Warehouse Automation: The Next Generation

Warehouse Automation: The Next Generation

Is automation the final frontier in your enterprise?

Envision a self-guided forklift streaming down a narrow aisle, feeding inventory into a rack system towering 40 feet above the warehouse floor, while an auto-guided mini-robot transports outbound inventory to fulfillment stations lit up like holiday lights, enabling order processing of up to 2,400 picks per hour. As the perfect order is complete, a high-speed conveyor shuttles packages toward a stationary robot, which loads the contents into a driverless tractor-trailer. Could this be a look into the warehouse of the 22nd century? Nope, it’s the modern distribution center of today.


The Shining Benefits of Light Technology
Stardate: The Future

Automation is changing paradigms in traditional warehouse operations, starting in DCs across the global supply chain. With the emerging rise of e-fulfillment centers and centralized DCs across North America, companies are seeking ways to maximize throughput, while enhancing order accuracy through the use of automated materials handling (MH) equipment, high-speed conveyor systems, and robotic applications.

As we go deeper into the new year, distribution centers—specifically e-commerce facilities—are recovering from the onslaught of orders that took place leading into the holidays. “During the six weeks prior to the holidays, retail orders can increase 10 to 20 percent,” notes Eric Lamphier, director of product management for Atlanta-based supply chain management software company Manhattan Associates.


How do distribution and e-commerce facilities keep up with year-end demand, while also maintaining inventory balance in the company’s operating supply chain?

When Ventura, Calif.-based Patagonia found it a challenge to manage its catalog and web-based orders during peak seasons, the clothing and accessories retailer turned to Dematic, a supplier of logistics systems for factories, warehouses, and distribution centers with U.S. offices in Atlanta, to integrate a highly automated modular conveyor system in its Reno, Nev., DC.

With several thousand orders moving through its distribution channel daily, Patagonia’s outdated conveyor process was unable to handle the volume of electronic and catalog orders, creating distribution bottlenecks, failure to meet delivery expectations, incorrect shipping destinations, and excessive return costs.

While evaluating the decision to expand its Reno DC, Patagonia commissioned Dematic to upgrade its conveyors to an intelligent solution, enabling the sorting system to control the speed of materials flowing along its conveyor belts to prevent bottlenecks. Installed in only five days, the new MH system enabled Patagonia’s DC to separate and sort heavier cartons destined to store locations from smaller parcel deliveries shipped directly to e-commerce and catalog customers.

After implementation, the results were measurable in fewer than nine months. Order accuracy improved and man-hour efficiency increased by 20 percent, while power consumption decreased by almost 30 percent as a result of upgrading from a traditional roller conveyor system to Dematic’s belt-driven technology.

Automation Evolution

Automation in DCs across North America is not limited just to upgrades in high-speed conveyor applications. Innovative supply chain solutions in today’s next-generation warehouse include pick/put-to-light, auto-guided vehicles (AGVs) for storage and retrieval, voice-directed technology, wearables, radio frequency identification (RFID) scanning, and robotic applications.

RFID equipment emerged during the World War II era as a combination of telecommunication and laser technologies. But it wasn’t until the dawn of the 21st century that the equipment became more affordable and user-friendly in the form of handheld applications. Advancements since the early 2000s include hands-free RFID technology, voice-activated systems, and wearables.

Robotics hit the manufacturing scene more than 50 years ago when Unimation, a small supplier, introduced an assembly robot to General Motors in 1961.

Since their early applications, robotic implementations stayed focused on the manufacturing sectors—until now. Today, vision-guided robots have emerged in DCs for loading/unloading, retrieval/putaway functions, pallet stack solutions, and goods-to-person applications. In fact, robotic installations in the United States were up by 11 percent in 2014 over the previous year, and the International Federation of Robots predicts a 15-percent annual growth rate for robotics implementation globally.

In the fulfillment realm, Amazon has been the leader in robotic applications over the past five years, and plans to add 16,000 new robots to its distribution eco-system in 2016. Not to be outdone, Walmart announced earlier in 2015 that it plans to invest $2 billion in its e-commerce platform over the next two years. The integration will include high-end MH solutions.

Next-generation automation in warehousing is not exclusive to the mega-retail and e-commerce platform providers, however. Many mid-sized distribution organizations have made a commitment to robotic palletizing, case packing, AGVs, and high-speed conveyor systems.

Sorting at Warp Speed

When Cabella’s, the world’s largest mail order, retail, and Internet outdoor outfitter, decided to open an eastern seaboard DC in West Virginia, it engaged Indianapolis-based materials handling systems provider Bastian Solutions to assist in integrating a fully automated facility, complete with the latest materials handling equipment.

Cabella’s new Wheeling, W.V., facility included 25,000 feet of automated conveyors, two sorters to handle retail and catalog fulfillment, and 240 positions for put-to-light systems. The outfitter’s goal was to process 90 cartons per minute; after implementation, the sorters were able to exceed that goal by achieving a high-speed sorting output of 94 cartons per minute.

The optimal time to upgrade to a smarter and more automated warehouse is when a distribution center expands, relocates, or consolidates. Major installations can be disruptive to a functioning DC. E-commerce centers are leading the trend in upgrading to advanced MH equipment, but the rest of the distribution markets can watch and learn which integrations are most effective and adaptable to standard warehouse applications.

Next-generation DCs provide order accuracy and speed, particularly in high- throughput facilities, such as e-commerce, apparel, pharma, and food processing warehouses where automation has become the norm. “It’s no longer about getting ahead of the automation curve,” says Mike Clemons, senior consultant for Bastian. “Operating an intelligent warehouse means implementing the modern technology available in today’s arsenal of tools without falling behind the competition.”

New warehouse operation advancements are linked to an integration of software solutions that drive the use of MH equipment, inventory optimization tools, and robotics. Best-in-class next-generation software suites integrate highly automated MH equipment with enterprise software solutions. An example in today’s modern warehouse is a warehouse management system (WMS) that exchanges real-time data with a voice-directed or put/pick-to-light application. Another link between software and advanced automation is an application that directs AGVs to retrieve orders while tracking inventory levels in real time.

A new trend in software applications is the concept of warehouse control systems (WCS). The WCS enables a DC’s software to interface with its materials handling equipment, order retrieval systems, and distribution technology.

“When it comes to highly automated facilities, warehouse control systems can provide real-time data access where the download is measured in milliseconds,” according to Roger Counihan, an account executive for Fortna, a professional services and engineering firm based in West Reading, Pa.

In a smart warehouse, all hardware and software technologies interface with each other. A WCS optimizes inventory levels, while maximizing throughput via advanced goods-to-person applications through the use of pick/put-to-light technology, robotics, and high-output conveyor systems.

Customization is the key to making software and advanced automation sync. “End users must take a holistic approach when integrating existing software applications with today’s materials handling advancements in warehouse operations,” Clemons says. “You can’t operate one without the other.”

EQUIPPING The away team

Fulfillment centers and DCs of the past resembled a scavenger hunt, as associates dispersed across the warehouse landscape in search of the next item to complete an order. The average warehouse worker walks approximately six miles in a typical day to fulfill orders, and 75 percent of an employee’s day is linked to order picking, according to research outlined in Robert Palevich’s book, The Lean Sustainable Supply Chain.

To combat the inefficiencies, today’s more advanced distribution facilities have adopted the “goods-to-person” concept as the industry standard.

Goods-to-person fulfillment strategies eliminate or minimize the “labrador retriever syndrome,” which requires an order picker to walk lengthy distances to retrieve orders in a distribution facility. Instead of a continuous stream of dispatched employees scattering to storage racks and bins throughout the DC to locate and pick orders, inventory in a goods-to-person platform is delivered to the picker/packer workstation via conveyor systems or robotic delivery modules.

“Today, SKUs are delivered to an ergonomically oriented workstation in a relatively confined area,” says Ken Ruehrdanz, warehouse and distribution market manager for Dematic. “Though the work area may be considered somewhat restrained, the station is set up with an ergonomic anti-fatigue mat because today’s order processor is more confined to one area vs. the old model of constant walking to pick an order.”

Additionally, conveyor heights and pick-to-light displays are built to levels best suited to enhance the employee’s productivity. “Bins and conveyors are set up in the operator’s ergonomic ‘golden zone’ to prevent excessive reaching, bending, or lifting,” he adds.

As supply chain professionals seek to fill the perfect order, progressive DCs are focused on order accuracy and speed to customer. Advanced materials management systems—such as conveyors, robotic pickers and packers, and auto-guided vehicles—all collectively yield more efficient fulfillment processes and order accuracy.

When it comes to easy-to-implement automation, pick-to-voice technology ranks high in the category of low capital investment and quick integration. Voice-directed picking offers increased efficiency, accuracy, and safety. Particularly advantageous to distributors with high SKU counts, pick-to-voice systems can be operational in less than one hour, based on their flat learning curve. The voice technology can be integrated with existing WMS software, leading to order accuracy of 99.9 percent.

“We’ve seen picking rates increase by as much as 35 percent compared to conventional systems,” notes Dematic’s Ruehrdanz.

An incorrect order pick can cost a typical DC an average of $67 per error, according to a recent Honeywell survey. Under the old model of labor-centric order picking, order quantities peaked at 2,000 to 3,000 per day. With advanced conveyor systems working side by side with voice-directed order fulfillment and pick-to-light systems, order efficiency is optimized and throughput can be as high as 5,000, depending on the industry vertical. “Order picking is where we’ve seen the most new automation lately,” says Counihan.


As the goods-to-person mantra gains momentum in fulfillment facilities, experts examine how outbound inventory flows from the warehouse rack to the pick station. Auto-guided vehicles hit the market in the early 2000s and have traditionally negotiated a DC’s landscape via electronic navigation grids in the warehouse floor.

Founded in 2003, Boston-based Kiva Systems was one of the first innovators in roving warehouse robotics. Based on the company’s early success, shipping giant Amazon purchased Kiva in 2012 to capture the emerging market for retrieval robotics in advanced warehouses. Other high-tech MH integrators have followed Kiva’s lead and have recently introduced similar robotic retrieval technologies.

Relatively new to the world of AGV technology is Ontario-based Clearpath Robotics. After three years of extensive research and design, Clearpath introduced its first self-guided robot named OTTO, designed specifically for rapid movement of materials, goods, and inventory.

Based on the premise that most freight is palletized, Clearpath’s logistics technology platform is a pallet-focused model. “According to our research, there are 2 billion pallets in play in North America alone, and 80 percent of all freight travels on a single pallet,” says Simon Drexler, director of material transport for Clearpath. “With that research in mind, we designed OTTO to carry up to 3,300 pounds—providing 10 to 15 percent more payload than self-guided robots.”

Amazon’s Kiva robot operates on a predetermined floor grid pattern, but OTTO’s intelligence allows it to “learn” the warehouse landscape without the aid of a floor-guided track system. “OTTOs work from a single global reference map, whether a user integrates one OTTO or 50 into a warehouse operation,” Drexler explains.

“OTTO’s operators enter points of interest, such as dock doors, aisles, zones, and picking stations,” Drexler says. “And OTTO’s intelligence is able to navigate around various reference points at a safe speed of 4.5 mph.

“Robots are designed to learn,” he adds. “The more a robot navigates a particular warehouse, the more familiar the robot becomes with the layout, as well as any potential hazards.”

Equally fascinating is the emergence of robotics designed for unloading, bin retrieval, and pallet stacking. Stationary robots with flexible arm implements are capable of performing a multitude of tasks, including unloading a trailerload of cartons, stacking pallets, and picking orders. These robotic functions are designed to take the place of warehouse tasks that laborers detest—jobs that fall under the 3 D’s category: dirty, dangerous, and difficult.

Robots used for carton stacking or order retrieval have a built-in 3D vision sensor to enable them to identify the carton size to retrieve in the stacking order of a pallet configuration. “The robot is programmed to place a larger box at the base of a pallet and smaller cartons on the top for optimal stacking,” states Clemons of Bastian.

Robotic applications are more adaptable in today’s modern DC due to the ability to modify the robot’s function to align with the user’s requirement. For example, the same advanced robot can unload cartons from an inbound trailer in the morning and transition to stacking boxes on a pallet in the afternoon—with only a basic arm adjustment.

In fact, Blue Ocean’s Mini-Picker is compatible with the market’s leading robotic manufacturers. The Mini-Picker’s robotic arm can be attached to a Universal, KUKA, or ABB robot as an accessory. As the name suggests, the Mini-Picker is designed to select smaller items, such as a single screw or bolt, and place the item in a bin, carton, or other shipping device.

The goal of robotic implementation is not to curtail job opportunities but to create a smart warehouse with advanced productivity and increased throughput. In fact, robots are designed to work in conjunction with the labor force. Repetitious warehouse tasks, such as unloading a floor-loaded trailer or container, are being assigned to robots and automated processes.

“As costs come down and robotic functions are perfected, we’ll see more robots working alongside warehouse employees to promote operational efficiencies,” predicts Tim DeRosett, CEO of Blue Ocean. “Robots are actually designed to collaborate with humans.”

Life support systems

While warehouse innovation and automation trends toward upgrades in order picking and advanced materials handling equipment, the question of the equipment’s useful life enters the equation. Most machinery, hardware, and MH equipment in the distribution sector has a projected lifespan of 20 years, according to Clemons.

However, technology applications will outrun the hardware systems in the foot race to obsolescence. The useful life of software systems in distribution applications will sustain only 25 percent of the projected lifespan of an automated hardware implementation—meaning that most software innovations will last approximately five years before new WMS/WCS technology is introduced to the marketplace.

While all these next-generation implementations sound enticing, what is the price tag for integrating the latest RFID technology, voice, conveyors, an upgraded WMS, or robotics? The better question may be: Can a user afford not to invest in warehouse hardware and software applications available in today’s arsenal of upgrades?

“What is the cost of doing nothing when it comes to upgrades in warehouse automation?” asks Bastian’s Clemons. “Status quo or sitting still equates to moving backwards.”

Capital costs of conveyor systems have dropped considerably since 2005—in an era when a complex conveyor installation might crest in excess of $10 million. When contemplating an investment in highly automated warehouse equipment, cost considerations should be a major factor in the rollout and implementation.

Robotic systems used in palletizing and case packing, for example, start at $150,000 and can easily surpass a seven-figure investment, depending on the number of machines and scale of the equipment. Despite the seemingly high costs, distribution and manufacturing companies can expect a payback within two to three years. “On high-level automation, some companies will concede to a four- to five-year payback,” according to Clemons.

As e-commerce DCs see order demand increase exponentially, automation and technology must keep up with the high throughput requirements. “E-fulfillment demand continues to increase 20 to 25 percent over the previous year,” notes Manhattan’s Lamphier.

While even the most progressive DCs are still evaluating various automation trends—such as robotics for loading/unloading and pallet stacking—AGVs and pick-to-light technology are more recognizable applications, particularly in fulfillment centers. Given the trends in warehouse automation, what can we expect in next-generation hardware and software developments?

Recently, the concept of utilizing drones inside a DC for goods-to-person applications was introduced. “This is still early stage technology,” comments Peter Counihan, chairman of Fortna. “Other warehouse innovations are gaining more traction. Customized 3D printing is a trend that will have a significant impact on the evolution of materials and the Internet of Things.”

Make it so

Who is leading the way in the warehouse automation revolution? Automation is trending most rapidly among certain industry verticals, but only in a limited number of global markets. In fact, according to the International Federation of Robots, 70 percent of total sales volume for robotic applications is taking place in the following five countries:

  1. China
  2. Japan
  3. United States
  4. South Korea
  5. Germany

Based on recent exponential growth rates in omni-channel e-tailing, fulfillment centers are preparing to meet market demand for same-day and next-day deliveries, particularly around the holidays.

An automated DC equates to a smart and efficient DC.

The Shining Benefits of Light Technology

Pick-to-light and put-to-light technologies offer these benefits:

  • Greater order accuracy
  • Lean operating systems
  • Greater order visibility
  • Short implementation learning curve
  • Optimized throughput


Stardate: The Future

Here are the top five next-gen warehouse automation applications:

  1. Goods-to-Person Automation
  2. Automated Palletizing/Case Packing
  3. Pick-to-Light/Put-to-Light Technology
  4. Robotic Picking/Retrieving Systems
  5. Voice-Activated Order Management/Wearables

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