Comment: Robotics in the warehouse and keeping cynicism at bay

When it comes to warehouse robotics, I used to be one of the biggest cynics. Having endured many years of visiting companies where inappropriate automation had been installed against an unrealistic business plan, it seemed a highly expensive and often impractical waste of resources.

But using robotics in warehouses is an increasingly hot topic in the world of retail, and with good reason. Recently, we've seen a wave of new robotic technologies being rolled out across the UK, as firms catch on to the huge potential of the market.

The rapid growth of eCommerce is showing no sign of slowing down, placing new burdens on fulfilment networks. This means sophisticated warehouse technology is in increasingly high demand. For retailers and warehouse operators, the case for automation is growing stronger and certainly warrants our attention.

It came as a welcome surprise therefore to be involved in a recent project where robotics has worked in a decisive and transformative way. Perhaps unsurprisingly this particular business is based in Germany where investment in automation and robotics has been championed over the years.

The business is not the largest by any means but is growing very rapidly due to its ability to succeed in a highly competitive marketplace. It has managed to do so by using tech innovation in the supply chain as a business weapon. Crucially, it has installed 'appropriate' robotics rather than the fastest or the flashiest.

Though the fastest robot would have ticked all the boxes in an accountant's return on investment calculation, it is important to see the bigger picture of how this new technology will fit within your existing systems. In this case, the business chose two smaller, more flexible robots, alongside high speed cameras to verify their accuracy – what was picked up from the warehouse shelf. This combination of technology allowed to the business to innovate its warehouse system without compromising on accuracy.

This business is now the most competitively priced in their market by far. It is able to beat any price offered by a competitor, simply by understanding the cost to serve their market and the fact that their competitors are still using manual warehouse operations.  Of course, this takes capital investment. But in this particular case the payback has been swift, only taking around two years, justifying the outlay.

The secret to their success was their clear view of the 'end game' for implementing the technology in the particular site within the market. They were then able to replicate the footprint in adjacent markets. The flexibility of the design also allowed them to cope with product variations and different shapes and sizes of packaging. In this case, robotic technology succeeded as a complete warehouse solution, greater than the sum of its parts.

When it comes to robotics, both retailers and their advisers would be wise to try keep their cynicism at bay. In the retail industry, those who are willing to embrace innovation in a strategic yet flexible way are reaping the results. Unsurprisingly, investors are already queuing up to get a piece of the action.

Read Tim's first opinion piece in the series looking at future tech trends in the retail supply chain. Driverless lorries - revolution or risky business?

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Alvarez & Marsal