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03 jan 2019

The dark side: lights-out logistics

A lights-out operation is usually associated with manufacturing. It’s happening now. Though still rare, it’s out there. For the uninitiated, lights-out manufacturing is the digitised, automated process that doesn’t involve any human intervention.

In other words, manufacturing that can take place in the dark. That’s the theory, anyway. The prevailing notion is that robots generate high productivity without all the ancillary costs associated with human workers.

But what about lights-out logistics? First, ‘lights out’ is really ‘mostly lights out.’ The aim of the logistics industry should be to maximise intelligent use of technology, from automation to data analytics.

Warehouses and distribution centres need to be flexible. Space is an issue, for instance. This is why a lot of warehouses and distribution centres build racking higher and unlock available vertical space. The use of automated systems is perfect for these situations. Instead of attempting to build a complete lights-out facility, it’s best to focus on areas best suited to ‘dark’ automation, such as material handling tasks.

Let’s talk about automation

Automation is common in warehouses to varying degrees. Just look at Amazon, who now has more than 100,000 robots working around the world. The retail giant also employs 125,000 warehouse workers, so humans are still part of the equation. At this moment in time, we are on the path to lights-out operation in certain zones of a business.

Here’s a look at some of the technologies that are moving us in that direction.

Sensor technology

The growth in sensor technology has made warehouse automation possible, with ultrasonic and visual sensors that guide robots. Remember those 100,000 robots that Amazon utilises?

They bought Kiva Robotics in 2012 for $775m and took it inhouse. These robots, and similar systems, sense the environment. It’s the same system as ultrasound sensors used in automotive parking.

One technology, called lidar, uses a combination of light and radar to generate a three-dimensional image of an object. It uses reflections from lasers to navigate and avoid obstacles.

Robotics

The robots that use lidar are often palletizers and depalletizers, which have advanced since first appearing on the scene. Before, they were stationary; now they’re mobile. Some robotic palletizers and depalletizers are guided digitally by a warehouse management system (WMS) or warehouse execution system (WES). These robots can load and unload objects, reducing the risk of injuries to humans.

Self-driving forklifts

When you need extremely heavy loads lifted, transported and unloaded, self-driving forklifts are the go-to technology. These end-to-end autonomous solutions maximise operations by eliminating the need for humans on certain tasks.

Are these technologies enough?

Sophisticated automated equipment, such as self-driving forklifts, vision-guided robots, automated storage and retrieval systems (AS/RS), robotic palletisers, and high-speed conveyors, are making a difference.

In material handling environments such as warehouses or distribution centres, these systems can deliver speed and precision – and thus, efficiency. This is why you can order a toothbrush in the morning from Amazon, and have it by the evening, before you brush your teeth and go to bed.

What about the money?

The fact that we don’t really have true lights-out warehouses and distribution centres comes down to several factors. First, it requires a connected facility, which has to be designed for lights-out operations. The large up-front cost for equipment and the knowledge and expertise required can’t be acquired overnight.

Workers are more expensive in the long run, but those costs are paid out incrementally. Automation is an upfront investment, and one that doesn’t necessarily gel with a focus on keeping costs down. This is one reason it’s smart to focus on lights-out operations in specific areas of a warehouse or distribution centre.

When it doesn’t work

Last year, Industry Week told the story of an industrial distributor who invested $3m (U.S.) in automation. Industry Week pointed out:

“Performance and reliability were so poor that the system was abandoned at a significant loss. In hindsight, this would have been a really bad investment even if it had worked perfectly. Prior to the automation, there were 20 warehouse workers with annual wages and benefits totalling $600,000. Assuming that the automation enabled the workforce to be cut in half for a saving of $300,000 per year, the five-year return on investment would still have been minus 19%.”

Industry Week doesn’t tell us why the venture failed, but the point is that automation won’t solve all of your problems if it’s not approached and implemented in the right way – and if you lack a digital culture.

The digital culture

If you don’t have a digital culture, there’s no point in going forward. Your people need to be trained in all things digital. In a 2016 report by PricewaterhouseCoopers, a survey among transportation and logistics companies found that 50% of companies lack the necessary digital culture and staff training, making it the biggest challenge facing the industry.

Embrace digital, and it’ll embrace you right back.

The role of data analytics

Data analytics can tell you everything about your business, on the road and off, providing you with operational financial and performance data. For example, what if you held the data on your customers’ activity? You could provide better service and strengthen your relationship, optimising your profitability. You can identify cost savings and operational efficiencies.

Armed with all this information informs your business strategy and highlights your strengths and weaknesses so that you can make smarter decisions.

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