How robots are changing Supply Chains by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

One business area ripe for business process disruption enabled by robotics is supply chain execution, especially in order fulfillment processes in the warehouse. These processes typically involve a high degree of human involvement as well as a tremendous amount of movement throughout a facility. Now, it’s not as if robotics have been absent from these areas in the past; there are use case examples, but none at a large scale across supply execution. Those organizations that have introduced robots into their warehousing and fulfillment operations have delivered added value including productivity improvements, efficiency gains, the capability to better scale up/down with demand spikes and the ability to improve customer service levels.

The most familiar example of robotics in the fulfillment process is at Amazon. Thee-commerce giant acquired Kiva Systems (now known as Amazon Robotics) in 2012 for $775 million. Since then, Amazon has continuously expanded their use to upwards of 80,000 robots across 25 distribution centers. Through their deployment, Amazon has been able to accelerate delivery times and reduce fulfillment related costs. According to a note published by Deutsche Bank, the deployment of the robots equates to a roughly $22 million per year savings in facilities where they are in use, or an estimated 20% reduction to operating costs. If Deutsche Bank’s estimates are close, Amazon has proven that there is tremendous value to be gained through the use of robotics within the fulfillment center.

For some, a Kiva-type model will work quite well. These utilize fast-moving robots that shuttle entire racks of inventory from a segregated section of the fulfillment center to a picking station, where a picker selects the inventory needed to fill an order. After a pick, a robot returns the rack to back to the floor and moves on to the next pick. A rack-to-person model is best suited to high throughput facilities where speed is the most important element. The benefits include the ability to rapidly move product to picking locations and accelerate fulfillment cycles. However, the rack-to-person model also has its drawbacks. For example, it requires some facility modification to create a segregated area where the robots can safely operate and it requires a guidance mechanism to ensure that the robots operate within the appropriate spaces. These systems are not necessarily collaborative because humans aren’t allowed to work in the same aisles where the robots are operating.  One final drawback is that with these models, half of the movement is spent returning racks after a pick, essentially retaining 50% of the wasted movement in the process.

References:

Santagate, J., & Santagate, J. (2018, January 25). NextGen Supply Chain: The Robots are Here. Retrieved from https://www.scmr.com/article/nextgen_supply_chain_the_robots_are_here

Questions:

  1. How are robots disrupting supply chains?
  2. How are robots increasing operating efficiencies?
  3. How are robots helping in warehousing and fulfillment operations?

 

 

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