Picking rates across the sectors: Where do you stand?
Warehouses, on the whole, are much busier than their pre-lockdown predecessors. In October 2020, more than 28% of all retail in the UK occurred online, compared with 18% a year earlier. For many warehouses, throughput has increased to the extent that an average day exceeds previously record-setting seasonal peaks.
Retailers, 3PLs and fulfilment houses have been working hard to successfully manage the mammoth increase in online orders since last year; and its knock-on effect on the supply chain.
Increasing the number of picking operatives, physical expansion and new technology has been needed to scale up quickly and reliably; but has it been sustainable? For many there has been a short-term focus to successfully navigate the crisis and its immediate demands, but thoughts are now turning to the longer term.
It’s unlikely we’ll see consumer behaviour returning to pre-lockdown patterns in 2021. The trend towards online is likely here to stay and that means fundamental structural changes in the supply chain, with more smaller orders destined for the consumer rather than any intermediary.
The ecommerce boom of 2020 will go down in history. It has meant an equally rapid increase in demand for warehouse space, with take-up in the first 9 months of 2020 exceeding that of the previous full-year record set in 2018. Expansion is becoming increasingly expensive, as market forces continue to drive up the cost of space. Many are now considering robots and warehouse automation as a feasible alternative to get more from the space available.
Prior to the pandemic, it was estimated that around 90% of picking was performed manually. But with automated mobile robots (AMR) commonly 5 or 6 times more productive and half the operational cost, it is proving an increasingly attractive proposition for those looking to scale up without costs going the same way.
In the UK manual picking rates tend to range from 50-100 picks per hour, but depending on the set-up and the nature of the items being picked, that can increase to 250-300 with robots and automation, or even to 600+ with a sophisticated high-speed solution.
One report estimates automated goods-to-person order picking can save upwards of 58% on labour costs while increasing efficiency by 84%.
This is because around two thirds of a picking operative’s time can be spent walking the warehouse floor. That’s a lot of time which is not adding value. By cutting this dead time and having AMRs bringing the goods to the picker, speed is increased and accuracy also improves.
Such systems, in conjunction with pick-to-light systems, have been known to improve picking performance to 600 picks per hour, from 100.
This technology has become increasingly accessible too. At the end of 2019, Hikrobot had deployed 12,000+ robots globally, with end user businesses experiencing even higher average efficiency improvements of about 90% and labour cost savings of 50%.
So what might your warehouse expect to achieve? We’ve scoured the internet and had off-the-record conversations with industry insiders to collate the latest picking rates across ecommerce, grocery, pharmaceuticals and textiles.
The Amazon in the room
It would be impossible to look at pick rates without giving some “air time” to the behemoth, pioneer and gold standard that is Amazon. The world’s local shop is the warehouse robot king, supporting pick rates up to 800 per hour in its latest facilities equipped with Amazon’s latest robots (formerly Kiva systems) – achieving more than double Asda’s warehouse capabilities at its most modern warehouse in Lutterworth.
This is not the case across the entire Amazon network though. A UK Amazon staff member working in one of the few remaining non-Kiva equipped distribution centres said that colleagues could achieve a maximum of 250 manual picks per hour and 450 when robot-enabled.
Not far off Amazon’s pace, Ocado’s recent technical improvements at its facility in Erith in south-east London, spurred by COVID-19 demand, has resulted in an increase from 600 to 700 picks per hour.
Ocado’s technology has been widely written about, and its share price too. Ocado’s share price is currently around 10 times that of Tesco, which is the UK grocery market-leader. This is because Ocado is now primarily a tech company.
Its incremental advances in robotics have been developed over years. There have been many iterations from Ocado, since the first warehouse in Hatfield where automated conveyors first routed customer totes to pickers resulting in a pick rate of around 330 items per hour.
Now, Ocado is moving into non-grocery retail with news of two major acquisitions in November 2020 when it agreed to buy Kindred Systems Inc, a specialist “piece picking’ robotics company and Haddington Dynamics, a robotic-arm designer and manufacturer. Both of these will augment it’s already advanced picking systems and make its objective to move into non-grocery retail quite clear.
Not every business can be at the extreme leading edge, such as Amazon and Ocado.
So what of the rest of the UK’s big grocers? Initially manual picking at so-called “Dark Stores” was widely adopted to bring consumers the online experience they craved, but without large-scale investment in infrastructure and robots. Over time these replicas of traditional supermarkets, closed to the general public, struggled to achieve in excess of 180 picks per hour, even with layouts optimised for the pickers.
Now Tesco, Asda and Sainsbury’s have moved towards Automated Storage & Retrieval Systems (AS/AR). Asda’s store in Lutterworth has 140 robots picking from 44,680 bins, capable of presenting 335 bins/hour at each of the 10 picking stations.
Meanwhile, Tesco’s high-tech fulfilment centre in Erith in South East London has increased storage density by up to 60% compared with Conventional AS/AR systems.
Other retailers are still more dependent on manual picking with Waitrose covering three quarters of shoppers by local stores or dark stores – with customers in London covered by automated warehouse operations.
The pharmaceutical manufacturing sector has been an automation leader and an early adopter – and this means a great deal of maturity in the technology and efficiency we see today.
The market-leader, Boots, has been operating a partially automated 850,000 sqft warehouse supplying every UK store for 10 years – recently also investing in 100 ‘co-bots’ to aid staff in picking.
Sigma’s new Watford DC has apparently reached 900 picks per hour by running a hybrid automatic-manual picking system where most pharmaceutical orders (10 million tablets per day) can be fulfilled by robots alone.
Britain’s largest pharmaceutical wholesaler AAH’s Ruislip robots now picks 75% of orders without human intervention, processing 100,000 deliveries a week – or 2.6million items per day.
The glamorous world of fashion may seem a million miles away from the warehouse, but ASOS is one such retailer putting logistics and fulfilment at the heart of its business strategy.
In October this year, it announced plans for any order, worldwide, to be fulfilled by any of its global distribution centres, removing barriers and building extra flexibility.
It has been a leader in its industry, automating many of its distribution centres with a programme that continues today. Early investment in this area in the mid-2010s saw an immediate jump in units picked per hour from 55 to almost 120 and now to more than160 units per hour. Beyond this, having warehouse automation at the centre of its approach, is a key business objective, because it enables the company to compete and offer a better customer experience.
It’s clear that businesses across a multitude of sectors are putting logistics, warehousing and customer experience at the heart of their strategy. Robots and warehouse automation may well deliver a more resilient, efficient and lower OPEX option, but it can also deliver more customers.
Whichever sectors your warehouse serves, there are common trends towards surging online sales, a squeeze for productive warehouse space and a requirement to increase efficiency to compete. Manual picking rates without assistance from augmented automation, in many cases, are no longer enough. Can 50-100 picks per hour continue to sustain your business?
For a more detailed analysis, download our full report