Think robots are out of reach for your small or medium-sized business? It turns out there are models and pricing plans for nearly every budget—and experts at the ready to demystify the process.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
If the calendar says November, then peak season is upon us. And as consumers ramp up their holiday spending, many warehouses and DCs will see a huge spike in volumes, with throughput running several times their normal daily levels.
Automation is frequently the solution to that challenge, and logistics technology firms in recent years have come up with an array of options. From speedy shuttles to capable robots, companies can outfit their facilities with tools that amplify the efforts of their human workers and other assets.
But to many small and medium-sized businesses (SMBs), those technical wonders may seem out of reach, with price tags or information technology (IT) requirements beyond their budgets. Sure, major retailers might have the infrastructure and sales volumes to justify an investment in goods-to-person robots or an automated storage and retrieval system (AS/RS). But smaller operations often assume they’ll just have to get by with temp workers and overtime pay.
However, several major players in the robotics market say that no longer holds true. Just ask the German logistics tech specialistKörber Supply Chain, which reports that fully half of its autonomous mobile robot (AMR) customers are SMBs. Körber offers technology and systems integration services, working with an array of robotics vendors, including the AMR developers Locus Robotics,Geek+, Balyo, and Fetch, as well as makers of 3D storage solutions such as Attabotics.
In fact, Körber says that supply chain tech developers have actually been designing software and other tools for SMBs for several years now, citing examples such as enterprise tech giant Oracle’s NetSuite enterprise resource planning (ERP) platform and Körber’s own Edge WMS warehouse management system for smaller users. What made these and similar offerings possible was the development of the cloud-based software-as-a-service (SaaS) model, which allows vendors to tailor their products (and pricing) to users of any size. Clients typically pay only for what they use via a monthly subscription fee, which eliminates the need for a large upfront capital investment.
Robot manufacturers are now applying a similar strategy to get AMRs into the hands of SMBs. Rather than requiring customers to purchase AMRs outright, many of them will supply robots under a subscription model called robotics-as-a-service (RaaS). One of the best known examples is Locus Robotics, which provides its bots on an RaaS basis. Among other advantages, that model offers a low cost of entry, manageable annual costs, and a return on investment (ROI) in under 12 months, according to John Santagate, vice president, robotics, for Körber Supply Chain Software.
DOING MORE WITH LESS
But even if warehouse robots are increasingly affordable, smaller users often worry about the installation process—specifically, the prospect of a long, drawn-out implementation. Many SMBs operate only a handful of DCs, so they can’t afford to shut down an entire facility to install the new technology.
To address those concerns, Santagate says his company encourages smaller clients to introduce robots at the same time they upgrade their warehouse management system (WMS), combining two upgrade cycles into one. He further notes that many of the newer warehouse management systems integrate so smoothly with warehouse robotics that the robots are often rolling up and down the aisles before the new software has booted up.
Another hurdle for SMBs looking to automate their operations are space and resource constraints. “They need maximum flexibility, velocity, throughput, and productivity,” says Santagate, “but it all has to fit inside a constrained environment.” In essence, he says, “they’re asking how to sustain their growth yet stay in the building for a few more years. So the answer is, they have to ‘do more with less.’”
It’s a similar story over at Fortna, the Atlanta-based systems integration firm. Like businesses everywhere, Fortna’s clients are struggling with systemic challenges like a nationwide labor shortage and a surge in online orders. In response, clients are looking to automate their operations, says Jeff Cashman, Fortna’s senior vice president of corporate development, “but they also say, ‘I don’t want to have to build a new building or install a mezzanine.’” Instead they want to make do with what they have by retrofitting their “brownfield”—or existing—facilities, he explains.
To ease the transition, Fortna often recommends a crawl-walk-run progression that calls for adding automation in stages. “For a lot of people, this [technology] is new, [and] it causes concern. So we have to de-risk it, and we have to demonstrate the value. Then the business can prove out the product and grow that solution, as opposed to having to be all-in. That’s especially important for an SMB,” Cashman says.
It’s also important for vendors to help each SMB define its specific needs, so it will have realistic expectations for the impact of robotics, he says. “It’s not about perfection; it’s about ‘good enough,’ because life changes,” Cashman says. “We have to be able to say ‘The design we have is good enough; it meets the business objectives,’ and not chase the ideal of perfection. The math has to work, no question; but perfection won’t always be the answer.”
ASK THE EXPERTS
In the meantime, there are efforts going on behind the scenes to help reduce the “fear factor” for SMBs—typically by demystifying robotics and simplifying the setup process. For instance, the tech giantSiemens recently launched a project to make industrial robotics more accessible to small and medium-sized manufacturers through a collaboration with Intrinsic. A subsidiary of Alphabet (the parent company of Google), Intrinsic is a robotics software and artificial intelligence (AI) company whose stated mission is to democratize access to robotics. The partners say they have teamed up to explore integrations between Intrinsic’s robotics software and Siemens Digital Industries’ portfolio of technologies for automating industrial production processes.
Likewise, the German nonprofit International Federation of Robotics (IFR)has built an online tool for small and mid-sized enterprises that are looking to automate. IFR says itsGo4Robotics platform helps educate SMBs on how to get started with robotics, offering resources like articles, white papers, and e-books for nonexperts as well as a “five steps to success” checklist.
Educating everyone involved with automation upgrades is essential to the projects’ success, notes Körber’s Santagate. “You need alignment and buy-in with the user’s team, especially in the smallest operations, when the guy using the product might be the owner of the business,” he says. “While a large enterprise organization might have a project management office and a change management process in place, the SMB may not have those. But the challenges they’re facing are no different from an enterprise. They’re probably even more difficult because of their smaller scale. They have a lower threshold of success and risk, and they have to run a tighter operation.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.