The history of automation is a long story of using technology to minimise human input. It’s a way of getting more reward for less human effort. You could argue that the invention of the wheel was the moment when we began to automate logistics. Fast-forward 6,000 years and we’re developing ever more sophisticated robots to carry out any number of tasks that humans might find too hard, too dangerous or even just too boring (the word ‘robot’ is Czech for drudgery!).
This month marks a whole decade, since Amazon bought Kiva Systems in March 2012 in a huge deal worth $775 million. At the time, Kiva was perhaps the most advanced warehouse robotics business in the world; and even though it was less than 20 years old, Amazon was already an international titan, with annual profits of $12billion. Over the next couple of years, those profits tripled as Amazon withdrew support from Kiva’s legacy customers, ultimately making their robotics company an entirely in-house operation. For Amazon, this technology was perceived as a key aspect of their competitive advantage. In the UK, Ocado has taken a similarly proprietary approach to protecting the intellectual property of its robotic innovations.
Far from stifling the market, the Kiva acquisition demonstrated the growth potential for warehouse automation. Established companies expanded into robotics and tech-savvy entrepreneurs from across the globe created profitable start-ups too. In the past two years, six robotics companies have joined the UK Warehousing Association, with more on the horizon. That’s no surprise, when you consider that warehousing is already a leading sector for the adoption of robotics and one of the fields where most growth is predicted. Discussions about recruitment troubles are nothing new in our industry, but now some analysts are saying the worsening labour crisis heralds the rise of the robots. There’s certainly evidence of that, in retail businesses from Asda to Zara.
But does it apply to the whole UK warehousing sector? DHL estimates 80% of warehouses are “still manually operated with no supporting automation”. Not all goods are fast-moving and not all warehouse tasks are repeatable. For 3PLs in particular, there are good reasons for diversifying business risk by operating shared-user facilities. Customer contracts are rarely more than three years long and conventional warehouses – with low or no automation – are flexible enough to accommodate a sharp switch from handling carpets to carburettors, for example. Reconfiguring the space is not difficult, and there is a belief at least, that people can be retrained for a new customer, more easily than robots can be redeployed.
So the University of Bath is researching this area, with UKWA’s support, to understand more about the barriers to adoption of warehouse automation. Please do contact me if you can help with this study. Robots need not apply!
Clare Bottle
UKWA, CEO
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