The rise of the automated supply chain

Automation has the potential to be a real game-changer in the supply chain industry. New wave robotics, cloud computing and IoT (Internet of Things) are paving a new way forward. But is automation for every supply chain business?

Automation has certainly paid off for Catch of the Day, one of Australia's eCommerce success stories. The company, which packs over 10,000 orders a day, recently invested in an automated storage and retrieval system called AutoStore – and it hasn't looked back.

"Before we automated, we had 60 pickers walking six or seven kilometres every day to pick up to 6,000 orders across 2,000 products. Our floor-replenishment and pick-to-zero model couldn't cope as we increased products and automation was the only way forward," says Jon Northorpe, Head of Logistics, Catch of the Day.

"Since automating, we have just four people picking and they are covering a lot less ground. Instead, our robots retrieve the goods, the pickers pick and a team of packers pack. We now pick 10,000 orders across up to 9,000 products with a significant change in labour costs and a halving in order cycle time. We now have the ability to get more products to customers in a much shorter timeframe."

Watch video of Catch of the Day warehouse in action

Catch of the Day is a great example of how an automated supply chain can be integrated with elements of human intelligence to process and deliver orders faster and more accurately. And the result? Faster deliveries and happier customers.

But it's not just about getting products to customers faster. If you invest in automating various functions or operations in your warehouse – for example, retrieval picking, sorting or palletising – you can realise benefits both within the four walls of the space and beyond to your supply chain. You may experience:

  • Improved labour efficiency
  • Improved demand forecasting to better manage inventory
  • Transport efficiencies
  • Better response to store requests

"If you have reached the point where your pickers are tripping over each other trying to find products, put away and get more picks out the door, it can end up in a big and costly mess," says David Keevill, StarTrack's national 3PL operations manager.

"In these circumstances, you've got less productivity than something that is clean and automated. It's all about increasing throughput without increasing labour costs. Automation does this while reducing the cost per item."

How automated do you go?

Every company has different needs, and there are a huge range of options out there for different-sized operations. Clearly, Catch of the Day has the turnover to justify the significant investment they've made in automation. There are other options for smaller supply chains.

For example, Hitachi has launched a robot that has two arms for picking objects of different sizes, which could present a more affordable entry into the automated environment.

Google Glass is being used for 'vision picking' in the US, helping warehouse staff find the most direct route to a pallet or product in a large warehouse, to reduce pick and pack times.

"We are currently looking at vertical lift technology to condense storage space. It gives you a lift of 9.3 metres and reduces the warehouse size from 200m2 of racking to just 14m2. You've got one operator, instead of two or three people doing picks from such a vast area," says Keevill.

Moving away from the classic icon of automation, the robot, there are other ways that you can automate your supply chain. Look at the Internet of Things (IoT), where objects are able to communicate with other devices. Already, most warehouse and supply chain environments make use of innovations like RFID – which combines with wearables and scanners to create a more accurate, streamlined supply chain environment.

A recent article predicts that industrial warehouses will explode in the next three years, reaching up to 200,000 square metres in size. And, "to cope with the sheer size of these sheds robots will be used extensively.

"We are moving faster and faster towards an automated future.

Yet automation doesn't have to mean full robotics and the elimination of human input. Rather, it's about being smart about how you integrate technology into your supply chain organisation. It's about identifying the tools that will achieve operational cost savings; or those that will get products out to customers faster.