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Körber Supply Chain Blog

24.11.2020

When labour is readily available, why invest in automation?

Nishan Wijemanne, MD APAC for Körber Supply Chain Software, talks about supply chain challenges for ANZ businesses and how Körber can help navigate them.

Warehouse automation is still a worthwhile investment for supply chain managers, even if they’re not experiencing a shortage of labour. Here are four reasons why.

When it comes to labour, Australia and New Zealand differ from their North American and European counterparts. While labour may be more readily available here compared to the US, working in a warehouse is still often regarded as an unattractive career choice. This means it can be difficult to attract and retain a reliable and committed workforce. Coupled with the rising demands of e-commerce, this has presented a challenge for supply chain managers across these regions.

Utilising technology such as automation in the warehouse can elevate a warehouse worker’s role into a much more interesting and rewarding one. By automating much of the picking, packing and routine procedures, employees have the added benefit of upskilling into more highly advanced roles.

With the supply chain becoming increasingly complex, there is a need for agile and highly skilled staff. Introducing automation to perform the most mundane and repetitive tasks empowers the workforce to take on more meaningful ones. This provides businesses with the added benefit of not only increasing productivity but attracting and retaining a highly motivated and committed workforce ensuring that you remain competitive in a global environment.

In this article, we discuss how warehouse automation can help elevate businesses in Australia and New Zealand.

Why invest in warehouse automation?

1. Meet social distancing requirements for COVID-19

The COVID-19 pandemic has fundamentally changed the way companies around the world operate. Australia, for instance, has introduced exceptionally strict regulations regarding essential businesses and how they can and cannot operate in the midst of COVID-19. Social distancing and keeping warehouse employees healthy are a priority, but companies still have a responsibility to get products to customers on time.

By using autonomous mobile robots (AMRs) for picking and sortation, supply chain managers can get products out as quickly as possible while enforcing social distancing. Supply chain robotics remove the time-consuming task of picking and make it so that fewer people are needed on the floor. This means employees can maintain a safe distance from each other. Plus, with voice-picking technology, workers don’t even have to touch their systems to use them. This helps reduce the risk of COVID transmission even further. 

2. Meet the demands of e-commerce

Australian Post, the nation’s postal service, recently revealed an 80 percent growth in e-commerce spending across Australia.[1] This represents a total transformation from traditional brick and mortar retailers to an e-commerce fulfilment model. However, the rise of e-commerce also comes with increasingly high customer expectations and raises the risk of potential bottlenecks.

Fortunately, automated solutions such as those Körber offers can optimize the speed and accuracy of picking, which helps employees keep up with the increased volume of orders as they come in. These warehouse technologies also use artificial intelligence and machine learning to determine which goods go into which vehicles based on the delivery sequence. This streamlines the fulfilment process and irons out any kinks related to logistics and transportation. The demands of e-commerce are constantly shifting, but well-placed warehouse automation helps supply chain managers rise to the occasion and make sure customers get their orders on time.

3. Increase speed of fulfilment

According to customer research conducted by Dropoff, 99 percent of customers say fast delivery is important when deciding where to make a purchase. Sixty-nine percent wouldn’t purchase from a retailer again if their delivery was late.[2] So, how can companies shrink the gap between the warehouse, delivery truck or plane, and customer?

This is where pop-up fulfilment centers powered by warehouse automation and supply chain robotics come in. Real estate in Australia and New Zealand is very expensive, therefore many supply chain managers are using fulfilment out-of-store more often to cut down on costs. This has the added benefit of bringing delivery closer to the customer, so they get their products faster. Outfitting these fulfilment centers with full-fledged warehouse technology increases agility and trims order to delivery time — two major brand differentiators. The best part is that these fulfilment centers can be up and running in a matter of weeks. 

4. Lower warehouse operating costs

One of the primary reasons why supply chain managers are often slow to adopt automation is because they believe it’s a significant capital expenditure. Yet supply chain robotics and automation can help companies unlock innovation without driving up operating costs.

Many supply chain technology providers offer monthly robotics as a service (RaaS), so companies can reap the benefits of warehouse automation without making a huge upfront commitment. This option is particularly popular in New Zealand, where the market is smaller and companies are more willing to test out new warehouse technology. Warehouse automation increases picking accuracy, optimizes operations, and maximizes existing labour — all factors that cut costs and drive revenue.

What does the future of warehouse automation look like?

The future of warehouse automation has a place for human workers, as the supply chain has always been a human-centric industry. This isn’t likely to change. Still, the first fully automated dark warehouse could be up and running at the end of 2020 in New Zealand.

Instead, the goal is to cultivate highly efficient warehouses by using automation and supply chain robotics to reduce manpower by 80 to 90 percent. It’s more productive and efficient to have 20 to 30 operators focusing on complex warehouse operations than 100 operators doing the mundane work of picking and sorting. As such, the future of warehouse automation uses technology to make the most out of labour — not replace it altogether. Partnering with an experienced supply chain technology provider like Körber can help companies strike the perfect balance.

 

Sources:
[1] https://powerretail.com.au/in-focus/talking-point-aus-post/
[2] https://cdn2.hubspot.net/hubfs/1818776/I%20Want%20It%20Now%20Retail%20Ebook%20March%202018.pdf

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