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ASCM Insights

The Next Frontier for Robots: Picking

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Warehouse automation systems have been around for a long time, but one task has eluded robots: picking. But that is about to change. The Wall Street Journal reports that robot developers, spurred by the growth in e-commerce, are working on robot systems that can retrieve items off shelves and pack them for shipping.

“Several companies, including Saks Fifth Avenue owner Hudson’s Bay Co. and Chinese online-retail giant JD.com Inc., have recently begun testing robotic ‘pickers’ in their distribution centers,” Brian Baskin writes. “Some robotics companies say their machines can move gadgets, toys and consumer products 50 percent faster than human workers.” 

An enormous growth in online sales is making it hard for retailers and logistics companies to meet demand. The newspaper reports U.S. e-commerce revenues equaled $390 billion in 2016, which is twice as much as it was in 2011, according to the U.S. Census Bureau. In developing countries, such as China and India, online sales are growing even faster.

Relatedly, employment in this sector also is growing exponentially. According to the U.S. Department of Labor, 262,000 warehouse jobs were added throughout the last five years. The segment now employs almost 950,000 workers.

“Picking is the biggest labor cost in most e-commerce distribution centers, and among the least automated,” Baskin writes. He cites Marc Wulfraat, president of MWPVL International, who suggests that replacing workers with robots could decrease labor costs by one-fifth. However, because of the high level of e-commerce demand, experts don’t expect picking robots to cause massive layoffs.

Although the task of picking seems simple, robots need to be taught to properly identify each product. This involves compiling enormous databases of 3D-rendered objects that guide robots in finding and properly gripping the needed items. Well-known automation companies, such as KUKA and Honeywell’s Intelligrated unit, and even some non-traditional players are working to advance technology to help robots achieve this skill.

One example comes from JD.com, which is developing its own robots. In April, the e-commerce giant started testing them at one distribution center in Shanghai, where it aims to implement a fully automated warehouse by the end of 2018, says Hui Cheng, JD.com’s head of robotics research center, in the article.

Getting it right

The phenomenal growth in e-commerce has changed warehousing and distribution forever. This Wall Street Journal article focuses on only one aspect, picking, but it demonstrates the evolution of supply chain. Let’s consider one definition of picking from the APICS Dictionary: “In distribution, the process of withdrawing goods from stock to ship to a distribution warehouse or to a customer.” 

As The Wall Street Journal article outlines, picking technology could strongly benefit e-commerce companies, especially as the segment continues to grow in terms of volume and capabilities.

We at APICS are thrilled to be partnering with JD.com, China’s largest e-commerce company by revenue and one of the leaders mentioned in the article. APICS and JD.com have announced a strategic agreement to establish nationwide standards for the Omni Channel Supply Chain Capability in China and to advance e-commerce supply chain performance in the region. Part of the agreement includes a collaboration cross-referencing the Supply Chain Operations Reference (SCOR) model with the extensive JD.com database in order to develop a specific SCORmark Omni Channel Benchmark for China.

To learn more about how APICS and SCOR might help your business, visit apics.org/apics-for-business.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted at abe@ascm.org.

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