Supply Chains Must Evolve

Companies that do not consider the next-generation requirements of our digital society into their distribution and logistics networks will find themselves struggling to match supply with demand. The last decade has seen supply chains continually evolve, with distribution companies keen to integrate cutting-edge technology into their working practices.

The impact of predictive analytics and inventory optimization, for example, has allowed eCommerce to flourish, but a recent survey of 1,116 supply chain professionals highlights the fact that robotics and automation are a priority in terms of supply chain innovation. In fact, customer demands on the supply chain have forced companies to think about how best to provide faster and more efficient distribution methods, with the distribution center itself considered to be ground zero.

“Today’s supply chains do much more than just physically move materials and product from place to place,” the authors of the report wrote. “In an increasingly digital world, supply chains are the backbone of an information ecosystem in which a connected and carefully coordinated set of movements and actions must be tracked at every level in order to maximize efficiency and meet customer demands for increased flexibility, visibility, and transparency.”

Robotics and Automation Will Become the Norm 

According to the 2018 MHI Annual Industry Report, 65 percent of decision makers at distribution or logistics companies consider industrial-grade robots as the technology with the most potential to disrupt the industry or create a competitive advantage—a year-on-year increase of 4 percent. In addition, 67 percent of these decision makers cite robotics and automation as the most likely to prevail within the industry over the next four years.

The global report said that although the adoption rate for robotics and automation solutions was around 30 percent in 2018, the expectation is that this will rise to over 70 percent by 2023. The majority of adoption is expected to be in the United States, with over 60 percent of respondents coming from North America.

The report also confirmed that there is consensus that robotic and automated solutions will become the norm in the not-so-distant future. In fact, 86 percent of survey respondents said that they expected the technology to impact supply chains over the next 10 years. In addition, decision makers already consider automation as a disruptive—and positive—force in the supply chain, thanks to the technology becoming “smarter, safer and more accurate.”

As distribution and logistics companies look for ways to remain both competitive and efficient, robots are seen as integral tools in all aspects of the supply chain.  The most common uses are in distribution centers, where robots will not only pick, pack and sort products but also load, unload and receive. And while automatic guided vehicles have been a familiar sight in physical locations for some time, the report said that survey respondents cited improved flexibility, scalability, falling costs and increased ROI as reasons for why more robotics and automation implementations are on the horizon.

The Next-Gen Supply Chain Is Already Here

The caveat to this optimistic outlook is that 25 percent of survey respondents overall could not currently see a clear business case for integration, while 15 percent had a lack of understanding as to the current technology landscape.

Around 17 percent of respondents said that they were unlikely to integrate robots into their working practices, although the report did not highlight any specific reasons why. However, these opinions were not echoed by the majority of decision makers, many of whom expressed a belief that next-generation supply chains would continue to evolve to match consumer demands in a digital society.

“According to our survey, 8 of 10 respondents believe digital supply chain will become the predominant model within the next five years. What’s more, respondents believe that many of the supply chain innovations included in the survey have the potential to disrupt the status quo and create a lasting competitive advantage for companies that embrace them,” the authors of the report concluded. “This belief in the competitive and disruptive impact of supply chain innovations has risen steadily over the five years we have been conducting the survey, and at some point in the not-too-distant future we expect these innovations to reach critical mass and explode into exponential growth and impact.”

Berkshire Grey believes that the not-too-distant future is already here. We take a holistic view to robotic automation that leverages state-of-the-art vision systems, advanced gripping, dynamic planning and machine learning. Our technology provides real solutions that will not only grow your business but also maintain profitability and productivity in an increasingly competitive distribution and logistics space.

To learn more about how Berkshire Grey’s intelligent commercial robotics can revolutionize your eCommerce fulfillment, retail replenishment and logistics operations, please contact us here.