 Founder and CEO ForwardX Robotics |  Jonathan Cortellacci Head of Innovations, Americas Geek+ |  Senior Global Product Manager, Robotics FORTNA |  Founder and CEO Numina Group |
 Vice President and General Manager, Robotics Automation Zebra Technologies |  Senior Systems Application Engineer for Robotics SICK |  Vice President of Marketing Exotec |  Chief Revenue Officer Plus One Robotics |
 Vice President of Marketing Knapp |
Q: How does a company without much automation begin the robotics journey?
Kevin Reader – Knapp: The term “robot” means different things to different people. But essentially, a robot is an autonomous machine that can sense its environment, carry out computations to make decisions, and perform actions automatically and rapidly. This really covers a huge number of technologies and a large budget and performance range.
There are many ways to get started in robotics, so it’s important to define overall scope: Are we talking about transportation, assembly, order picking, flying robots to perform inventory management, or other applications? Create a map for your robot journey; it’s a complicated journey with many alternatives. Doing some basic research is an important first step!
Dan Hanrahan – Numina: An automation journey for a small to mid-sized business should follow the same path as a large company’s journey. It starts with a discovery and design phase to first analyze the existing processes, identify what is causing the bottlenecks in the operation, and lean up and define improvements to an organization. After identifying process improvements, it’s time to compare the savings in labor and productivity gains obtained by adding mobile warehouse robots or AMRs [autonomous mobile robots] as a component of the operation’s automation solution.
Nick Longworth – SICK: Identify and assign a robotics champion within the organization who will understand robotics and how robots best operate within the operational processes. Understand the operational processes of the organization inside and out. This is key because robots are much more rigid in their operations than humans are. This is different from many of the processes that are used today and must be accounted for in a successful installation. Know what you don’t know, and fill the gaps with partners.
Robert Nilsson – Plus One: Whether a company is new to automation or refining an existing setup, the areas where goods are received or shipped should be prioritized. The processes handled near the dock are often very simple to automate and can deliver a quick ROI [return on investment] compared to center-of-the-facility processes, such as storage and retrieval, which can require more time-consuming, expensive, and logistically complex changes to the operation. Automation technologies should be flexible enough to meet the changing demands of a business throughout the year, while also clearly improving efficiency and throughput.
Nicolas Chee – ForwardX: A company without much or any automation can start with collaborative robots that don’t drastically change existing processes, so operators and staff can adapt with ease. Robotics is becoming even more accessible for companies with new purchase models, such as our RaaS [Robots as a Service] model that essentially allows them to rent robots on a monthly basis. Quick deployment allows new companies to begin their robotics journeys without any downtime in their operations. It also lets them scale up or down for peak and trough seasons.
Jim Lawton – Zebra: My advice for anyone looking to get started with robotics automation is to start small. I’ve seen companies buy into the concept of robots and automation and then try to go too big, too quickly. Pick a task where you know automation can add value, get that up and running, and expand from there.
Next, make sure the process you choose is working well before you automate. All too often, companies fall into the trap of taking existing processes and attempting to automate them. In some cases, they try to automate a broken process—a sure-fire recipe for failure.
Finally, when people think about robotic automation, they tend to think only about the hardware. The reality is that the value is created in the software.
Q: How does automation help companies deal with the many supply chain shortages we’ve experienced this past year?
Stephen Dryer – FORTNA: The supply chain disruptions we’ve experienced over the past couple of years and continue to experience today are a direct result of a decades-long trend toward just-in-time logistics. This made a lot of sense as trade became easier and when shipping costs were relatively low. Consumer expectations of delivery time also significantly contracted over the same period—and meeting these expectations has become a requirement to remain competitive. Introducing automation gives companies an edge in terms of visibility into the performance their networks can handle and, therefore, the timelines they can meet. This enables them to use their capacity more efficiently.
Erin McDuff – Exotec: Some of these disruptions could historically have been met by retailers scaling up their operations by hiring seasonal workers to accommodate busy peak seasons. That said, the solution of “just add more workers” has not been feasible for a lot of companies given labor shortages.
Kevin Reader – Knapp: It’s not just about supply chain shortages but also speed—and as we have learned based on the recent past, that includes the topic of “resilience.” According to McKinsey, a wide swath of industries can expect supply chain disruptions lasting a month or longer to occur every 3.7 years. Intricate production networks were designed for efficiency, cost, and proximity to markets, not necessarily for transparency and resiliency. Automation and AI [artificial intelligence] are now able to identify “black swan events” and repurpose flow almost instantly—assuming you have designed a flexible approach to automation.
Jonathan Cortellacci – Geek+: Obviously, automation can provide more throughput with less labor, but that also means it can enable existing labor to better address peaks in demand. Many automated systems offer ways to dramatically improve cube utilization as well. Being able to increase throughput and storage capacity with constant labor and square footage can help tremendously at a time when they are both expensive. Automation can also provide extremely valuable data and insight that may otherwise be unavailable or difficult to collect and monitor.
Robert Nilsson – Plus One: The relentless efficiency of automation is well recognized for successfully increasing throughput in fulfillment and distribution centers. Where humans tire, become distracted, and lose productivity throughout a time-limited shift, machines can constantly perform precise tasks with only the occasional break for maintenance. Combined with the ability to deploy additional robots as necessary, these qualities enable a facility to successfully meet perpetually high demand amid labor shortages.
Jim Lawton – Zebra: In the warehouse especially, efficiency and accuracy are key to operational success. Tracking the inbound movement of inventory from the moment it hits the loading dock to when that inventory is picked, packed, and shipped is an essential part of mitigating supply chain woes. With innovations in devices such as wearables, heads-up displays, mobile computers, and autonomous mobile robots, operations teams can see inventory levels in real time and plan supply to be much more aligned with demand. That intelligence, enabled by automation, goes a long way toward mitigating shortages.
Q: What is being done to improve integration of robotics with other automation and warehouse systems?
Jonathan Cortellacci – Geek+: From an innovations perspective, more of the challenge is about standard interfaces and not addressing something new you want to solve for (or to the extent you’d like). There are many integrators and third parties out there that are developing end-to-end solutions that deploy modularly and are agnostic to technology providers. At the same time, there are providers that want to deploy their own products from dock to dock and even open source routes as well. So, if a company is looking to automate, it’s best to consider your long-term integration strategy as part of the picture.
Nicolas Chee – ForwardX: For robotics to continue growing, they must be able to integrate with other automation and warehouse systems. Every new project gives us and our software engineers more experience with slightly different products, workflows, etc. We’re already deploying projects where our AMRs work alongside robotic arms, AS/RS systems, conveyor belts, and put walls or pick-to-light systems. I expect these types of collaborations to continue for us and for the industry at large.
Stephen Dryer – FORTNA: It is rare for robots to perform as islands of automation without visibility into upstream and downstream processes. While possible, this leaves a lot of potential value on the table.
Integration with supervisory systems (WCS/WES/WMS) provides an additional layer of efficiency—namely that the robot or fleet of robots can be more tightly orchestrated to fit into the overall process. This means that robots can be more heavily utilized, work performed by robots can be prioritized and dynamically re-prioritized as business needs change, and data from operations can be used to improve outcomes.
Jim Lawton – Zebra: Two things are happening. First, modern drag-and-drop ability makes it possible to create workflows that are accessible in the cloud via modern data services and APIs [application programming interfaces], streamlining integration.
Second, as robots and software become more sophisticated, they relieve WMS systems of the traditional burden of optimizing and orchestrating automation.
Kevin Reader – Knapp: Gartner claims that robotic process automation will cost one third the amount of an offshore employee and one half the cost of an onshore employee, and that integration is a key element to risk reduction in the area of robotics. Most experts agree that RPA (Robotic Process Automation) software is one of the keys to success, as measurement and tracking results are important and should be undertaken in concert with low-complexity projects at the beginning of your journey.
Erin McDuff – Exotec: We use a modular design that consists of robots that are constantly assigned new tasks, bins that are identified and registered in a controller database that offers surgical precision, and racks that adapt to the architecture of the customer’s warehouse. This kind of flexibility and adaptability is critical when working with customers.
Q: Do customers look for a particular return on investment (ROI) on their automation investments? How do they sell the ROI to decision-makers?
Nicolas Chee – ForwardX: Most companies are renting the warehouses they operate in, and leases tend to be around five years, so ROI needs to be less than three years for most to even consider investing in automation. We’ve deployed in about 100 warehouses now where we’ve been able to exceed that expectation. To make the decision easier, we’ve added a robots-as-a-service model that essentially delivers an ROI every month. When comparing the cost of renting a robot to the savings on overall operational costs, it just makes sense to go with automation.
Jim Lawton – Zebra: When calculating ROI for robotics automation, companies historically placed a disproportionate focus on headcount efficiency, i.e., how many people can a robot replace? Today, and especially as collaborative robots such as AMRs have made robotic automation accessible to companies of all sizes, there are many other aspects being considered in calculating an ROI: What problem are they looking to solve? How frequently do processes run? Are there different needs throughout the duration of a day or year? What is the outcome that will make them successful? Ultimately, improvements in productivity, efficiency, throughput, and accuracy are the measures by which any automation investment will be evaluated.
Robert Nilsson – Plus One: ROI is key to finding value in an automation investment. Prior to implementing automation, most companies know exactly where waste and easily repeatable processes are in the warehouse. This is typically determined when creating their automation plan.
Automation ROI can be found in benefits like improving overall throughput, reducing human labor costs, preventing product loss or mishandling, and optimizing your storage to house more stock. By boosting your gross income from both directions, automation creates a measurable financial result that quickly covers the cost of setup.
Stephen Dryer – FORTNA: How customers measure ROI varies broadly. Usually, the core component of ROI is based on labor savings; however, these models can also include labor cost avoidance, the value of higher productivity, lower costs from injury, etc. It is more often the case these days that labor availability and the cost of not being able to do business are factored into discussions on ROI.
Dan Hanrahan – Numina: ROI is a major financial component in the cost justification for the blend of technologies chosen for a client’s warehouse automation initiative. The design criteria need to include their five-year growth rate metrics and contrast the cost to fulfill their current year’s orders versus the cost reductions obtained with the chosen blend of automation. The ROI not only takes into account the labor reductions but also the measurable savings obtained by increased order fulfillment accuracy, lower shipping costs, and customer service improvements. We still see a demand from the CEO and CFO for a thorough investment analysis that demonstrates the solution provides a monthly positive cash flow over the current operation.
Nick Longworth – SICK: The expected ROI to approve an investment generally is between one and three years. It is more of a guideline than a requirement. For instance, if a project has a longer ROI but is seen as strategic, it may be approved anyway. Selling that ROI to decision-makers requires an understanding of the operational processes of the organization and demonstrating how the automation will positively benefit those processes.
Q: Many projects today have long leadtimes. Are robotics projects also being delayed or can they be deployed more quickly?
Nick Longworth –SICK: Robotics projects can be deployed quickly, depending on standardization required by an organization and the need for specialized equipment. These are both strategic questions where an organization must weigh the short-term advantages versus the long-term disadvantages. In terms of standardization, for instance, if an organization requires a particular brand or model of a piece of equipment, that may be difficult to get in today’s market. If they are willing to diversify to more than one brand or model, it may be easier to complete projects.
Kevin Reader – Knapp: There is no doubt that there has been a seismic shift in the cost of design, deployment, and support of robot-based systems—even the costs of the robots themselves have been dropping at the same time that other facets of the economy have been on the rise. Available talent is also getting more plentiful, as student interest and engagement with robotics is increasing. Simultaneously, robots are getting smarter, as AI approaches, programming, and smarter sensors make robots more useful and [allow them to] perform at higher levels. All of this is good news for companies looking to automate through the use of robotics.
Nicolas Chee – ForwardX: The way our solution operates makes for an incredibly short lead and deployment time. The software and coding behind an AMR solution can be largely copied and pasted between projects, and each new project makes the next even faster. Our average deployment period is about one month, but we’ve had some cases where it has only taken seven days. On top of a quick deployment, another advantage is that a company doesn’t need to halt its operations to prepare for an AMR solution.
Erin McDuff – Exotec: Customers can deploy the system in a matter of months and easily expand their systems without interrupting production.
Jonathan Cortellacci – Geek+: One major advantage that we have as a mobile robotics company is that we do not require heavy controls for our deployments, so things like PLCs [programmable logic controllers] don’t impact leadtimes nearly as much as they do with fixed-infrastructure systems. Our power draws are much smaller and less consolidated as well, which minimizes customers’ exposure to cost for high-voltage runs and long lead items, like electrical distribution panels.
Another major advantage is that we can produce and locally warehouse standard project materials and robots. In these cases, we are able to provide leadtimes that are not possible with fixed-infrastructure systems, even during challenging times like these.
Dan Hanrahan – Numina: A robotics picking solution, especially a software-as-a-service (SaaS)-model AMR picking system, can have a faster implementation. However, while picking efficiency gained by implementing robotic AMR technology is a critical factor in warehouse automation, it is not a complete solution. Packing and shipping automation must be part of the solution to drive the highest ROI.
Q: Will a recession impact or benefit robotics adoption, and why?
Robert Nilsson – Plus One: When you consider the fact that some of the key benefits of adopting robotic automation include lowering operational costs and increasing efficiency, it’s safe to say that this type of automation becomes extremely valuable during an economic downturn or recession.
Nick Longworth – SICK: The U.S. market focuses on ROI and strategy when it comes to robotics adoption. If the robotics project is not a strategic project that gets special treatment, then it must have a strong ROI to be implemented. When labor is tight, that ROI becomes stronger. So, the real question here is how impacted the job market will be by a recession and how strategic are the projects being undertaken? Given the lasting impact of the pandemic on the size of the U.S. labor pool, it is possible that the job market could remain tight through a recession and that robotic adoption would remain high because there is no other way for tasks to be completed consistently.
Stephen Dryer – FORTNA: We are at an inflection point in warehouse logistics. The old solution—add more labor —is no longer practical or sustainable. The solution going forward in part is to use technology as a labor multiplier (do more with the same or fewer people). Robotics offer the promise to make operations more productive by freeing available labor up to do higher-value and more rewarding tasks. This means companies can afford to invest more in their employees and thereby reduce the expensive churn they experience today.
Erin McDuff – Exotec: We don’t see this potential challenge as keeping us from revolutionizing the industry. Whether it’s saving a warehouse operator from walking many miles a day or ensuring that businesses can operate in the midst of supply chain uncertainties, robotics have the power to change the way we do business. The benefits that robotics and automation provide to this industry are growing, and I suspect we will see more companies adopting these innovations.
Jonathan Cortellacci – Geek+: Recessions typically involve less demand for labor, cap upward pressure on wages, and reduce disposable income for consumers to spend. It’s hard to imagine that companies would consider adopting robotics more in that environment than today, though I think any adoption impact of a recession would be fairly mild and generally relegated to companies selling more discretionary goods than staples.
Dan Hanrahan – Numina: If you’re an investor, bet on the adoption of robots and automation—it’s a long-term trend that is not going away. Robotic automation is playing a significant role in driving the renaissance in North American reshoring and driving efficiencies in manufacturing and supply chain warehousing operations. Manufacturing and logistics operations will continue to adopt new types of robotics across all facets of our economy—from restaurants to health care, energy, and transportation. If a moderate recession occurs, we may see a slight hesitation in capital investments, but the 10-year growth in automation will happen!
