We're likely to see more robots in DCs within the decade. But Tom Bonkenburg says the first wave will probably look a lot more like driverless forklifts than R2-D2 or C-3PO.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
The Boston Consulting Group recently predicted that global sales for robots would reach $67 billion by 2025, with the industrial segment being the largest component of that market.
That prediction comes as no surprise to St. Onge Co. consultant Tom Bonkenburg, the leading expert on the use of robotic systems in distribution. A mechanical engineering graduate from the Rensselaer Polytechnic Institute, Bonkenburg has been fascinated by robots since he was a kid.
That fascination led him to a career in material handling. For the past 15 years, Bonkenburg's consulting efforts have focused on supply chain and warehouse design with a strong interest in custom automation and robotics within the distribution environment. He is currently a partner in the St. Onge Co. and heads up that firm's European office.
Bonkenburg recently discussed trends in robotics with DC Velocity Editor at Large James Cooke.
Q: What's the current state of "robotics" in warehousing?
A: The current state of robotics depends on your definition of the word "robot." For many years, we have seen robotic technology in the distribution environment such as AS/RS (automated storage/retrieval systems), AGVs (automated guided vehicles), shuttle systems, transfer cars, palletizers, Kiva, Symbotic, etc. These types of systems are mature, well understood, and installed in DCs around the world. However, if your definition of "robot" includes such terms as multipurpose, adaptable for different types of jobs, redeployable, or even "humanoid," then robotics is not very common in a typical warehouse environment.
Q: Any idea of the percentage of DCs that are using robotics in their operations? A: This is a very difficult question to answer. Our research shows that 15 percent of warehouses are mechanized, and only 5 percent have true automation. Robotic systems would typically fall somewhere within these operations. The key point to note is that 80 percent of DCs are currently manual, creating a large potential opportunity for the future deployment of robotic systems if they could be made capable and affordable.
Q: What types of robotic systems are being used in warehousing, and for what purpose? A: We often see robotic systems such as pallet AS/RS and end-of-line palletizers used in high-volume finished-goods warehouses that are attached to factories. These systems tend to operate for three shifts and handle a limited range of similar SKUs (stock-keeping units) but high volumes. The "goods to picker" technologies such as shuttles are being deployed in some direct-to-consumer piece picking operations with many small orders and large SKU bases.
Q: How about humanoid robotics? How soon do you think we'll see humanlike robots in warehousing? A: Many of the traditional robotic-arm manufacturers are developing two-arm "humanlike" robots for use in assembly operations. These robots are still bolted down within an automated work cell like typical manufacturing robots. So far, few have been installed, but the interest in these new robots is very high. I believe this technology will first take hold in the manufacturing environment and then possibly move to the distribution side of the supply chain. This transition will likely take several years and will require a few more software, sensor, and cost-point breakthroughs. The good news is that several companies are investing serious money into advancing this technology.
Q: Do you know of any companies that are experimenting with humanoid robots in DCs? A: One of the most impressive humanoid robots, Robonaut, was developed by NASA in cooperation with General Motors. They have experimented in the manufacturing environment but as far as I know not in the distribution environment.
Q: There's a company called Rethink Robotics that makes a humanoid robot called "Baxter." Where does development of that technology stand and is it being used in warehouses? A: I am a big fan of Rethink Robotics and their underlying concepts. They have developed a low-cost, easy-to-use software-focused robot that works alongside human workers without fences or safety gates. Unfortunately, their first system, Baxter, is quite slow and has limited capability when it comes to warehousing and many manufacturing operations. There are rumors in the market that their second-generation robot will come out next year, and I am looking forward to seeing if future generations, such as versions three or four, would be more suited to distribution operations.
Q: Are any companies developing humanoid robots for use in warehousing? A: Rethink Robotics has focused its development energy on manufacturing pick-and-place-type applications rather than on the more complex warehouse environment. This market strategy is similar to the path taken by other companies that are currently working on dual-arm robotics. The warehousing industry needs a robotic manufacturer to take the Rethink approach but focus on the distribution side of the supply chain.
Q: What's the biggest obstacle to putting robots in warehouses—cost or technology? A: The truth is that both cost and technology are currently barriers to bringing robots into the warehouse. A few fundamental breakthroughs are necessary to both improve capability and reduce cost. The good news is that mini robotic breakthroughs are happening every year, and their frequency is increasing rapidly. The future path to commonplace robotics will depend on low-cost sensors and inexpensive but massive computing power. Anyone who used to have a rotary phone and now has an iPhone knows that those two key ingredients improve rapidly! I believe that all supply chain professionals should watch the robotics space because we will all be amazed how fast it will change.
Q: What's the biggest opportunity for using robots in warehousing? A: When looking forward to the next likely breakthroughs in robotic technology, I feel that robotic industrial trucks, similar to but more advanced than those made by Seegrid, will be the true entry point for more widespread use of robotics in the warehouse. A truly functional fully robotic forklift could find immediate application in almost any warehouse. If you look at the recent breakthroughs in self-driving cars by companies such as Google, GM, BMW, Audi, etc., it is not hard to picture this happening in the coming years.
Q: You said that robotic industrial trucks would likely be the entry point for robots. Why is that? Why are we likely to see driverless forklifts in a warehouse before humanoid robots? A: While building a fully driverless forklift will be a great challenge, developing a humanoid robot to work in a warehouse will be even more difficult. Modern forklifts offer a robust, inexpensive, and well-designed physical platform to eventually automate with computers, sensors, and vision systems. There are several large forklift manufacturers with strong sales and support networks that could possibly deploy and maintain a robot forklift fleet.
In the case of a humanoid robot, there is still no strong physical hardware platform to start with and few large companies produce them. Most humanoid robots are currently prototypes or focused on light-duty manufacturing. More robust humanoid robotic systems with large support networks need to be developed before we can even think of applying them to warehouse applications. The modern forklift has a head start over humanoid robots since it is already a hardened piece of warehouse equipment with the relatively easy task of moving standard pallets rather than the more difficult humanoid tasks that require the handling of a wide range of dissimilar items.
Q: Do you expect humanoid robots to replace warehouse workers or to work alongside human workers in warehousing? A: My personal belief is that robots will work alongside human workers. People are very, very good, and we keep making them better. Anyone who has spent more than a day in a distribution center will see that it is a very dynamic environment that requires adaptability, flexibility, quick thinking, creative problem solving, and good decision making. Similar to a WMS [warehouse management system] or a conveyor system, robots will be a tool that the smart warehouse team will use to improve its operation. At the end of the day, a supply chain is only as good as the people who work within it, and therefore, the need for talented and motivated people will never disappear.
Agility Robotics, the small Oregon company that makes walking robots for warehouse applications, has taken on new funding from the powerhouse German automotive and industrial parts supplier Schaeffler AG, the firm said today.
Terms of the deal were not disclosed, but Schaeffler has made “a minority investment” in Agility and signed an agreement to purchase its humanoid robots for use across the global Schaeffler plant network.
That newly combined entity will generate annual revenue of around $26 billion, employ a workforce of some 120,000, and serve its customers from more than 44 research & development (R&D centers and more than 100 production sites around the world. The new setup will include four business divisions: E-Mobility, Powertrain & Chassis, Vehicle Lifetime Solutions and Bearings & Industrial Solutions.
“In disruptive times, implementing innovative manufacturing solutions is crucial to be successful. Here, humanoids play an important role,” Andreas Schick, Chief Operating Officer of Schaeffler AG, said in a release. “We, at Schaeffler, will integrate this technology into our operations and see the potential to deploy a significant number of humanoids in our global network of 100 plants by 2030. We look forward to the collaboration with Agility Robotics which will accelerate our activities in this field.”
Agility makes the “Digit” product, which it calls a bipedal Mobile Manipulation Robot (MMR). Earlier this year, Agility also began deploying its humanoid robots through a multi-year agreement with contract logistics provider GXO.
The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.
According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.
That is particularly valuable in today’s rapidly changing markets, where companies face evolving customer preferences and economic shifts, the company said. “Our customers spend significant time analyzing internal data but often lack visibility into how external factors might impact their planning,” Jeff Casale, CEO of Board, said in a release. “By integrating Prevedere, we eliminate those blind spots, equipping executives with a complete view of their operating environment. This empowers them to respond dynamically to market changes and make informed decisions that drive competitive advantage.”
Material handling automation provider Vecna Robotics today named Karl Iagnemma as its new CEO and announced $14.5 million in additional funding from existing investors, the Waltham, Massachusetts firm said.
The fresh funding is earmarked to accelerate technology and product enhancements to address the automation needs of operators in automotive, general manufacturing, and high-volume warehousing.
Iagnemma comes to the company after roles as an MIT researcher and inventor, and with leadership titles including co-founder and CEO of autonomous vehicle technology company nuTonomy. The tier 1 supplier Aptiv acquired Aptiv in 2017 for $450 million, and named Iagnemma as founding CEO of Motional, its $4 billion robotaxi joint venture with automaker Hyundai Motor Group.
“Automation in logistics today is similar to the current state of robotaxis, in that there is a massive market opportunity but little market penetration,” Iagnemma said in a release. “I join Vecna Robotics at an inflection point in the material handling market, where operators are poised to adopt automation at scale. Vecna is uniquely positioned to shape the market with state-of-the-art technology and products that are easy to purchase, deploy, and operate reliably across many different workflows.”
In a push to automate manufacturing processes, businesses around the world have turned to robots—the latest figures from the Germany-based International Federation of Robotics (IFR) indicate that there are now 4,281,585 robot units operating in factories worldwide, a 10% jump over the previous year. And the pace of robotic adoption isn’t slowing: Annual installations in 2023 exceeded half a million units for the third consecutive year, the IFR said in its “World Robotics 2024 Report.”
As for where those robotic adoptions took place, the IFR says 70% of all newly deployed robots in 2023 were installed in Asia (with China alone accounting for over half of all global installations), 17% in Europe, and 10% in the Americas. Here’s a look at the numbers for several countries profiled in the report (along with the percentage change from 2022).
Sean Webb’s background is in finance, not package engineering, but he sees that as a plus—particularly when it comes to explaining the financial benefits of automated packaging to clients. Webb is currently vice president of national accounts at Sparck Technologies, a company that manufactures automated solutions that produce right-sized packaging, where he is responsible for the sales and operational teams. Prior to joining Sparck, he worked in the financial sector for PEAK6, E*Trade, and ATD, including experience as an equity trader.
Webb holds a bachelor’s degree from Michigan State and an MBA in finance from Western Michigan University.
Q: How would you describe the current state of the packaging industry?
A: The packaging and e-commerce industries are rapidly evolving, driven by shifting consumer preferences, technological advancements, and a heightened focus on sustainability. The packaging sector is increasingly prioritizing eco-friendly materials to reduce waste, while integrating smart technologies and customizable solutions to enhance brand engagement.
The e-commerce industry continues to expand, fueled by the convenience of online shopping and accelerated by the pandemic. Advances in artificial intelligence and augmented reality are enhancing the online shopping experience, while consumer expectations for fast delivery and seamless transactions are reshaping logistics and operations.
In addition, with the growth in environmental and sustainability regulatory initiatives—like Extended Producer Responsibility (EPR) laws and a New Jersey bill that would require retailers to use right-sized shipping boxes—right-sized packaging is playing a crucial role in reducing packaging waste and box volume.
Q: You came from the financial and equity markets. How has that been an advantage in your work as an executive at Sparck?
A: My background has allowed me to effectively communicate the incredible ROI [return on investment] and value that right-size automated packaging provides in a way that financial teams understand. Investment in this technology provides significant labor, transportation, and material savings that typically deliver a positive ROI in six to 18 months.
Q: What are the advantages to using automated right-sized packaging equipment?
A: By automating the packaging process to create right-sized boxes, facilities can boost productivity by streamlining operations and reducing manual handling. This leads to greater operational efficiency as automated systems handle tasks with precision and speed, minimizing downtime.
The use of right-sized packaging also results in substantial labor savings, as less labor is required for packaging tasks. In addition, these systems support scalability, allowing facilities to easily adapt to increased order volumes and evolving needs without compromising performance.
Q: How can automation help ease the labor problems associated with time-consuming pack-out operations?
A: Not only has the cost of labor increased dramatically, but finding a consistent labor force to keep up with the constant fluctuations around peak seasons is very challenging. Typically, one manual laborer can pack at a rate of 20 to 35 packages per hour. Our CVP automated packaging solution can pack up to 1,100 orders per hour utilizing a fully integrated system. This system not only creates a right-sized box, but also accurately weighs it, captures its dimensions, and adds the necessary carrier information.
Q: Beyond material savings, are there other advantages for transportation and warehouse functions in using right-sized packaging?
A: Yes. By creating smaller boxes, right-sizing enables more parcels to fit on a truck, leading to significant shipping and transportation savings. This also results in reduced CO2 emissions, as fewer truckloads are required. In addition, parcels with right-sized packaging are less prone to damage, and automation helps minimize errors.
In a warehouse setting, smaller packages are easier to convey and sort. Using a fully integrated system that combines multiple functions into a smaller footprint can also lead to operational space savings.
Q: Can you share any details on the typical ROI and the savings associated with packaging automation?
A: Three-dimensional right-sized packaging automation boosts productivity significantly, leading to increased overall revenue. Labor savings average 88%, and transportation savings accrue with each right-sized box. In addition, material savings from less wasteful use of corrugated packaging enhance the return on investment for companies. Together, these typically deliver returns in under 18 months, with some projects achieving ROI in as little as six months. These savings can total millions of dollars for businesses.
Q: How can facility managers convince corporate executives that automated packaging technology is a good investment for their operation?
A: We like to take a data-driven approach and utilize the actual data from the customer to understand the right fit. Using those results, we utilize our ROI tool to accurately project the savings, ROI, IRR (internal rate of return), and NPV (net present value) that facility managers can then use to [elicit] the support needed to make a good investment for their operation.
Q: Could you talk a little about the enhancements you’ve recently made to your automated solutions?
A: Sparck has introduced a number of enhancements to its packaging solutions, including fluting corrugate that supports packages of various weights and sizes, allowing the production of ultra-slim boxes with a minimum height of 28mm (1.1 inches). This innovation revolutionizes e-commerce packaging by enabling smaller parcels to fit through most European mailboxes, optimizing space in transit and increasing throughput rates for automated orders.
In addition, Sparck’s new real-time data monitoring tools provide detailed machine performance insights through various software solutions, allowing businesses to manage and optimize their packaging operations. These developments offer significant delivery performance improvements and cost savings globally.