Key to Logistics Efficiency is Automation

Vineet Baid Points out how automation can change the face of logistics in the country

Logistics sector is poised for rapid growth in India. The ecommerce logistics segment alone is slated to become a USD 2 billion industry in the next three years. Currently India spends 14% of its GDP on logistics and transportation as compared to around 8% spent by developed nations. While a part of it can be attributed to poor infrastructure availability and difficult regulatory procedures, but there is also a huge difference in embracing and adoption of technology and automation between these types of economies.

 

How automation is the key to logistics efficiency?

Let us take warehousing as an example. Perhaps the simplest way to achieve warehouse efficiency is process automation. We are fundamentally working with the intention to eliminate or limit to a greater extent, the use of human labor and inputs. One small change in the direction of automation, holds the potential of reducing costs, dependence on labor and also, making the shipping process quick and accurate, regardless of the volume of shipments being processed.

For instance, consider space utilization in a warehouse and possibilities with weight and volume visibility of Stock Keeping Unit ( SKUs). One can optimize the space utilization in the warehouse by mapping the SKU volumes and storage unit volumes in the system. Both, hardware technology to capture weight and dimension at a fast pace and software technology to optimize the storage space are available in the market. The same SKU volume can be used for intelligent packaging recommendation at the time of order processing. SKU weight based tolerance checks at the time of outbound can help prevent wrong shipping. In essence, simple automation helped save space and manpower costs, reduce errors, improve customer satisfaction.

Robots or robotics is a more fancy term, probably a bit intimidating. Let’s just say that smart software deployed on capable hardware can help drastically reduce the manpower required for performing repetitive tasks like sorting, weighing, dimensioning, barcoding, counting, placing, picking, packing and more. For the purpose of understanding, while a trained human can probably sort at a maximum speed of 600 pieces an hour to 16 sort points, a sorter can sort at 7000 pieces an hour to as many sort points as desired.


Further value is offered by the introduction of Internet of Things (IoT) and wearable tech in the economy today. For instance, utilizing the commercial telematics in trucking fleets to boost efficiency is one example. Furthermore, warehouse managers can have greater visibility with the latest IoT devices, along with radio-frequency identification and sensors. Wearable tech makes it easier for the workers to move out and about and carry out important tasks, without having to stay chained to their workstations.

Lids, the renowned athletic sportswear company, offers impressive insights in the domain. Following the deployment of IoT enabled robotic carts taking care of picking, placing and delivering products between specific stops of the process chain, Lids has been able to make the processes efficient and optimally utilize the available capital and human resources. The trend however, was initiated by the global ecommerce giant, Amazon, deploying robots in the beginning, to move shelves. The company today has over 30,000 Kiva Robots, only testifying the success of automation in making the warehouses efficient and successful.

Approaching Automation & Cost Considerations

There is no denying the cost attached to automation. Hence, warehouse owners and managers need to perform extensive feasibility studies, in order to be sure if making the move is worth it. Going by the book, the cost of human labor for two years should be double the cost of automating the warehouse today. If somehow, the cost of two years of manual labor turns out to be less expensive than the current automation, the warehouse is in no dire need of automation.

However, as against the popular belief, automation needn’t necessarily cost a bomb to the warehouses. Earlier there were only international players offering solutions in this area, now there are some companies based out of India who are providing reliable solutions at very competitive pricing.

 

Much to Gain

The general consensus amongst the companies that have deployed automation and latest technology has been of increased accuracy in shipments and significant reduction in labor costs. They have further been able to provide greater visibility to customers, letting them track the orders on demand, further solidifying the relationship.

(The author is Chief Executive officer, Falcon Autotech)
Note: Article was Originally Published in Cargo & Logistics September – October 2016 Issue