Look at the warehouse automation sector and one will find it is a mixture of automation and manual/mechanised handling. The reasons for this include the high cost of full automation, the shortage of available funds, perceived inflexibility and the risk fears, especially what might happen when business conditions change for various reasons, like the impact of disruptive technologies and smarter competitor’s business models.
Another fear factor was the risk from poorly thought through automation schemes, resulting in embarrassing results like empty shop shelves, but choosing from among the big automation houses, with their own software expertise and good track record of installations, has left this a rare risk problem.
Over time some of these automation investment fears have lessened. The fact is, scaleable modularity has lessened the inflexibility fear but there is one risk fear that has grown and that is the fear of doing nothing because the business-to-consumer landscape has changed dramatically since the turn of the century as e-commerce changes the face of logistics that can only be reasonably served by a move to greater, if not full automation.
An interesting take on this is a new White Paper from logistics automation specialist, Swisslog, which suggests that making small, incremental improvements instead of investing in larger enhancements, may dilute the ROI and the ability to apply larger improvements needed for continual business growth. It is, Swisslog suggests, the Kaizen Paradox, where what might be needed is to replace the steady incremental improvement of Kaizen with Kaikuka, a Japanese word for describing a radical transformation or a great leap forward. It is an attitude Toyota uses in its production system and said to be often overlooked by businesses more fixated to embrace Kaizen.
Fortunately, Industry 4.0 should lessen the risk of big automation failures because it offers many tools to enable businesses to model and predict solution outcomes accurately. It allows, for example, the use of new virtual reality tools that make it possible to build an automated solution in cyberspace and tour it, illustrating the effectiveness of the solution before it is bought. While it is acknowledged that all the leading warehouse automation companies should deliver a workable scheme achieving the benchmarks set for it that does not mean it will always be the best solution for one’s specific needs, and this is why it is so important to keep up with developments through the logistics trade press.
The Ocado Group that specialises in on-line food deliveries to consumers found this to be the case when they could not find an automation specialist to fill their needs and so they created their own equipment based on an air traffic control system and AI controlling hundreds of robots working over a grid of thousands of crates filled with groceries. The items are plucked from overhead and then delivered to workers who pick the items into red plastic boxes for customer deliveries. Ocado sees itself now as more of a technology provider than a food deliverer. It is this kind of automation that changing market conditions like e-commerce is driving and which will raise the profile of taking a Kaikaku step rather than a kaizen one.
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