How Do Semi-Automated Storage Solutions Stack up Within Europe?
Total Page:16
File Type:pdf, Size:1020Kb
How do semi-automated storage solutions stack up within Europe? A background on how semi-automated storage solutions have evolved, and why technology, worker’s legislation, changing timescales and buying landscape has created the need for semi-automated storage solutions. This paper looks at the challenges faced by the logistics industry, from manual labour through to full automation, and asks whether automation is the answer in every location. And, more importantly, whether it will help to address the biggest problems faced by the industry today. vuodesta 1886 LLEADINGEADING TTHEHE SSEMI-AUTOMATEDEMI-AUTOMATED RREVOLUTIONEVOLUTION Constructor Group is one of the world’s leading developers and manufacturers of storage solutions. We are proud to work for some of the most famous brands in the world, as well as many dynamic and pioneering SMEs. With a rich heritage, stretching back 150 years, our products have been used in everything from Olympic stadiums to earthquake relief. Constructor Group has a global reach, but offers regional expertise and delivery through its subsidiary companies, which include other leading brands such as Dexion, Kasten, Bruynzeel, and PSS. As an international business, we don’t just manufacture and sell shelves, we empower our colleagues to be creative and take the time to understand the demands of different global industries in order to fi nd the best solution for you. Whatever the challenge, we make it work. How do semi-automated storage solutions stack up within Europe? WHITE PAPER TTHEHE SSITUATIONITUATION Pallets, forklifts and people have been the essential components desires and expectations of both employees and customers for every warehouse for over 100 years. Although both of the have grown beyond recognition, and it becomes clear that our fi rst two aspects have evolved since then, the logistics industry approach needs to evolve. today is still heavily reliant on the one component that hasn’t This paper looks at some of the challenges we currently face, evolved – people. and examines solutions that could ensure our survival for the Of course as many company’s state, people are their biggest next 100 years - and beyond. asset. However, in these lean, competitive times, they can also be their biggest cost. Add in the fact that the needs, wants, 3 WHITE PAPER How do semi-automated storage solutions stack up within Europe? YYOUOU WWANTANT IITT WWHEN?HEN? AALLLL PPARTART OOFF TTHEHE SSERVICE!ERVICE! Want one item, in multiple sizes and colours, to try on and return, all at no extra cost? YYESES OOFF PPLEASE!LEASE! CCOURSE!OURSE! Same day Delivered to delivery? your door? Even fi ve years ago these demands Someone sitting on a bus, train or on their the scenes to get their purchase to their would have been seen as outrageous, sofa with a smart phone in hand gives no front door. They just know they want it, but today they are expected. thought to what needs to happen behind and they want it now. 4 How do semi-automated storage solutions stack up within Europe? WHITE PAPER A TTIMEIME FFOROR CCHANGEHANGE The old adage, you snooze and you lose deliver before they click to buy. Now that has never been more relevant, particularly would be challenging. in the logistics business. Companies If Bob Dylan thought “The Times They have to adapt their operations to keep up Are a Changin’” when he penned his with consumer demands. But adaptation multimillion-selling song back in 1964, requires investment. And with smaller the title of another award-winning song, profi t margins and increasing staffi ng “You Ain’t Seen Nothing Yet”, also springs costs, a balance needs to be found. to mind. Automation within the logistics industry has enabled many companies to keep pace with demand, but full automation requires serious investment. Not every company needs it and as we have discovered, not every country is ready for it. It is diffi cult to say what customer expectations will be when it comes to delivery in fi ve years’ time. With the way technology is going, maybe someone in Silicon Valley is working on fi nding a way to get inside the customers’ head to 5 WHITE PAPER How do semi-automated storage solutions stack up within Europe? AAUTOMATION:UTOMATION: TTHEHE SSTATETATE WWE’REE’RE IINN A quick browse online indicates automated their storage process is of the workforce. On the face of it, that automation is the only way dead in the water, or at the very least this is a win-win situation as this alone forward when it comes to warehouse left struggling to survive. would alleviate two problems in one: operations. Countless articles, shortage of people willing or able to The proponents of automation claim thought-pieces, advertisements and work in the industry, and having to pay that one of its main benefi ts is that it press releases breathlessly imply that higher wages to those who do choose will drastically reduce the headcount any company that has not yet fully it. AAUTOMATIONUTOMATION DDEFINEDEFINED The Chambers Dictionary defi nition of Some examples include: automation is as follows: 1) Bar-Code Scanning has been used for decades, and remains the most commonly used form of warehouse automation. 2) Voice-Directed Picking has been around since the 1990s. automation noun The use of automatic machinery in manufacturing and data 3) Pick-to-Light Systems have been used for order fulfi lment since the early -processing, so that entire procedures can be automatically controlled with minimal 1980s. or no human intervention. 4) Horizontal and Vertical Carousels and Vertical Lift Modules. 5) Automated Storage and Retrieval Systems (ASRS). As the defi nition implies, automation isn’t ASRS is the most comprehensive of these, with the ability to be used across just about robots and drones. Automation, many functions including assembly, order picking, distribution, storage, waste or at least automatic machinery, is not handling and replenishment. The market for it is therefore huge. According to new. It comes in many forms and is Marketsandmarkets.com, the automated storage and retrieval system (ASRS) already the mainstay of most warehouse market is expected to grow from USD 5.19 Billion in 2015 to reach USD 8.43 operations. Billion by 2022, at a CAGR of 7.1% between 2016 and 2022. RREASONSEASONS TTOO AAUTOMATEUTOMATE Automation has moved up the agenda for a number of reasons: Changing demographics in the labour market has increased labour costs, the changing ways in which customers are shopping and the ever present need for more effi ciency, productivity and overall cost reduction. 6 How do semi-automated storage solutions stack up within Europe? WHITE PAPER RRISINGISING LLABOURABOUR CCOSTSOSTS As Figure 1 shows, in January 2016, 22 out of the 28 EU former Yugoslav Republic of Macedonia, Serbia and Turkey also Member States had a national minimum wage. The exceptions had them. were Denmark, Italy, Cyprus, Austria, Finland and Sweden. In As you would expect, these monthly minimum wages varied addition, candidate countries such as Albania, Montenegro, the widely, from EUR 215 in Bulgaria to EUR 1923 in Luxembourg. Figure 1: National Minimum Wage Across the EU Member and Candidate States in January 2016 With staff costs being the biggest 5% 80% overhead for the majority of warehouse operations, a recent report by DHL Just 5% of current 80% were being included two surprising statistics: warehouses are automated manually operated with no supporting automation The report, Robotics in Logistics, did go constantly improving IT.” was in large sorting hubs, where there on to say that the latter were dealing may still be more than 1,000 employees It also added the comment that even with demands for increased productivity who spend their time loading and among the 5% claiming to be automated, and throughput “by supporting existing unloading trucks, handling parcel ULD “even the most highly mechanised workers with good layout design, mobile containers, and manually sorting odd- environments still had to employ people material handling equipment, and sized items. in key functions.” An example they gave 7 WHITE PAPER How do semi-automated storage solutions stack up within Europe? TTHEHE PPEOPLEEOPLE PPROBLEMROBLEM In addition to labour costs, the industry also has a problem with and cold storage operations conduct warehousing activities in its image. Despite the best efforts of recruitment agencies and sub-zero temperatures, it is easy to see why there is a dearth of careers advisors, the perception of many is that they would be quality applicants of any age. working unsociable hours in a cold and dirty environment in Most of the problems faced by the industry in relation to the a poorly paid, dead-end job. Add to that the belief that it is an workforce can be broken down into three major areas: unwelcome place for women, and the majority of frozen food AAGEINGGEING PPOPULATIONOPULATION UUNWILLINGNWILLING PPOPULATIONOPULATION DDIFFERENTIFFERENT SSKILLSKILLS RREQUIREDEQUIRED Order picking is a very manual job. As anyone who works in the sector The DHL report suggests that as knows, many warehouses and Any automation of processes brings a traditional warehouse employee distribution centres have been with it the need for a new set of skills. typically spends most of his or her transformed over the past decade or In the warehouse environment it time walking around the warehouse so. Unfortunately, those who don’t work means understanding of and getting to gather all of the items for an order, in it still think of warehouses as being to grips with new technologies, the a picker might walk between seven an unattractive workplace. A report by ability to adapt to new ways of working, and fi fteen miles per shift. With the PwC Transportation & Logistics 2030 and in many cases accepting that state retirement age rising in many found that many young people, as omni-channel operations are here to countries, there can’t be many people well as more senior managers, did not stay.