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Robotics key to lockdown fulfilment strategies

07 January 2021

If the Covid-19 pandemic has taught the logistics industry anything it is the importance of staying flexible in the face of rapid – and unexpected - change. The pandemic has had a significant impact on supply chains throughout the country, stress-testing their resilience and in many instances pushing them to near breaking point.

In the early stages of the first lockdown in March 2020, the shortage of essential items such as food, pharmaceuticals and PPE, was common. The critical significance of this highlighted weaknesses in global supply chains to cope with unexpected surges in demand. The rapid increase in e-commerce further compounded the problem. 

As an indication of the rapid changes encountered during 2020, the surge in growth of e-commerce concentrated the equivalent of five years of expansion into the space of just six months. The Office for National Statistics (ONS) said that in January 2020, e-commerce accounted for 19% of all retail sales in the UK; by June this had reached 31%. Previous ONS estimates had suggested the UK would reach 25% by the end of 2023.

In addition, the ONS said that online penetration for food retailers remains above 10% - almost double pre-pandemic levels. Faced with such a massive spike in demand, all UK supermarkets have had to look at improving their online channels and because of this, their supply chains. 

But it is not just the food and beverage sector that has been tested, virtually any industry that relies on the movement of goods has had to review operations.

In the new normal, these problems are here to stay, and retailers in particular are likely to undergo significant changes, especially those looking to become omnichannel operations. 

"We expect that behavioural changes formed during lockdown are here to stay. At the same time, the supply of mid-sized logistics assets close to cities remains severely constrained.” 

The situation has been succinctly summed up by Richard Moffitt, CEO of logistics investor, Urban Logistics Real Estate Investment Trust. In the company’s interim results announcement in November 2020, Mr Moffitt said: "A rapid increase in e-commerce has tested supply chains this year (2020) due to the unexpected surge in demand. As a result, the logistics market continues to break all records, with the quarter to June 2020 seeing the largest take-up ever recorded.   

"We expect that behavioural changes formed during lockdown are here to stay. At the same time, the supply of mid-sized logistics assets close to cities remains severely constrained.” 

Urban Logistics, which has a £346m property portfolio, has tenants including Boots, the National Health Service, Travis Perkins, Booker, DHL, XPO and Sainsbury's. It said several structural and commercial factors currently supported attractive investment opportunities in the UK’s last mile/logistics real estate sub-sector. This is being driven by strong occupier demand, notably by the growth of e-commerce and investment by retailers in their associated supply chain, together with a decline in the availability of high- quality available space. 

It is clear therefore, that warehouse and fulfilment operations will need to stay flexible in the face of rapid changes in demand – and they will expect their suppliers to do likewise.

Even before the Covid-19 pandemic, retailers, e-commerce operations, 3PLs and others were beginning to recognise the benefits robotics and automation could deliver to their warehouses and fulfilment centres as they looked to cope with traditional peak demand, which effectively begins in the run up to Black Friday and then through to Christmas.

Prior to the pandemic, the growth pattern was relatively predictable, meaning businesses could plan for the changes in plenty of time and make sure their operations were robust enough to cope.

For most, dealing with the growth in orders during these periods means drafting in armies of temporary workers to deal with the extra picking needed. This is a satisfactory, but expensive and labour-intensive solution. Some forward-thinking business were already beginning to question whether there was a better way of doing things.

It was easy to see why. In addition to the expense of employing extra workers, operators were faced with an increasingly congested working environment, with up to three times as many people crowding into busy aisles. Factor in having to haul around over-burdened carts, then productivity stalled, and accident rates increased as teams struggled to meet cycle times.

The picking got done, but operational efficiency was restricted. Again, people in the logistics industry began to question how long this model was sustainable. 

The onset of the pandemic gave them the answer – not long.

With so many restrictions introduced to try and control the spread of Covid-19, traditional means of dealing with peak periods in the warehouse were instantly unviable, mainly due to the need for workers to socially distance.

No longer could hundreds, even thousands of additional workers be employed to deal with the rapidly growing demand for not just non-essential products but the everyday items, such as those for personal hygiene that would have been easily available had shops been open as normal. 

The requirement for fewer workers on the warehouse floor but with the need to maintain peak levels of productivity and maintain customer delivery expectations, was an unwelcome scenario.

The case for robotics

Warehouse operators must be prepared to deal with shortages in labour at peak periods due to market demand for workers, and in markets where the labour pool is small or in short supply due to peak demand – or workers having to self-isolate - then the cost of this commodity will inevitably rise. 

Competing with the Amazons of this world is difficult at the best of times and in the current climate is challenging to say the least. The onus is on fulfilment operations to wring maximum benefit from the resources they have. Factor the need to have workers socially distance themselves and the situation instantly becomes more challenging.

Therefore, making the workers you can have available far more productive is highly desirable. 

“Effective picking solutions such as the Autonomous Mobile Robot (AMR) system offered by Locus Robotics has helped businesses in the sector double their productivity without doubling their workforce,” said Denis Niezgoda, Vice President – Europe, Locus Robotics.

“Taking away the need for workers to haul heavy carts around the warehouse and have them located instead, close to their picking area, instantly cuts out hours of unproductive walking time on their part as the cobots convey picked items to the packing areas.” 

The data fed into the LocusBot programme will also upgrade efficiency by improving pick accuracy and minimising costly and time-consuming errors. 

“With picking operations having to rapidly adjust to fluctuating demand, the LocusBot system has been designed to be deployable within as little as four weeks and extra robots can be added to the fleet at any time, once the programme is integrated into the WMS."

But it is the scalability of the LocusBot solution that reaps big rewards for operators as the size of the robot fleet can be rapidly scaled up or down depending on demand, and with the bots being available through a Robots as a Service (RaaS) model, it is a very cost-effective option to the productivity challenge.

“With picking operations having to rapidly adjust to fluctuating demand, the LocusBot system has been designed to be deployable within as little as four weeks and extra robots can be added to the fleet at any time, once the programme is integrated into the Warehouse Management System. The extra robots can also be fully operational within a matter of minutes, rather than the hours – or even days – it could take to train up a human worker,” added Mr Niezgoda.

“The need to socially distance offers no challenge to the LocusBot and contact with existing workers is minimal. Likely as not, the only physical contact a worker will make with the robot during their shift is via the touch screen, which displays the order and product they need to pick. The robots will also be sanitised on a regular basis throughout any shift, so they are constantly safe.”

Locus has been successfully working with one leading UK retailer, which first faced productivity challenges ahead of the 2019 peak. It was keen to find an effective solution to the problem of matching customer delivery expectations with growing order volumes.

Despite the unproven nature of the technology to the UK market, the retailer weighed up the risk and opted to install the LocusBot system at its 240,000 sq ft fulfilment centre. It quickly saw productivity double as the effectiveness of the solution began to tell. Aside from negating the need for the usual number of temporary pickers, morale amongst its workforce blossomed as the workers quickly adapted to their new robot helpers. Absenteeism rates declined and accident rates fell by 77%.

The lessons learned from utilising the solution for the 2019 peak proved invaluable in March 2020 as the country was plunged into what turned out to be, a first lockdown. As order volumes escalated, with the need for essential goods to be dispatched to the millions of people forced to become housebound, the retailer scaled up its robot fleet. 

“The effectiveness of the LocusBot solution saw it manage a 172.4% increase in online orders – easily outstripping that seen during the 2019 peak – whilst maintaining customer delivery expectations,” said Mr Niezgoda.

“Through the effective deployment of the LocusBot solution, the retailer freed itself from the yoke of traditional peak restraints despite totally unexpected – and unprecedented – demands imposed by lockdown.”

If change is to remain a constant for the modern warehouse, then flexible and easily deployed solutions to dealing with peak demand will become the new normal. Operators will most likely become more demanding and the challenge for suppliers will be to step up and meet this challenge. Relationships will be tested, with only the most effective suppliers becoming trusted partners. Those reacting quickest, will ultimately be the ones to flourish.

For more information on the LocusBot solution, visit www.locusrobotics.com