SUPPLY CHAIN SOLUTIONS
ROBOTS TO FUTUREPROOF THE SUPPLY CHAIN WORKFORCE By Neil Berry SVP & GM, EMEA, Berkshire Grey
AUTOMATION — A STRATEGY TO MEET CUSTOMER DEMANDS
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upply chains are suffering from an unprecedented workforce crisis, which is driving up costs and impacting operational flexibility. A shortage of labour has become an established problem over the past decade, but the effects of Brexit and COVID-19 have brought it to a peak, with many employees leaving the UK or unable to work. This is not a temporary issue — even when the uncertainties around Brexit have settled and the pandemic is over, many won’t return to the UK or to those jobs. This has come at a time when adoption of automation in the supply chain and advancements in the field of robotics have accelerated. Businesses are reviewing their efficiency, profitability, and ability to respond to customer demand, and many are now considering how automated robots could be the solution to the labour crisis.
EU WORKERS DETERRED BY BREXIT Many jobs in the UK supply chain are filled by EU born workers, in particular, machine operators, warehousing and factory employees, according to a study published in January 2021. These jobs are set to be affected by the planned points-based system to be introduced as a result of Brexit, of which a government policy document from February 2020 said one of the aims was to attract skilled workers to end a reliance on low paid labour from Europe. For the supply chain, this equates to approximately 20 per cent cut in labour availability. The impact of this is being felt already.
COVID-19 — A GLOBAL PROBLEM The labour crisis is not purely a UK phenomenon. COVID-19 has affected workplaces and workforces around the world. eCommerce sales have exploded, but businesses have found it difficult to staff their warehouses and scale up to the demand. Businesses have been forced by the pandemic to implement social distancing in highly populated workplaces, introduce PPE, and establish additional hygiene measures. Meanwhile, numerous employees have been off sick, self-isolating, or returning to home countries where they felt safer: about 1.3m foreign born workers left the UK during the pandemic.
THE CHALLENGES OF EMPLOYING PEOPLE IN SUPPLY CHAIN
Although this situation has reached crisis point, it was already a challenge to attract and keep people in warehouse picking, packing, and restocking roles before the effects of Brexit and COVID-19 were felt. The challenge of filling these jobs was a major concern voiced by UK logistics and recruitment executives at the Multimodal 2019 event in Birmingham. One speaker stated that more than 25 per cent of people in the global supply chain were beyond retirement age, and some 45 per cent of companies had reported that they were struggling to fill vacancies.
According to the U.S. Bureau of Labor Statistics, the warehousing industry is among the top four industries with the highest worker turnover rate at 37 per cent, compared to average turnover rate of 3.6 per cent. It is a similar situation in the UK. Perceptions of general working conditions have a tendency to deter applicants and the realities of the job lead to short employment terms. The cost to businesses of covering high levels of sick leave and repeatedly recruiting and training is significant.
32 MARCH 2021 | FACTORY&HANDLINGSOLUTIONS
This combination of Brexit, COVID-19 and a reluctant workforce poses an unprecedented challenge to the grocery, retail and logistics sectors, restricting an organisation’s ability to scale. In times of increased demand, such as seasonal surges, or with the rise in eCommerce we have seen through the pandemic, the need for additional labour is high. If the workers are not available, customer orders are not fulfilled efficiently, and the business has a potential profitability and customer satisfaction problem. Likewise, at times of low productivity the workforce might be working under capacity, so businesses need a way to smooth out the peaks and troughs. In the quest for consistency, organisations have been using technology to maximise productivity and efficiency, and many have embarked on the route to automation. It can be helpful to understand how this works in real terms. One of our customers has told us how automated robotics allowed it to scale and support high order volumes created by COVID-19. In its regional distribution centre which serves more than 100 stores, operates seven days per week on two shifts per day, picking was the most labour-intensive operation, utilising 10,000 labour hours per month to pick the 2.5 million items/units. During the pandemic, demands on the supply chain surged as eCommerce sales almost doubled. Labour availability in the vicinity of the facility was scarce, even before COVID and continues to be limited. Labour scheduling was constraining the distribution process, requiring additional shifts be added, which was not cost-effective for the business.
The company avoided adding another shift to the picking area by extending the robotic system operating hours, and the robotic stations have provided a reliable, non-stop workforce in a heightened COVID-19 environment. The results of this include a 70 per cent reduction in the labour associated with break pack replenishment picking; about $1 million in savings per year in this distribution centre alone; and increased item-pick replenishment volumes by 30 per cent.
SUPPORTING HUMAN LABOUR WITHIN SUPPLY CHAIN The benefits to a business of automating and deploying robotics are too great to ignore and it is widely accepted that this is the path that all organisations will eventually tread. However, it is not about replacing the human workforce with robots. Businesses should not be thinking about wall-to-wall automation, rather automation for parts of the supply chain process that are difficult to staff, physically demanding, subject to new social distancing safety protocols, or prone to low job satisfaction and high turnover: for example, repetitive tasks that require high levels of accuracy coupled with strenuous lifting and walking and high-volume order picking that can be affected by seasonal surges. Robots will be critical in taking on physically demanding jobs and supporting an ever shrinking workforce that is increasingly hard to retain.
As the availability and inclination of workers to fill certain supply chain jobs reduces, new roles are emerging — operating and monitoring the robots for a start. As automation becomes ubiquitous, workers will be redeployed in more skilled and varied tasks that bring greater satisfaction and, for the business, result in lower staff churn rates.
TIME FOR CHANGE
This is an important time of change for the supply chain. Increasingly, businesses have been seeing the benefits afforded by automation, and robotics will eventually change the entire composition of the supply chain. It needn’t mean complete and immediate transformation of an organisation’s existing systems, but while the costs of producing and deploying systems are falling, businesses cannot afford not to start the automation journey.
Berkshire Grey
www.berkshiregrey.com
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