Warehousing has been around a long time. It is an old profession, with established processes and accepted practices, with human labor at its core.
Throughout its history, technology revolutions have arrived, been applied, and prospered or failed. While the likes of Google and Amazon are now household names, early tech pioneers such as AOL and MySpace have been assigned to the history books.
Implementing new technology is often a major investment, so it’s vital to assess past successes and failures, take key learnings and put them into practice when considering any new tech by evaluating its value to the business.
I am sucker for a gadget – I can’t help myself. But having the latest gadget to look cool isn’t enough in business. You have to weigh up its value in terms of being useful and delivering a return on investment.
The biggest evolution we are facing in the world of Warehouse 4.0 is the rise of the Autonomous Mobile Robots (AMRs). As yet, they are not sophisticated enough to replace humans on the warehouse floor, so are they simply a passing gadget or will they become an essential utility forming the future of logistics and fulfillment?
AMRs are here and I believe to stay. But, not in their current form. As mentioned, gadgets are cool – and that is the current design trend. I’d classify them as gadgets for the following traits:
- Limited by weight or capacity to support order picking: most are designed to offer limited support for your warehouse workers’ current operations and capacities;
- Limited by functional transaction support. There’s been a focus on order picking. What about Replenishment, Putaway, Returns, Exception Handling, and the always needed ‘Miscellaneous’ tasking that occurs?
- Per Unit Price: this is the biggest concern for most businesses. If AMRs are to be suitable substitutes for scarce labor resources, why is their annual cost four, five, even six times an average warehouse labor resource’s burdened pay (hourly wage + benefits + employer taxes)?
The next wave of AMR technology will move from gadgetry to utility and soon! In the next year, you’ll see:
- Per Unit Price Justification: the barrier for entry in the AMR target market must be reduced, and that reduction cannot come at the sacrifice of the behaviors of your selected AMR.
- Expansion of functional and transactional support: warehouses do more than pick orders. A lot more. The translation of that work, today done by scarce resources, into an AMR function needs to be dramatically expanded to increase the utility of any AMR your business invests in.
- Finally, capacity constraints. Today, it makes very little sense to deliver an AMR with 25% of the capacity of a large cart. Think of it this way: back of the napkin math reveals that a person performing 40 picks with a cart, even incurring the travel time needed, is gaining more utility than three or four AMRs supporting those operations. When you couple capacity constraints with the price per unit challenge in the current offerings, justification becomes difficult.
So what do I think? AMRs are not just the future, they are the here and now. In the current format they are an expensive gadget, but in the next year this is going to change. The technology is being developed and costs will tumble, making them an affordable option for businesses of all sizes and a vital utility for those having to compete in this fast-paced world of e-commerce.