Leading logistics businesses in India are banking on automation to ramp up their productivity while reducing operational costs. Paromik Chakraborty of Electronics For You speaks with Vivekanand, country manager – India and SAARC, GreyOrange, to understand the appropriate use case of automated solutions.
Q. What warehouse challenges can goods-to-person automation address?
A. Big warehouses face crucial business challenges during order fulfillment operations. The main challenge is faced by the employees who need to travel across the large area amidst a pool of goods to reach the items needed and bring these back to the consolidation zone.
The employees lose a whopping 70 per cent time in just walking to collect the goods from the shelves. This is almost five to six work hours lost by each person unproductively each day.
Automation solutions that provide goods-to-person technology cut down loss of time, consequently improving productivity and efficiency of operations. Moreover, manual consolidation has high chances of errors, which can have financial repercussions (like reverse logistics charges, re-shipping charges and the like) as well as pose a risk to brand reliability. These issues can be avoided with intelligent robotic solutions.
Q. How do artificial intelligence (AI)-powered solutions, like Butler, serve the operator?
A. Butler is a robotic platform that enables goods-to-person operation. In a warehouse, the assigned person has to locate items based on an order, place these in the correct consolidation area and consolidate the complete order before it is shipped out. Using this technology, the person does not need to move.
Storage shelves, which are mobile and contain the goods, are brought to the picking station to select and consolidate the necessary items in required quantities on-the-spot. Once an order is consolidated, the operator confirms it, and shelves are sent back to where these are optimised in the warehouse. Popular items get placed closer to the picking area.
Q. What are the underlying technologies used for such solutions?
A. Technologies used are an amalgamation of robotics with machine learning and AI. For example, Butler’s overall setup consists of the autonomous mobile robot (Butler), a mobile storage unit where goods are kept, an automated charging unit, a pick-put station and the software platform called GreyMatter.
Besides automating operations, robots follow an intelligent and opportunistic charging technology, that is, whenever they are a little low on charge and have no task assigned for a while, they go to charge themselves automatically. GreyMatter software is based on decision science, acting as the brain of the system.
Q. How much increase in capex can businesses expect to undergo in these kinds of investments?
A. Before looking at capex, for any full-fledged automation solution, many other parameters are needed to be looked at. These include kind of applications, number of orders needed to be served, kind of SKUs that are involved and so on. Hence, more than cost, it is important to evaluate whether the solution a business is planning to invest in is what it really needs in terms of results.
Having said that, a typical estimation of the upfront investment for such automation solutions can start from US$ 300,000 to US$ 400,000, depending on the scale of use. Businesses should look at solution features like sustainability, scalability, complexity in maintenance, risk of obsolescence, after-sales support and the like.
Q. How quickly can they recover these investments?
A. Typically, as in the case of Butler, the ROI varies from three to six years, depending on geographies, use cases, scale of applications and type of ROI involved, such as faster order-to-dispatch, accuracy and customer experience.
Q. Why has the adoption of these technologies been slower in India as compared to the rest of the world?
A. In India, the general technology adoption is a little slow, which is a challenge. Moreover, investing in a platform like Butler makes sense only when there is a lot of complexity in the business. Complexities may come for different reasons. It could be the same warehouse serving through several channels, that is, the omnichannel environment, or serving orders with very high SKUs, or because of huge warehouses having very high throughput load.
Indian warehouses are maturing, but they are yet to face all these complexities in full form. For instance, many players have already started exploring the omnichannel model. They have recognised that it will become a dominating trend in future retail.
Moreover, when GST was not in place, larger players had broken down their operations into multiple warehouses because of state taxes. With GST coming in, businesses have started merging their smaller warehouses into bigger ones. We have data that shows a trend of about 50 per cent of businesses on the verge of merging their operations into bigger warehouses. This will increase throughput volumes and SKUs, and drive the demand for automated technologies.
However, this will not happen overnight. The trend and demand will set in with time.
Q. Can SMBs leverage on these technologies, too?
A. Every automation requires a certain business scale. SMBs have to make sure they have sufficient scale of requirement. Having said that, we are seeing more and more players considering these solutions. Players whom we connected with a couple of years ago, but who were not ready to invest in these technologies back then, are reaching out to us now, showing interest in automation.
Q. How do you ensure the safety of human peers who work with robots?
A. Safety is of paramount importance. In Butler, there are several levels of safety. For instance, if someone comes in front of Butler while it is moving, it senses the person and stops immediately. It also has an earthquake feature, using which it automatically stops operating when it senses an earthquake—to ensure the shelves do not topple.