Many have written about the impact that Industry 4.0 will have on warehousing and distribution and why companies should embrace this fourth industrial revolution. But if you own or operate a small warehouse or distribution centre, you may be thinking: “How will Industry 4.0 help me?” or: “Isn’t this only for big companies?”
Yet many of the benefits of I4.0 will extend to small operations.
I4.0 includes technologies like the Internet of Things (machines talking to machines), big data, artificial intelligence, machine learning, as well as collaborative robotics. And there are five very strong reasons why they will make automation a worthwhile investment for even smaller warehouse operations.
- True plug & play
Traditionally, automated material handling systems required a significant amount of project-specific engineering, control coding and software. Conveyor systems, for example, often need specific PLC code to optimise behaviour, such as priorities at a merging point. These ‘traffic rules’ are different for each layout and also depend on the user’s exact processes.
The costs of customising, installing and commissioning a system do not have a linear relationship to size. While the overhead may be a small proportion for large systems, on smaller systems those costs could represent up to 40% of the total installation.
By combining IoT principles with artificial intelligence and machine learning, this problem can be overcome. Imagine that you will simply place conveyor elements (or any other automated equipment) on the floor. Each element will automatically identify itself to all others and ‘connect’ to its neighbours, allowing the system to map itself and understand how it looks.
“All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems.”
Meanwhile, applying big data analytics to the current, still manual operation will provide an understanding of the warehouse user processes. This allows the establishment of a first, base-line logic for running the new automated system. Once the physical automated systems are placed and used, machine learning will quickly determine how to use the equipment better and set the right traffic rules to match the system’s layout and user processes.
All this means that no more project-specific coding of controls and software will be required, significantly reducing the overhead costs to a level where automation becomes compelling for small operations.
- Smart systems can adapt to warehouses built for humans
Most warehouses, and certainly small ones, have been designed to be operated by humans. They have rows of shelving and people with trolleys walking through them to collect orders. Until recently, implementing automation would require these processes to be completely replaced.
Automated systems, such as robots, used to require a very clearly defined environment that was free of unexpected interruptions. And whilst a manual warehouse may look very organised, there are many small deviations that are easy for people to deal with; just imagine a larger product overhanging a few centimetres into the next storage location, or a worker leaving their trolley in the aisle for a few minutes to use the restroom.
Changing a warehouse like that is a big step that could easily cause disruptions and risk. Yet a new generation of collaborative robots is emerging. These robots are not only safe to work alongside humans, but also use advanced sensors and artificial intelligence to adapt to changing circumstances.
Now companies can simply deploy one or two collaborative robots within their current operation. Humans can work alongside the robots, eliminating the need for drastic changes to the warehouse or the processes.
Over time, more robots can be added to gradually increase the level of automation.
- Small companies don’t want to stay small
Many of the small companies in the field of logistics plan to grow, sometimes very quickly. Most early-stage e-commerce companies have big ambitions, but exactly how fast, or in what direction they will develop is uncertain. This means any automation will need to be flexible so the company can start small, but scale fast when growing.
New technology such as autonomous mobile robots are perfect for this scenario. You can start with only a few. Due to peer-to-peer communication and intelligent software these vehicles are easy to implement, providing payback even in small numbers. Still, when the time comes to expand, this is as easy as buying (or leasing) more vehicles, placing them in your warehouse and powering them up.
The new vehicles will identify themselves to the existing ones and the entire fleet will adapt and optimise itself to make best use of the new robot-colleagues.
Another example of easily designing for growth is the Hasbro distribution centre in Preston operated by Toll. The modular sorter and conveyor are easy to expand as the need for product picking and despatch grow. In the meantime, the operation benefits from reduced costs and can handle more retail fulfilment cartons than you would expect from a traditional style warehouse.
- Smart distribution networks will help keep warehouses small
This may seem contradictory to the previous point, and indeed it applies to a different group of companies. E-commerce is pushing the boundaries of delivery times. Same-day delivery is increasingly an expectation and offered by many companies in larger population areas. By default, this requires products to be stored close to consumers in areas where there is often little space to build a warehouse.
To help keep warehouses small and still keep service levels high, Industry 4.0-related science is being used. Predictive shipping is one example, where goods will be shipped from a central warehouse to a smaller urban warehouse even before you order it. This concept relies on big data to understand and accurately predict customer behaviour.
The other method is distributed order fulfilment. A specific product may be available within the customer’s area at any number of locations. These locations could be the seller’s urban warehouses, a third party warehouse, a store, or even awaiting pick-up at the home of a customer who wants to return it. By connecting all these sources in a real-time network, the most efficient source location for the product can be found. Again, big data and artificial intelligence will manage the complexity of this process, while blockchain technology will allow secure transfer of data and money between potentially competing providers.
- Small companies are entrepreneurial – but may have limited cash
Investing in automation requires a long-term vision, combined with an entrepreneurial approach. This is even more true when investing in new, ground-breaking technologies. This mindset is often found at small-to-medium size companies or founder-owned companies. Decision processes can be shorter, which can make it easier to realise a vision. This is why small start-ups are often at the forefront of adopting new technology.
Cash may be a challenge, and investing in automation typically requires serious capital investment. But here new technology may also help.
Traditional automated systems have been highly customised and demanding to install, remove or change. Uncertainty about the company’s future, linked to an asset with very little value outside of that company, will lead to expensive financing.
‘Plug & play’, self-learning and high flexibility also implies that it will be just as easy to re-use equipment somewhere else. This re-use capability will reduce financing risk, making it less expensive. It will also support different models such as rental or leasing.
All of these observations show that the real growth in warehouse automation will not only be with traditional, large systems. While those systems will always be there and also become infinitely smarter, they will be fewer in quantity compared to the thousands of small warehouses that have historically been too small to automate.
With Industry 4.0, size will not matter anymore.
Tom Rentschler is head of marketing for Swisslog WDS Americas. For more information visit www.swisslog.com.
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