The ecommerce boom and under-automation
With so much demand for products and so much demand for warehouse space, it is natural that businesses will need to be able to do more with the little they have. When they don’t invest in the technology to make that possible, the strains they are left with is where you start to see under-automation.
The causes of under-automation come in many different forms, but in the broadest sense they emerge from the following four sources
Digital demand surpasses physical supply
Ecommerce and the surrounding changes in technology have created a dramatic imbalance. While companies have innovated and invested to make it easier than ever for customers to place orders, the same pace of change hasn’t been reflected in warehouse operations.
The dramatic ecommerce growth statistics speak for themselves.
- An estimated 2.14 billion people globally will purchase goods digitally in 2021
- Ecommerce has seen worldwide value growth of 246% between 2014 and 2021.
- IBM estimates the behavioural shift away from physical stores and towards online shopping has been accelerated five-fold in 2020 thanks to the COVID-19 pandemic.
- The UN estimates that in the United Kingdom, between 2018 to 2020 online purchases jumped from being 14.9% of all transactions up to 23.3%.
By contrast, warehouse operations techniques remain largely unchanged. Manual movement of goods is very much the norm across warehouses of all sizes, as can be seen by the need to hire more staff as more demand emerges. In September 2020 warehouse employee numbers in the US reach a new high of 1.25 million people.
With no new embracing of techniques, warehouses have no choice to simply expand their workforce as demand grows. Given that the underlying approach of warehouses in this time hasn’t changed significantly, it is no wonder we are seeing the growing strains of under-automation.
Real estate unavailability
Naturally following the huge explosion in ecommerce demand, there has been a corresponding explosion in warehouse space needs, as some estimates suggest that Q1 of 2021 saw demand increase by 232% from the same period in 2020.
In contrast, warehouse supply has been less well developed, with some regions of England seeing drops as dramatic as 39%.
Speaking in Logistics Manager, the Head of UK Logistics and Industrial at Cushman and Wakefield – Richard Evans said “The market trends accelerated by the pandemic continued to drive demand during Quarter 3. Robust take-up is fast eroding existing supply, with some regions and sub-markets now facing a shortage of suitable accommodation across certain size bands.”
With less and less room to expand, but the technological capacity of demand growing higher and higher, suddenly under-automation is clear to see. Manual warehouse operations are seeming slower and slower in the context of the ever-accelerating pace of every other aspect of B2B and B2C commerce. With new technological approaches, these problems can be solved.
You might then think “why hasn’t there been more innovation in the warehouse?” In response to all this increased demand, wouldn’t you expect warehouses to find new ways of dealing with this extra interest and trade?
Ironically, it is the massive body of success that has led to stagnation, rather than advancement. Many warehouse operators have chosen to perceive the rapid and substantive success of ecommerce and other warehouse-centric commercial models, as vindication of current practice.
With so much success being thrown at their feet, many warehouses feel compelled to continue as normal, ignoring problems and strains. This is seen in the hugely rising numbers of new warehouse employees, rather than a sudden spike in investment in new warehouse technology. The attitude is to do more of the same, rather than look for a new path.
Warehouse utilising businesses find themselves looking at the recent growth in ecommerce and other areas as evidence that everything is okay. They are dismissing difficulties like the costs of hiring and releasing new staff every peak season, or the inherent difficulty of adapting to new business conditions with fixed storage systems as just “the cost of doing business”.
The reality is however that the current situation is unsustainable in the long term. As expansion becomes more difficult, staff become more expensive, and the market becomes more seasonal and unstable, alternative models must be sought out.
While some businesses have grasped that under-automation is a serious problem, they don’t follow through far enough in their thinking to properly understand the cure that is flexible robotics.
There is a widespread perception that although under-automation is a problem faced by businesses of all sizes, the cure is something that can only be purchased by companies big enough to have become household names. Amazon and Ocado, building gargantuan specially designed facilities to house state of the art equipment. All with the intent of handling thousands of orders every day.
With flexible robotics often perceived as being out of reach of the non-mega-corporation types, many businesses don’t even think to glance in the direction of the cure to under-automation.
Discover flexible robotics – discover Wise Robotics
To see for yourself how flexible robotics can cure your under-automation, contact Wise Robotics today. Speak with our experts to learn more about industry 4.0 and the future of flexible robotics.
You can even visit us in person. Wise Robotics is proud to own and operate Europe’s first flexible robotics demonstration centre. See the robots in action, learn how they work, and why they offer so much in the way of improved efficiency.
Once you witness the capabilities of flexible robotics for yourself, you’ll understand the opportunities available when your under-automation is cured.