A Q&A with Sean Ryan, Head of Sales and Consulting, Swisslog Australia.
QUESTION: How can automation be used in periods of unexpectedly high demand (for example, the e-grocery industry during the pandemic)?
ANSWER: When Covid-19 was at its worst in Australia (around March-April 2020), grocery store shelves were stripped bare, and it looked like we didn’t have enough product to keep up with increased demand. However, this was deceptive, because at any given time, roughly three months’ worth of goods exist within the supply chain – the challenge is getting it into and out of distribution centres, and into stores.
This is where high density, high throughput Automated Storage and Retrieval Systems (ASRS) could be a major help in meeting future demand spikes. These systems can store more pallets in less space, and retrieve them more efficiently, compared with manual or alternative technologies. The faster goods can be retrieved and sent to store, the faster shelves can be restocked to meet higher demands.
Automated systems are typically more compact, delivering major savings that can be reinvested in areas that truly make a difference to business, such as service to its existing markets and research and development of new markets. A more agile, more intelligent business can move sooner to take advantage of emerging favourable trends, and more swiftly to avoid impending supply gaps, traps and flaws in evolving plans.
Finally, warehouse automation is becoming increasingly modular and flexible in design, functionality and throughput. This enables additional robots, pick ports and even, to a certain extent, storage to be added to respond to unforeseen economic circumstance such as Covid-19. This will increasingly be the case as suppliers of automation look to increasingly provide solution ‘flex’ by offering capacity via XaaS models. (XaaS is a general term for cloud service delivery models. It stands for 'anything' (X) as a service.)
QUESTION: What effect did “panic buying” have on supply chains in the e-grocery industry?
ANSWER: According to research from Acosta, a sales and marketing agency in the consumer packaged goods industry, about 65% of consumers changed their grocery shopping behaviour as a result of Covid-19.
Now, many industry analysts and e-grocery companies are projecting that these short-term adaptations will translate into long-term behaviour changes. The pandemic has, in many cases, accelerated changes that were already happening in the market.
The challenge for grocers – and traditional retailers more broadly – is adapting to a large step up in demand, while still providing competitive fulfilment times. Automation is an asset in achieving these dual objectives, but selecting technologies that meet the unique demands of the e-grocery industry is the key to success.
In much the same way that behaviours have been accelerated by Covid-19, so has the development of automation systems. Spurred on by market demands, we’re seeing a stronger development of standardised automation systems that leverage proven technology, optimised for grocery fulfillment, to enable faster deployment than was previously possible.
QUESTION: Do automation technologies have health benefits (that can help in a post-Covid world, and have wider benefits beyond that)?
ANSWER: Yes, the health and hygiene benefits of automation have existed for some time, and companies that have invested early have reaped the benefits throughout the global Covid pandemic.
Reduced manual handling of goods – particularly in food, beverage and pharmaceutical applications – has broader long-term sustainability benefits to society, including lowering the risk of product contamination, product tampering or pilferage.
Naturally, hygiene benefits have never been more apparent than in a post-Covid world, where hygiene is top of mind for all companies and individuals. Reduced person-to-person contact and reduced manual handling of goods can significantly reduce the risk of spreading disease or infection. In a post-Covid world, hygiene is not an option for a sustainable business – it is a necessity.
In one example, a customer of ours that recently deployed mixed case palletising of order pallets was able to continue to execute to increased demand with minimal impact, as the solution ran for longer each day as compared to their previous manual operation where increased demand would mean more people. Whilst the decision to deploy the solution did not consider such a pandemic, its timing has highlighted another benefit of needing to manage less people when automation is deployed.
Long-term sustainability is also further enhanced by a greater level of worker safety. With workers no longer having to go deep (or high) into racking to retrieve products, the risk of injury (both repetitive strain and accidental) is reduced. Workers in an automated factory – from technology controllers, to maintenance crews, to warehouse managers – typically have a safer, healthier job than labour workers in more manual factories.
QUESTION: For companies looking to invest in automation, what should they look for, to future-proof their operations?
ANSWER: The best automation solutions will depend to a degree on a company’s selected e-fulfilment strategy, but as with e-commerce automation in general, grocers should seek out solutions that are flexible, data-driven and robotic to ensure they won’t become obsolete as the market changes and can leverage new technologies as they emerge.
Flexible solutions are those that can scale easily and adapt to change as it occurs. Data-driven solutions deliver the intelligence to better manage product flow and have the capability to incorporate machine learning that enables them to self-optimise.
Robotic solutions are required to increase productivity and drive down fulfilment costs. The primary automation solutions being used or considered by the industry are either robot-assisted picking or goods-to-person automation systems.
Goods-to-person picking is a concept that has been widely adopted in e-commerce and multi-channel warehouses to enable higher productivity and faster order fulfilment times. Instead of pickers walking up and down warehouse aisles to pull orders, the goods-to-person system allows the picker to remain stationary, with an automated storage and retrieval system delivering the products they need to fulfil the next order as it is needed. Pick time is thus reduced significantly, and accuracy is improved, while pickers experience less fatigue and injury risk.
QUESTION: In the past, automation technologies have had long lead times. How quickly can new automation technologies be completely installed and ready to use, in response to unexpected events?
ANSWER: While I would always advocate for a ‘proactive’ not ‘reactive’ approach to such events and to automation strategies more generally, it’s true that the installation time does play an important role in how effective an automation solution is for a business.
At Swisslog, we’ve been focusing for the last several years on reducing the time to deploy automation. The new generation of robotic and data-driven material handling solutions we offer already provides inherent advantages over legacy automation in terms of deployment times and flexibility.
But being faster than legacy automation is no longer enough, as the Covid-19 situation made very clear. Today, even the 12-month deployment times we could offer customers on a system such as AutoStore just aren’t fast enough.
The main reason AutoStore implementations take even this long is because of the need to customise software to the application. Virtually every installation to-date has required software customisations.
But now that Swisslog has completed more than 200 implementations worldwide, and consistently integrated new features into our standard offerings, that’s much less likely the case. Particularly for micro-fulfilment applications, such as those where fulfilment is integrated into an existing grocery store, our standard software can meet the requirements of a broader range of applications.
That allows us to cut AutoStore implementation time and software costs by as much as half with standardised systems that deliver robust software functionality. With these standardised systems, companies can go live in as little as six to eight months.
A word of caution:
Anticipated behavioural changes as a result of Covid-19 have created increased urgency around the need for automation within many grocery operations. As we move out of the crisis and consumers lose their tolerance for the extended delivery times that are now necessary, grocery operators need to be prepared with fulfilment processes that rely less on manual labour, have a greater storage density, increased service offerings and close the gap between the profitability of online and in-store customers.
But the urgency grocery operators are now feeling can’t compromise long-term performance of fulfilment operations. Choosing solutions simply because they offer the fastest deployment can result in systems that create as many problems as they solve.
Fortunately, we are at a stage in the evolution of e-grocery automation that we can effectively balance speed and performance. By building on the experience of early adopters and working with standard configurations of proven automation systems, Swisslog can offer best-in-class e-grocery automation with fast start-up times, such as the six months mentioned earlier.
QUESTION: What role does staff training play in automation implementation?
ANSWER: The key to implementing a successful automation system, and reaping the long-term efficiency and productivity benefits, is quality staff training. In addition to the training the supplier provides, seek an expert who is highly familiar with the product, the technology, the software, and the solution as a whole – they will be your best trainer. Once your operations staff have been trained on the new system, ensure the knowledge is retained in the organisation to be able to continually pass on that knowledge to new employees.
In addition to training, the change management process is equally important. I would argue that training is one aspect of that change management process, with the broader transition from an old operation to a new operation in a physical location, inventory transition, communication with stakeholders such as employees, suppliers and customers all important aspects of the overall change.
QUESTION: Does automation only benefit the major players?
ANSWER: This is a common misconception, borne out of the early days of automation, when only the major players could afford the ‘cutting-edge’ technology. It’s certainly true that the larger companies (like Amazon, large grocery retailers or multinational FMCG companies) extract the maximum benefit from automated technologies, because the efficiencies increase with the scale of the operation. However, with the rapid advance of technology and commensurate cost-efficiencies, automation can now benefit more compact, specialist organisations – particularly those that distribute nationwide, or export overseas.
But another word of caution for new players: don’t be tempted by a piecemeal approach. When major events such as Covid impact a business, it can be tempting to invest in a short-term ‘band-aid’ fix, but the result will be that you end up with several different and likely incompatible systems that are incapable of interacting with one another.