This past couple of years has seen a huge boost in e-commerce activity across the globe. For consumers globally the COVID-10 lockdowns drove a profound change in shopping habits and although some have returned to the brick-and-mortar shop many continue to order online.
To keep up with such demands, there has also been an accelerated rate of automation within warehouses and distribution centres being adopted.
With shoppers increasingly moving to online stores and checkouts, companies have had to adapt and develop new ways to be more efficient and productive especially in meeting customer fulfilment needs.
“There are factories within our industry, which are now four times the size of what they were, pre covid in terms of production capabilities,” says David Dronfield, General Manager at Swisslog Middle East.
Leading the charge
“Food and beverage, footwear and apparel are all kind of leading the charge in automation right now, but I would put e-grocery as number one. Most of the players in the market are looking at how they will incorporate and move to automation to minimise their opportunity within e-grocery. The majority have still not done it. They’re still on a path moving towards that.”
It is one of the reasons why the Middle East has become an increasingly attractive market for automation experts like Swisslog who offer such technologies as conveyor systems, shuttle systems, monorails, robotics and warehouse management software. When Dronfield took over his role at the company in August 2021, a key mandate was to create awareness of the need for professionally integrated warehouse automation systems. An important part of this, he says, is understanding the value-led approach.
Finding the value
“It’s been a mix of both SMEs and large corporations that have incorporated automation, but with SMEs in particular there is a perception that automation is expensive. It’s this investment, this CapEx level, which really scares investors away, particularly private companies. They are very much used to their traditional way of doing things in the warehouse. The Warehouse is a typical high-cost asset that they invest in. And then the equipment traditionally would have only been about 15 percent fitted out and operated.
“So to move to automation where you require a higher level of CapEx has always been a major barrier. And we’ve had to work quite heavily at demonstrating it’s not just a CapEx that you look at, it’s the total cost of ownership and the long-term cost of operating these systems where you get your value.”
In terms of safety levels, for instance, materials handling is known as one of the leading causes of disabling occupational injuries. According to the National Safety Council, 20% to 25% of all disabling occupational injuries result from this type of work. In fact, in the U.S. almost 80% of forklift accidents involve a pedestrian while one out of every six workplace deaths are forklift related.
“One of the highest aspects of accidents and deaths, shall we say, within America, come from forklift trucks hitting pedestrians within warehouses. You don’t get that with automation equipment,” Dronfield explains.
As automation equipment is blanketed off there’s not a lot of interfaces with the human element, so you don’t have those same dangers and risks.”
Another myth that Dronfield is quick to dispel is that increased automation means less jobs for the labour force. Even in the last six months as generative AI tools like ChatGPT have quickly become more accessible, many workers have again had to consider the implications for their futures and whether the skills they have now will be relevant to the labour market in years to come.
“Yeah we’ve all heard the terminology that people lose their jobs but that’s not really the case,” Dronfield says. “In fact, automation inside distribution centre operation gives operators and workers a chance to upskill and develop whereas in your traditional mapped warehouses there’s little room for development. In the traditional setting there’s no real growth there. There’s no real learning uptake. Once you’ve learned the job, that’s it.”
He adds: “To draw a parallel of manufacturing 120 years ago, when there was the car production lines. Did that take jobs away or has that created an industry where there are more jobs? I don’t think you and I could afford to go out and buy a traditional vehicle if it wasn’t made, by automation techniques. It’s the same with warehousing and distribution and the supply chain. Automation is raising the level of effectiveness and efficiency and the jobs within that and the skill requirements are changing and increasing.”
Implementing a strategy
Dronfield acknowledges that changing mindsets in the region takes time. So too does developing and implementing an automation strategy that can evolve with the clients’ needs. To do this, data is often the critical link. It is the way in which data is gathered and analysed that decides what Swisslog does with its client and the direction in which it decides to go.
“It has to be a long-term approach. When we do the analysis on the current data the client can only give us clean data on historical data up to the date of which we engaged. The cleaner and more accurate the data, and the longer period that we’re looking at, the more accurate we can determine the snapshot of the clients’ needs and goals.”
Dronfield adds, “So we really need to be working with a client on what their strategic direction is, where they are going and what they want to enable in the future so we can build that into the system. In terms of expansion capability, we are not just then designing a system that is changed after ten years. We expect these systems to adapt and evolve over a period of time. And of course, yes, it will have a life cycle, but we’re looking at day one now as well as day five or year five with the client. And we are using all of that information to determine how we start, where we start, and where we go in the future.”