Historical periods often aren't labeled for their salient features until years after they've become history, but the recent spate of bell-curve-busting events is creating epochal monikers in real time. We’ve just left the year that has already been stamped with "The Great Resignation."
Labor shortages aren't new, particularly to supply chains, where we've been talking about warehouse worker and driver shortages for years now, but the impact of the pandemic has greatly exacerbated the ongoing challenge of labor, such that it reached a new peak last September when 4.43 million people quit their jobs, hitting a quit rate of 3.0%, the highest on record — which came on the heels of a record-setting 2.9% quit rate in August.
While a challenge across industries, the warehousing, transportation, and utilities* sectors have been hit particularly hard, posting a record 589,000 openings in September. Shortages of warehouse and transportation workers are causing and exacerbating supply chain bottlenecks at ports, railyards, and warehouses, keeping products from arriving to final destinations on time, and containers and transport from getting to where they're next needed.
The Rise of Omnichannel Fulfillment
Today's labor market challenges are not just a matter of numbers but of kind. The pandemic has introduced and accelerated changes in consumer shopping behavior tremendously, adding layers of complexity to traditional jobs in retail and across the supply chain. Consider that today's labor shortages have coincided with a period of prolific and accelerating omnichannel shopping.
In 2Q21, ecommerce represented 13.3% of total U.S. retail sales, compared with 10.9% of sales in the same quarter of 2019, according to the U.S. Census Bureau. In actual dollar volume, that represents an additional $80.8 billion of merchandise ordered online, and much of that, unless picked up via click-and-collect at the store (which has itself accelerated astronomically since the onset of the pandemic), must be picked, packed, and shipped from a from a DC, micro-fulfillment center, or store.
The evolution to omnichannel fulfillment has truly created a paradigm shift. For hundreds of years ― for millennia even — consumers have been shopping in essentially the same way: by walking or driving to a marketplace, whether an agora in ancient Greece or a modern-day shopping mall, selecting their items, and transporting them home.
Ecommerce has flipped that equation on its head. Today's consumers demand items to be picked, packed, and transported for them, to the location of their choice, in-store or out, which has added to the complexity and volume of work — at a time when labor shortages are at an all-time high.
The combination of labor shortages, the need for social distancing, and rising demand for omnichannel fulfillment has created a labor crisis. In the warehousing industry, these trends are exacerbated further by the opportunities for work that the labor shortage has opened ― opportunities for jobs that are less physically taxing than many warehouse jobs that can require long days of walking back and forth, bending over, reaching up, lifting heavy boxes, and working at high rates of speed to meet punishing goals.
Here Come AMRs
Thus, has hiring and retaining employees become the most acute pain point in the warehouse, and it is driving organizations to accelerate automation, across the warehouse but particularly in robotics. In a recent survey (Retail Core Processes, May 2021), retailers report that they are currently implementing warehouse management (26.5%), fulfillment (45.5%), and robotic automation or co-automation (27.2%); plan to implement in the next 12 months ― warehouse management (13.3%), fulfillment (18.3%) and robotic automation or co-automation (34.3%); and plan to implement in the next 12-24 months — warehouse management (3.4%), fulfillment (5.6%) and robotic automation or co-automation (21.5%).
Warehouse automation is the process of automating the movement of inventory (and data) into, within, and out of warehouses to customers or consumers with fewer human resources. Automation is not new to warehouses. However, advances in both digital and physical process automation and analytics, including computer vision, track and trace, telemetry, microservices, APIs, cloud, software, AI, and robotics (which themselves incorporate or work in tandem with these technologies) are opening new opportunities to automate in more flexible and optimal ways.
Specifically, a newer group of modern, intelligent robotics including autonomous mobile robots (AMRs) and robotic arms are transforming the warehouse with their ability to navigate flexibly, to "see" paths and objects around them, and to work collaboratively in tandem with humans in ways that incorporate the strengths of each and minimize ambulatory-heavy and repetitive tasks for people.
Not restricted to fixed routes as autonomous guided vehicles (AGVs) are, AMRs can navigate dynamically, plan their own routes, and navigate the dynamic movements of humans and others in their path. They can even follow a particular person around a warehouse, allowing that person to pick to a robot, remaining in a particular zone while robots come to and from.
Likewise, AMRs can take on entire tasks such as removing recycling, an activity that is not a good use of human labor. Why? Because this task involves a lot of walking and lifting or forklift operating, adds no value, and neither inspires employees nor takes advantage of their skills ― factors that take on even greater importance in an environment where people have more job opportunities available to them and are seeking experiences that are engaging, fun, and inspiring.
A few of the most impactful benefits that come from AMRs include:
- Quickly increase productivity
- Scale efficiently
- Flexibility
- Improve accuracy
- Can replace other fixed/expensive mechanized assets and free up space
- Handle repetitive/non-value-added tasks, heavy loads
- Social distancing in workforce
- Collaboratively work with humans
- Free people for tasks better suited to humans
- Quick training time (hours vs. weeks)
- Employee engagement
- Versatility
And, happily, AMRs are versatile and scalable such that they can help all warehouses from the most unsophisticated to highly orchestrated operations to modernize at their own pace, biting off just as much as they can chew and advancing as time, budget, and needs require. As with most technologies, plans to incorporate AMRs should be considered with a holistic view of the warehouse and the demands placed on it, so that the entire organism can work optimally and profitably.
*The Bureau of Labor Statistics (BLS) does not break these numbers out separately.
