In 2012, Amazon acquired Kiva Robots to use in the warehouse.
During a couple of recent trade shows and conferences, I heard some intriguing presentations on how robots taking over warehouse worker jobs. By many accounts, venture capitalists are flocking to fund these companies. Naturally, I wanted to get a reality check from real end users and decision makers. I wanted to know, if they had decided to move to robotics, about the return on investment (ROI) they expected, as well as how they built their case and sold it to management.
Recently, during a client meeting, I asked one datacenter (DC) manager, a really smart guy, about what he thought about the idea that robots would replace people. This DC is located near Boston, so worker costs are high, about $19 per hour. He also had many long-tenured workers, making them even more expensive. I figured that the hype and buzz about robots would be exciting for him. Imagine my surprise when he told me that a deployment of robots would cost nearly the same as human workers. Instead of paying supervisors to manage people, he would have to hire programmers to manage the robots—and those professionals come with a much higher price tag, with salaries in the six figure range rather than $40,000 to $60,000 per year for a warehouse supervisor. However, one programmer could manage more robots than a single supervisor with employees.
Next, he turned to the question of the way that work ebbs and flows in most warehouses. With humans, he can send people home or give people more hours depending on how much work there is to be done. Meanwhile, the deployment of robots carries a high initial price tag.
Just the same, he admitted that he would at least consider robots the next time he has to deploy a new conveyor or material handling equipment. Robots can be easily configured and/or programmed to perform different functions, a reality that is helpful in helping organizations evolve to work with changes in business
Especially in the supply chain, organziations distributing products need to regularly evaluate their businesses including technology, people, and processes, every five to seven years at minimum. Added to that, customer whims are changing at an ever quicker pace, requiring OEM’s to act even more quickly than ever before.
For businesses trying to react to peak holiday seasons, robots may offer a compelling argument, compared to hiring temporary seasonal workers. Margins become critically important, but the need for efficient and effective customer service, as well as timeliness, remains as important as ever. Often, warehouse managers call “all hands on deck” to get through the rush weeks or hire temporary workers. Some retailers have tools that are used only during holiday season by temp workers. It would be important for organizations to weigh the pros and cons of how robots might or might not help scale up during a peak.
I finally concluded after this conversation that there are no easy answers. What do you think will happen? Will robots replace human workers in the warehouse? What do you think you’ll see in your supply chain? Let us know in the comments section below.
ABOUT THE AUTHOR
Puga Sankara is the co-founder of Smart Gladiator LLC. Smart Gladiator designs, builds, and delivers market-leading mobile technology for retailers, distributors, and 3PL service providers. So far, Smart Gladiator Wearables have been used to ship, receive, and scan more than 50 million boxes. Users love them for the lightweight, easy-to-use soft overlay keyboard and video chatting ability, data collection ability etc. Puga is a supply chain technology professional with more than 17 years of experience in deploying capabilities in the logistics and supply chain domain. His prior roles involved managing complicated mission-critical programs driving revenue numbers, rolling out a multitude of capabilities involving more than a dozen systems, and managing a team of 30 to 50 personnel across multiple disciplines and departments in large corporations such as Hewlett Packard. He has deployed WMS for more than 30 distribution centers in his role as a senior manager with Manhattan Associates. He has also performed process analysis walk-throughs for more than 50 distribution centers for WMS process design and performance analysis review, optimizing processes for better productivity and visibility through the supply chain. Size of these DCs varied from 150,000 to 1.2 million SQFT. Puga Sankara has an MBA from Georgia Tech. He can be reached at email@example.com or visit the company at www.smartgladiator.com. Also follow him at www.pugasankara.com