Getting warehouse automation right
The growth of e-commerce, which accelerated further with the Covid-19 pandemic, has drastically changed the logistics landscape in Southeast Asia. With consumers today increasingly shopping online and expecting fast delivery, brands, their supply chains and logistics players are seeking solutions that will help them fulfil orders more efficiently.
Many are now contemplating warehouse automation and digital solutions -- some of which may have never been considered before -- to better serve their customers. This will also entail significant skill changes that need to be employed and closely managed in parallel, in addition to the physical solution chosen.
Accessible automation: Autonomous mobile robotics (AMRs) and similar solutions are increasingly becoming a go-to choice for warehouses and distribution centres in Southeast Asia. AMRs can easily fit within existing warehouse space, are easily deployed and are cost-effective.
In the past, automation in warehouses was only possible if the building was purpose-built for the integration of the technology. The four walls of a building would essentially be built around the automation solutions. However, the flexibility of mobile robotics means they can be easily and quickly adopted inside four walls that already exist. Companies do not need the height, floor loadings or upgrades to existing services that you would conventionally need.
This has democratised automation. Traditional warehouse automation solutions were typically only adopted by larger businesses due to the high investment cost and long payback involved.
On the other hand, mobile robotics are now allowing smaller players to consider integrating automation into their warehouses to better meet growing consumer demands, particularly the fast delivery expected from e-commerce.
Furthermore, with increased competition from other countries, the level of capital needed to automate warehouses using mobile solutions is now comparatively lower, and the return on investment faster.
This type of mobile automation can also be deployed within months, rather than years, and scaled as a business grows. For newer e-commerce players, whose volumes are growing rapidly, or growth levels are not yet quantified, mobile robotics offers flexibility. Additional robots can be ordered quickly to cater to fluctuations in growth, and portability means they can also be easily relocated to a new site if needed.
Automation vs manpower: Even with the accessibility and low cost of mobile automation, barriers remain in parts of Southeast Asia. This is mainly due to the relatively low labour costs in the region.
Although automation can increase output and reduce order processing time, some businesses believe adding more labour can achieve the same result at a lower cost than investing in a machine.
Businesses also ask us whether automated solutions will take significant labour out of their operations and whether the existing workers can be retrained.
However, as people become more educated in many parts of the region, there is now often a lack of labour in warehousing and distribution due to waning interest in jobs such as order picking and inventory maintenance.
Furthermore, with more consumers shopping online, demand is at an all-time high. Even hiring an additional 100 people might not be enough to fulfil orders in a timely manner.
Considerations for change: While warehouse automation is part of a modernised supply chain, there are important questions to consider.
One key element involves examining the pain points of existing processes and how a future optimal process flow should look. Having a good understanding of these can help ensure that the right type of automation is implemented. The last thing a business wants to do is replicate existing poor processes.
Beyond this, employees must willing to embrace change. Transformative solutions such as mobile robotics can result in significant changes to workflow, day-to-day operations and the type of skills needed from the workforce. An effective change management plan should position new automation solutions as further augmenting current employees' work.
Where automation once would have been rejected out of hand, there are now smart, low-cost and highly flexible solutions available to allow businesses to continue growing and thriving. However, it is crucial that businesses have a good strategy in place so as to ensure that they adopt the right type of automation solution at the right cost.
James Christopher is president for Asia of TMX, an Asia-focused business transformation consultancy.