This commentary was written by Peter Chen, CEO of Covariant. The views expressed here are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.
Over the last few years, e-commerce has experienced explosive growth for reasons we’re all too familiar with. Logistics teams scrambled to keep up with the demand while also juggling painful supply chain interruptions; one solution to meeting the demand was to build new warehouses and staff up accordingly.
Now, following this explosive growth has been a more recent dip in demand – although we’re still experiencing historical highs. Persisting inflation may stymie holiday gift spending but no one can be sure. This tension between volatile demand and retailers’ desire for peak-season preparedness creates a challenging atmosphere for logistics professionals. Not to mention the ongoing pressure added from the worker shortage.
These factors combined become a forcing function for fulfillment leaders’ expansion decisions. Continuing to pursue capital-heavy strategies like warehouse construction and hiring pushes could be catastrophically risky for a company’s bottom line. They’re too heavily dependent upon the future of the economic markets; a situation that’s out of anyone’s control. So how do e-commerce retailers and logistics companies take back control? Do they keep building bigger? Or do they build better?
As CEO and co-founder of Covariant, an AI Robotics company, we advise companies on how best to answer this question. I’ve toured hundreds of facilities all over the world and observed the wide array of automation solutions that fulfillment leaders are using to optimize their current warehouse and labor resources.
Consider modern facilities that cost tens of millions to build. The truth is that they are still relatively inefficient. Automating with tech like conveyors and AMRs is helpful, but when throughput rates are a competitive differentiator, intelligent automation like AI robotics can be a deal maker. So if you find yourself in the position of trying to optimize warehouse throughput ahead of an unpredictable peak season, here are key considerations.
The future of work will continue to move away from relying on labor to handle repetitive tasks and adoption rates of automation are reflecting this shift. In a survey from earlier this year, 1 in 4 supply chain and logistics professionals are using or are in the midst of adopting such automation technologies.
As you read this, there are AI-powered robots at leading retailers and 3PLs around the world autonomously fulfilling thousands of customer orders a day with pick per hour rates recorded between 500 and 1000+ PPH depending on the use case. All with less than 0.1% of them needing human intervention. Now is the time for you to build better warehouses that automate piece-picking with modern technology like AI Robotics.
Peter Chen is CEO and co-founder of Covariant, a robotics company that has developed the Covariant Brain, a universal AI that allows robots to see, reason and act on the world around them.
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