Sunday, April 21, 2024

“Businesses Must Evaluate Whether The Automation Solution They Are Planning To Invest In Is What They Really Need”

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Leading logistics businesses in India are banking on automation to ramp up their productivity while reducing operational costs. As the presence of large-scale warehouses increase, the necessity of automation will too. Paromik Chakraborty of Electronics For You speaks with Vivekanand, country manager – India and SAARC, GreyOrange, to understand the appropriate use cases of automated solutions, such as Butler, an AI-powered pick-and-place robot, and automated sorters, where businesses can benefit and what consequent return on investment can they expect.

Q. Why should warehouses consider investing in automated solutions and how would they benefit from these?

A. Warehouses, especially the bigger ones, face some crucial business challenges during order fulfillment operations. The main challenge is faced by their employees who need to travel across large areas amidst a pool of goods to reach the items needed and bring them back to the consolidation zone. Warehouse employees lose a whopping 70 per cent time in just walking to collect the goods from the shelves, which is almost 5-6 work hours lost by each person unproductively.

Vivekanand, country manager – India and SAARC, GreyOrange

Automation solutions which provide goods-to-person technology slashes down this loss of time, improving the efficiency of operations and productivity consequently. Moreover, manual consolidation has chances of errors, which can result into eventual financial repercussions (like reverse logistics charges, re-shipping charges etc.) as well as a risk of brand reputation loss. These can be avoided with intelligent robotic solutions.

Q. How does AI-powered robots, like Butler, serve the operator? What is the source of their intelligence?

A. Butler is a robotic platform that enables goods-to-person operation. In a warehouse, the assigned person needs to locate items based on an order, place them in the correct consolidation area and consolidates the complete order before it is shipped out. Using a goods-to-person technology like Butler, the person does not need to move.

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The storage shelves, which are mobile, containing the goods, are brought to the picking station, in order to select and consolidate the necessary items in required quantities on-the-spot. Once an order is consolidated, the operator can confirm it, and the shelves are sent back to where it is optimised in the warehouse. Popular items get placed nearer to the picking area.

The technologies used are an amalgamation of robotics with ML and AI. The overall setup consists of the autonomous mobile robot (Butler), a mobile storage unit (MSU) where the goods are kept, an automated charging unit, a pick-put station (PPS) and the software platform called GreyMatter.

Besides automating the operations, the robots follow an intelligent ‘opportunistic’ charging technology, i.e., whenever they are a little low on charge and has no task assigned for a while, they go to charge themselves automatically. GreyMatter software is based on decision science, acting as the brain of the system.

Q. How much increase in CAPEX can businesses expect to undergo in these kinds of investment?

A. While talking about CAPEX, it is important to note that for any full-fledged automation solution, lots of parameters are needed to be looked into – e.g. the kind of applications, number of orders needed to be served, what kind of SKUs are involved and so on. So, before looking into the cost, businesses must evaluate whether the automation solution they are planning to invest in is what they really need in terms of results. It is crucial for businesses to first identify the automation solution fit for the job. Some use cases may need a pick-and-place robot while some other application may deem automated sorters to be the right choice. A typical estimation of the upfront investment for these kinds of automation solutions can start from $300,000-$400,000, depending on the scale of use one is looking for.

Q. How quickly can they recover these investments?

A. While investing in a new technology will be associated with a certain CAPEX, in return, it reduces the OPEX, which eventually recovers the investment and adds on to the benefits in the long run. Typically in the case of Butler, the ROI varies from 3 to 6 years, depending on geographies, use cases, scale of applications and the type of ROI, such as faster order-to-dispatch, accuracy and customer experience.

Q. In which applications do automated sorters fit in better?

A. Sorters are being used for two main applications – destination-based product sorting, and, order consolidation. It can be used by any industry which has these operations involved. The best use case of sorters will be for logistics companies who meet last mile deliveries.

For instance, imagine a situation where they need to sort 100,000 packages based on region of delivery. Manual arrangement becomes impossible and sorters become the most viable solution. Let’s take an example for the case of order consolidation. Assume a typical retail chain which has close to 1000 stores distributed across a geography. A particular warehouse wants to consolidate orders for all these stores. In that case, the warehouse can use the sorters to sort items based on the orders of these stores automatically and fulfil the orders in an error-free and timely manner.

Currently we have two types of sorters – the arm-based linear sorter and cross-belt sorter. The working principle of the linear sorter is that you put the goods in the sorter. It has a moving conveyor belt. Based on algorithm programmed with variable parameters corresponding to the package (e.g. destination, weight, size), which are part of the barcode on the items and is being scanned by the sorter, the machinery sorts those goods automatically.

The cross-belt or loop sorter does the similar thing, but with a much higher throughput capability. The linear sorter has limited throughput capacity, making it useful for comparatively lesser sorting requirements (e.g. 6000 sorts per hour). For higher throughput volume requirement (eg. For over 15,000 sorts per hour), the cross-belt sorter is the better choice.

Q. Can you share some case studies for your solutions?

A. In India, we have done many installations of the sorter and one deployment project for Butler. Abroad, both solutions have undergone multiple deployments.

The installation of Butler in India was done for the main distribution centers of an FMCG company. One of the biggest challenges over there was that during the put-away operation, operators had to manually identify which bins had space and place the items. Manual operations also delayed order deployment, causing higher order-to-delivery time. Moreover, they wanted to have a system to fulfill different kinds of orders simultaneously (e.g. Serving to a sub-distributor, retailer and end customer simultaneously). Butler followed a two phase deployment process. The first phase completely a few months back and the second phase is in progress. Using Butler, they have been able to substantially reduce delivery delays.

For the sorter, we receive orders mostly from revisiting customers – as with increasing volumes, they require more sortation centers. We have some of the leading delivery and logistics service providers around the country who are using our sorters.

Q. Why adoption of Butler has been comparatively slower in India?

A. In India, the general trend of technology adoption is a little slow, which becomes a challenge. Moreover, if you look at the usage of Butler, investing in it makes sense only when there is a lot of complexity in the business. The complexities may come for different reasons, e.g., the same warehouse serving through several channels, i.e., the omnichannel environment, or serving orders with very high SKUs. It can also be because of huge warehouses having very high throughput load.

Demo of Butler carrying mobile storage units

Indian warehouses are maturing, but they are yet to face all these complexities in full form. For instance, there is a lot of discussion and planning going on for developing the omnichannel ecosystem. Many players have already started exploring this model and they have recognised that omnichannel will become a dominating trend in future retail.

Moreover, when the GST was not in place, larger players had broken down their operations from multiple warehouses because of the state taxes. With the GST coming in, businesses have started merging their smaller warehouses into bigger boxes. We have data that shows a trend of about 50% of businesses on the verge of merging their operations into bigger warehouses. This will increase throughput volumes and SKUs, and drive the need for automation.

However, it won’t happen overnight, and so, the trend and demand will set in with time. A huge budget is foreseen to be invested in warehousing in the next three years. That will fuel the technology adoption.

Q. Are these meant for large businesses only or can SMEs leverage on these technologies too?

A. Every automation requires a certain business scale. While we know that modern SMEs are readily adopting technology, new processes and practices, however, they have to make sure they have sufficient scale of requirement. Having said that, we are seeing more and more players considering these solutions. Players whom we connected with a couple of years back but weren’t ready to invest in these technologies back then, are reaching out to us now, showing their interest in automation. The number of engagements have gone up – and this is a clear indication that the predictions are falling in place. The ecosystem is getting ready, and thus, now is the right time to move towards the transformation.

Q. What factors should decision-makers look into before finalising an investment?

A. For technologies which involve high value capex investments, just the product features are not sufficient. Businesses should look into factors like sustainability, scalability, complexity in maintenance, risk of obsolescence, after-sales support and some more.

Q. How do you ensure safety of human peers who will work with your robots?

A. Safety is a parameter of paramount importance and the design is made to make the products safe for customers as well as our engineers. In Butler, there are several levels of safety. Most significantly, if someone comes in front of Butler while it is moving, it senses the person and stops immediately. It has an ‘earthquake’ feature too, where it automatically stops operating when it senses an earthquake, to ensure the shelves do not topple. In our sorter, while there are different emergency switches, if someone falls on the conveyor, a cable can be pulled to stop the system.



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