There have been vast improvements in robotic technology in recent years, with more and more retailers turning to expensive and advanced tech to boost efficiency and reduce overall costs
Automation in the supply chain is not new – but robots are now being used extensively by certain retailers.
Over 3 million industrial robots are in use across various industries today and the robotics market is set to be worth $218bn (£173bn) by 2030 as more industries look to adopt them, according to GlobalData.
GlobalData thematic intelligence analyst Shabnam Pervez says retailers are turning to digitalisation and automation to “address supply chain challenges” such as stock issues.
“Autonomous robots can navigate shop floors and warehouses while surveying stock levels,” she says.
“Sophisticated robots can scan products and identify stock issues much faster than humans. By diminishing stock issues, retailers can become far more efficient and cut costs.”
It’s not just surveying stock levels that robots are useful for. Stuart Higgins, partner at technology consultancy firm BearingPoint, says the key opportunity areas for robotics include optimising warehouse space, reducing dependence on manual processes, and allowing real-time tracking and traceability in the supply chain.
But with the implementation of robots coming with a hefty price tag, is the use of robotics an option for every retailer?
Money, money, money
Amazon has been at the forefront of robotics implementation for over a decade and it recently started trialling the use of a robot called Digit, a 5’9” humanoid robot that works alongside staff to grab and move products.
Ocado has opened a new automated warehouse in Luton showcasing its 550-series robots and 22 proprietary robotic arms, with ambitions to grow to 42 arms in due course.
Although Amazon and Ocado have been paving the way for robotics in retail, businesses across the industry have increasingly been investing in automation. Currys invested in robotic exoskeleton suits last year to prevent injuries for warehouse staff carrying heavy items, while the Co-op has been making customer deliveries via autonomous robots.
It’s not just the large retailers that should think about investing in robots. Wincanton product director for automation and robotics Scott Merrick believes every retailer should consider it.
“Everybody should have a look but they shouldn’t treat it as being a big, all-encompassing solution that is going to automate absolutely everything,” he says.
“It might be that you’ve got particular activity in the warehouse somewhere that a small six-axis robotic arm could automate that for you.
“But undoubtedly, to get the best out of them, you need volume. The more volume you’ve got, the better you can do.”
While automation brings several benefits to retailers, not every business has the resources or the capacity to invest in high-level tech such as robots.
Higgins says, in an economically challenging environment, it is increasingly tough for retailers to have the cash to invest and a thorough cost-benefit analysis should be conducted to assess direct costs and potential strategic and competitive advantages.
“Implementing robotics requires a significant upfront investment, which may be a barrier for smaller retailers or those facing financial constraints,” says Higgins.
“The return on investment for automation initiatives may take time to realize, and some retailers may face challenges in demonstrating the immediate financial benefits.”
Even though robotics is costly and it can take time to see the financial benefits, Pervez says the “general costs” of these technologies are coming down and there are several factors that contribute to overall cost savings.
“Automation means there should be a reduction of errors as robotics are less prone to errors than humans, which can reduce costs and improve quality,” she says.
“Increased efficiency of robots is another cost-saving benefit as it enables more quick and accurate output than humans, which can lead to increased sales and profitability.”
Alternative solutions
It isn’t just retailers that should choose to invest in robotics as they can look to third-party logistics (3PL) partners to help.
“As a 3PL, we want to invest in our customers’ supply chains,” Merrick says.
“We’re in a position where we can make those investments and show customers the value, so there are partners out there who can help.”
There are still a large number of retailers that have not started investing in robotics but there are other ways to boost efficiency in the supply chain.
Higgins believes “robotics as a service” (RaaS) can benefit retailers, along with an array of other technologies.
“Robotics rental models can enable businesses to deploy solutions with very low levels of upfront investment,” he says.
“Implementing warehouse management systems can also optimise inventory tracking, order picking and shipping processes – even without sophisticated robotics.”
He also suggests RFID technology, collaborative planning, forecasting and replenishment, route optimisation software and last-mile delivery solutions as alternative options for elevating operations.
So while large retailers like Amazon continue to develop highly skilled, expensive robotics, smaller retailers with less to spend can find more affordable means of automation and solutions for improving supply chain efficiency.
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