The Biggest Robotic Opportunity
What a time to be alive. We are at the start of the next great industrial revolution! Robotics and automation will change forever the manufacturing ecosystem.
Sky-high consumer expectations are driving businesses to keep up with demand. Listen to insights on how industries like pharmaceuticals and automotive are gearing up for the future, the shift toward employee-friendly automation, and tips for navigating the noisy world of tech options.
Consumer-Driven Logistics Challenges: Rising consumer expectations globally are putting pressure on warehousing and logistics. The demand for variety, customization (e.g., engraved cell phones delivered by drones), and fast delivery creates complex fulfillment challenges, especially during peak seasons like holidays.
Excitement in Automation and Robotics: The warehousing and automation sector is dynamic due to the puzzle-like challenge of meeting consumer demands. Innovations in technology and strategies offer opportunities to solve complex logistics problems, making the field engaging and rewarding.
Small and Mid-Sized Companies Adopting Automation: Historically, large companies led automation due to their resources. Now, small and mid-sized businesses can leverage insights from big players via expert integrators and white papers. The shift is driven by more accessible, less disruptive automation solutions.
Automation Adoption Stats: 80-90% of fulfillment operations still lack automation (e.g., conveyors, robotics), despite high consumer demand. Past barriers included high costs ($10M+ projects) and operational shutdowns, limiting automation to mega-corporations with multiple facilities.
Brownfield vs. Greenfield: Brownfield projects involve integrating automation into active warehouses without halting operations, likened to "fixing a car while driving." Greenfield projects start from scratch in new facilities, allowing full design control but are less common.
Modern Automation Solutions: Advances like AGVs (Automated Guided Vehicles), AMRs (Autonomous Mobile Robots), and software enable incremental improvements without overhauling operations, making automation viable for smaller warehouses.
Industries Ripe for Automation:
Established Players: Large 3PLs (e.g., DHL, GXO) and retailers (e.g., Macy’s, Walmart) have long benefited from automation.
Underserved Segments: Automotive aftermarket, medical devices, pharmaceuticals, and medical supplies are emerging due to growing demand and tailored technological advancements.
Challenges in Automotive: Diverse products (e.g., mirrors, carburetors) require specialized solutions compared to lightweight apparel, which dominated early automation.
Software in Automation: Integrators may develop proprietary software (e.g., warehouse management, control, and execution systems) but often adapt existing or client-preferred solutions (e.g., Manhattan’s platform) to fit specific needs, avoiding one-size-fits-all approaches.
Omnichannel Fulfillment: Consumers demand flexible options (e.g., ship to store, home, or alternate locations), blending online and in-store experiences. Retailers like Home Depot exemplify this, offering multiple delivery choices, complicating logistics but meeting consumer expectations.
Cart Abandonment and Delivery Speed: Studies show 70-80% of online carts are abandoned, often due to slow or inconvenient delivery options. Retailers lose significant revenue when competitors offer faster, cheaper shipping, driving the need for automation to optimize fulfillment.
Case Study: Specialty Retailer: A retailer lost sales to a wholesaler offering faster, cheaper shipping for the same product. Automation was pursued to match the wholesaler’s efficiency, preserve profit margins, and compete effectively.
Choosing Automation Partners: With many providers (e.g., 3,000 AMR manufacturers) making similar claims (2-3x pick rates, halved labor costs), companies should seek agnostic partners who explore tailored solutions rather than pushing specific products. Quick recommendations after brief discussions are a red flag.
Labor Shortage and Beyond: Automation is no longer just about cost-cutting but addressing labor shortages (e.g., unfilled warehouse roles) and boosting output without expanding payroll. It also improves employee quality of life by reducing physical demands (e.g., replacing cart-pushing with system management), enhancing safety, and offering upskilling opportunities.
Philosophical Shift in Automation: The focus has shifted from headcount reduction to employee well-being and operational resilience. Companies aim to retain veteran workers, improve job satisfaction, and align with consumer-driven demands for efficiency and speed.
Future Trends: Industries like pharmaceuticals, medical devices, and automotive parts are poised for automation growth due to high-volume needs and omnichannel opportunities. Advanced software and distribution solutions will support these sectors’ evolution.
