, suppliers and third-party logistics companies (3PLs) to
develop capabilities to deliver product through multiple channels. While the
state of e-commerce made steady advancements over the past decade, the
unique situation brought on by COVID caused the fulfillment sector to evolve
more rapidly. A year into the pandemic, suppliers are looking for the
best methods to get product to their customers at the right place and time
– no matter what order channel is used. This increased demand is
due to a significant growth in e-commerce, and a quickly growing shortage of
labor. As we examine various methods of fulfillment, it is clear
that robotics are now considered necessary
tools to help companies not only meet, but exceed their customers’
needs. Let’s find out why.
When system integrators first tackle an automation project for fulfillment,
it is important to understand the distribution channel, and the specific
application niche the robotic solution is designed to fill. This allows the
integrator to better understand the type of product, packaging, volume, and
upstream and downstream processes that are likely in place. These
distribution channels are designed to get product to the customer in the
right place, at the right time and through the customer’s preferred
ordering channel.
· Products in the Right Place
– traditionally people shop at a store or order from the store’s
website and receive the item at home or at their business. Companies
are allowing an order through any channel, and the customer takes possession
through a variety of methods including pickup in-store, delivery to a home
or business, or receiving items at other locations like a locker
consolidation point. Customers want choices regarding the places where
they can receive purchased items.
· Products at the Right Time
– much of the investment in fulfillment technology over the last
decade is driven by order cycle time. Order cycle time begins when a
person orders a product and ends when they take delivery or pick it
up. Before two-day shipping became the norm, this challenge required
new technologies to get products to consumers within the timeframe
offered. Customers are demanding shorter and shorter delivery windows,
which retailers are trying to meet through increased omni-channel
capabilities. So as an e-commerce business, it’s important to ask
yourself, what order cycle time are we trying to achieve? For automation system integrators, the question is
what order cycle time does my customer want to achieve? Order
cycle time is going to dictate the type of network that will allow goods to
be fulfilled on time, whether it’s two-day, one-day or even
same day.
· Products Purchased via any Order
Channel - Increasingly, customers expect to be able
to order online or buy in-store and assume that retailers have these
distribution capabilities. The mix of order cycle time and delivery or
pick-up preference means that retailers must pursue discrete strategies to
achieve this capability. Items may come from a distribution center (DC), a fulfillment
center (FC), through omni-channel fulfillment centers (OCF), a dark store
(DC), a third-party logistics supplier facility (3PL), a warehouse or directly from a
manufacturer. And, those items may be going to a residence, a store, a
business or another supply-chain partner.
As order and delivery methods grow and change, more fulfillment companies are
looking to implement intelligent automation solutions that accommodate
customer order methods, and deliver products to the right place at the right
time.
Product and Package Variability are Important
When developing solutions, product and packaging variabilities are key
factors that will dictate the amount of flexibility needed. For example, the
higher the variability in the overall number of SKU’s means more
variability of package types. In addition, more seasonal products will
increase SKU’s over time. In a robotic system, addressing
flexibility needs may come in the form of flexible gripping technology, or
machine learning and artificial intelligence technologies applied to these
systems in order to handle the diversity in SKUs and packaging.
Working with the Right System Integrator
Just like any other industry, when it comes to automation it’s
important to partner with a system integrator that has technical expertise,
automation know-how and industry experience. In fulfillment
applications, qualified integrators will work in partnership with their
customer to understand cycle time goals, the purpose of the facility, how
the automation will be used, and where products will go once they leave the
facility. In addition, some customers may need to deal with customer
returns – especially in the fashion industry where return rates are as
much as 40%. Whatever the process requirements may be, a system
integrator will be able to make recommendations and execute a solution that
could include standard industrial robots, cobots, autonomous mobile robots, drones, or a
combination of technologies.
Solving Labor Issues
Businesses in every industry are faced with the issue of trying to find and
retain labor, and since the start of the pandemic, it’s been
challenging to say the least for companies to keep up with the rapid growth
of e-commerce. With the uncertainties brought on by COVID, companies
have had to deal with more people calling in sick and staying out for
two-week periods to quarantine. In addition, once the pandemic has
subsided, companies will still need to maintain social distancing between
operators. While not the remedy to address every industrial issue,
robotics are ideal to assist workers, create at least six feet of space
between each person, and help businesses meet growing customer
demands. Given the current growth rates in e-commerce, demand for
warehouse labor is expected to increase three to four times in the coming
decade. Companies should act now to begin to address this
challenge.
E-Commerce Growth
According to a parcel shipping index published by Pitney Bowes, there were
103 billion packages shipped globally in 2019, which equates to 3,250
packages per second. With the current growth rate, that number is
likely to double by 2026. The shipment of any product is the final leg
in its journey from production to delivery. Since parcels are
handled many times before being delivered, there are a lot of opportunities
for warehouse robotics, AS/RS, conveyors, and other
new technologies, including the use of automation in stores - even if
there’s a huge variance in the projected growth for parcel delivery.
In addition to parcel shipments – e-commerce as a percent of retail has
shown consistent growth rates between 7-13% in the last decade – and
as high as 16% in 2020. E-commerce is projected to continue to grow at
a steady pace, even after the pandemic.
The untapped potential for robotics in e-commerce is significant, and FANUC,
along with our team of system integrators are ready to help unlock that
potential. We’re committed to providing automated solutions that
will help companies achieve their goals for improved productivity and higher
profits.
How are Robots Being Used in E-Commerce?
The market for robots in e-commerce is definitely in its infancy, but even
so, there’s an increasing number of robots and other technologies that
are now being used for a variety of fulfillment tasks, including:
Direct to customer e-commerce order
This is when a customer orders a product online and it goes to the
fulfillment center, or omni-channel facility, then to the parcel network for
delivery.
In this scenario, customers might use traditional robotic palletizing
applications such as end-of-line, mixed-order or homogeneous. Think
about when the goods come into a fulfillment or omni-channel center, and a
portion of the center is allocated to direct customer orders that will be
sent to customer-specified locations. It’s likely that the
fulfillment center does not want to receive a whole pallet of goods, but
would prefer a mixed order pallet with 5-10 items from of a particular SKU
– this situation is definitely an opportunity for traditional
palletizing.
E-commerce as a percent of retail has shown consistent growth
rates between 7-13% in the last decade – and as high as 16% in
2020. E-commerce is projected to continue to grow at a steady pace, even
after the pandemic.
In other instances, retailers may have issues with their existing brick
and mortar stores that requires them to direct more goods through a different
channel – this is another opportunity for traditional robotic
palletizing. Whatever channel is used, there are many options when it
comes to designing an
automated distribution center with the help of
robots.
On the inbound side, robots can be used for:
· Unloading trucks for homogenous
de-palletizing - bringing a homogenous pallet into the fulfillment
center.
· Heterogeneous de-palletizing –
separating products and placing them into bins for storage.
· Sortation induction -- grabbing a good
and putting it onto a conveyor sortation system.
· De-canting -- getting items out of a
carton.
On the outbound side, robots can be used for:
· Handling bins – grab an empty
bin and move it to a conveyor.
· Induction sortation - for items
needing to go to an order consolidation point for building and packing an
e-commerce order.
· Each picking - most challenging when a
customer orders four things and you need to build that particular order -
advanced technologies like vision are required to process each order.
· After pack out - potentially another
opportunity for outbound sortation on the truck loading side.
When the order is going directly to a customer, it will first likely go into
a parcel network. For these instances, there are several inbound
opportunities for robots like truck unloading, induction sortation, and each
picking as a general material handling application like box
loading/unloading. On the outbound side robots could handle flat
sortation, zip code sortation, and truck loading.
Understanding Technology Development
Because the market for robots is in its infancy in the various e-commerce
segments, there are many companies working on new application development.
For technology developers, there’s a huge opportunity to create
products that fit the needs of customers in the market. There are also
risks associated with doing the right things to meet customer needs.
From an integrator’s standpoint you need to be careful who you work
with, and make sure you pilot and demo the new technology before you
implement it into the real world.
Currently, e-commerce includes picking, placing and other material handling
processes, and it’s likely there will be many standardized
applications in the near future. To mitigate risks, be sure to work
closely with your customers and suppliers. With better understanding
and communications, you’ll be able to identify ways to fit a robot or
an entire automation cell into an existing system. As we move forward,
there will be more opportunities to actually design for automation up front
knowing there will likely be a robotic solution.
The Impact of Vision, AI & Machine Learning
AI and machine learning technologies are enabling new applications. In
fact, most of the applications in ecommerce/fulfillment require some type of
machine vision. However, with the huge proliferation of SKUs, the old
way of programming for a particular part or object discretely is much more
difficult to figure out what item to pick next. AI and machine
learning will provide more opportunities for companies to expand their
capabilities and help ease the burden of dealing with high levels of product
variability.
Integrators with machine vision and/or AI experience are having the most
success meeting their customers’ needs. It’s important to
note that there are some limitations with AI - one is deep learning vs.
machine learning using older machinery algorithms. Deep learning is
relatively new within the last decade, and the idea is that the more data
you have, the better the machine vision will perform. As a system
runs, deep learning tries to figure out how to pick items on its own.
As datasets improve, companies are achieving 99% pick rates in terms of
object recognition, but there’s still a lot of room for
improvement. There can be advantages to a traditional machine vision
application in the sense that if something goes wrong you can fix it.
In fact, some companies have developed their own technologies that work
well. Whatever direction you take, it’s really a matter of using
the technologies that deliver the best result.
From a vision standpoint, FANUC offers a wide range of integrated 2D and 3D
vision products that are quick to install, easy to use and flexible - expert
programming knowledge is not a requirement. For e-commerce
applications such as de-palletizing and bin picking, FANUC’s iRVision 3D Area Sensor
can provide very quick and reliable part detection. Also, while
FANUC’s iRVision is
directly integrated into our robots, we can easily work with other machine
vision products.
Automated Fulfillment for Grocery and Retail
For grocery stores and other retailers looking to establish a fulfillment
solution, some of FANUC’s integrators have their own micro fulfillment
solution, and we see opportunities for robots to assist in those
facilities. Experienced integrators will work with these retail
and grocery companies to help them better understand their options for an automated fulfillment system. It’s
important to note that many workers in service industries are not as
familiar with robotics as workers in manufacturing, so during the design
phase, integrators should include an easy user interface and uncomplicated
software.
The Importance of Training
Training is another requirement for success. Even with advanced systems
offering 99% correct picks, there’s still a gap that will require
human intervention to minimize downtime. Making sure that employees
are certified to work with the automation is critical for their safety and
the success of the system. It also elevates their career because some
workers who previously handled the products are now trained to manage the
automation.
Companies may consider training offered by FANUC or their system integrator,
or working with a local technical school to create an apprenticeship program for their
employees. FANUC’s apprenticeship programs aim to help companies
rapidly upskill employees at every level from Operator to Technician to
Integration System Specialist. In addition to improving the skills of
current production workers, these programs will be extremely valuable for
engineers who are working to implement new automation systems and processes
that require new employees trained in the latest automation technologies.
Today’s environment is leading to rapid changes in the adoption of
automation for fulfillment and logistics. This environment holds the promise
of great opportunity for end-customers and integrators to meet the demands
of the market.
FANUC and our team of system integrators have the people, products and
experience to help you maximize the productivity of your
warehousing/fulfillment/logistics process. If you’re considering
automation, let’s start the conversation and find out how we may be
able to help you find a better solution to achieve your goals, increase
profits and maintain a competitive edge.
Robert McElmurry is Executive Director Global Accounts for FANUC
America Corporation responsible for developing global relationships with
fulfillment customers in the E-commerce, warehouse and logistics
segments.
Link to Application Videos:
-State-of-the-art Fulfillment, Powered by AI
-Robotic Parcel Sorting Helps Reduce
Ergonomic Issues