The Benefits When Considering Automation

The Benefits When Considering Automation

AutoStoreIn today’s ever-changing market, automation is the leading edge most companies are using to gain a competitive advantage. Companies delaying automation will fall behind, primarily due to the brisk speed at which innovation is already being adopted in the market. The pandemic showed the world that the current supply chain model was modeled after a world that does not exist anymore. Customers demand easy access to products, speed of delivery, and high-touch customer service. However, many executives are unsure of where to begin with automation, what products are right for them, or even what company they should be using, causing them to delay the process altogether. By automating your business, you can execute operational activities more efficiently. Robotics take care of monotonous tasks while employees can focus on main business processes and more complex tasks. The below highlights some key benefits to automation:

Autonomous Mobile Robots Reduce Human Movement & Injury

OTTO AMRPULSE Integration partnered with OTTO Motors to complete the largest at scale deployments of AMR technology in North America. During the study, PULSE compared AMR performance to existing technologies and human load factors. The result, AMRs represented 10% of the equivalent manual handling labor costs and 20% of the cost of a forklift.  It is important to note the situational aspects associated with this study. At higher speeds and with advanced safety features, AMRs outperformed manual carrying, and driver operated pallet loaders over long distances. However, humans have more agility moving goods for short distances or around stations.  It was determined that a blend of both would create the optimum result with output and efficiency. AMRs would conduct the heavy lifting and repetitive labor while humans would operate at stations carrying out tasks of picking, sorting, or quality control. Reducing the number of people moving around a facility compounded with the risks of human driver error, and injury related to repetitive “heavy lifting” tasks helped alleviate some of the many key hazards companies continue to face leading to costly accidents in their facilities. Due to materials handling automation, the repetitive task of pushing product is assumed by the vehicle, while more value-added tasks are left for the workers. Injuries decrease and overall company injury related costs decrease as well.

Integration Into Existing Equipment

WMSWhile researching supply chain automation, it is important to consider solutions that complement the equipment you already have or plan to buy. Some autonomous vehicles, including those from OTTO Motors, integrate with a warehouse management system (WMS) to reduce unnecessary steps. Compatibility between equipment makes the installation of new products more efficient.

Scalability

Scaling a business can be a complicated process. There are many variables that add to a business’s operational costs when it’s being scaled. The more manual process your business has, the harder it is to scale that business. When you automate your processes though, scalability becomes easier. All a company needs to do is make sure that systems can accommodate that growth. If not, minor upgrades are all that is needed.  System’s like AutoStore are easily scalable solutions for retail and e-commerce applications.

Increased Collaboration

An added benefit to automation solutions is that it allows increased collaboration among teams. Many believe automation results in job loss and less teamwork. However, it’s the exact opposite. When repeated tasks are automated, staff will have more time to focus on more integral aspects of the business. Instead of doing mindless repetitive tasks, they’ll work together to make the business better. When business processes are done manually, teams will have to dedicate all of their efforts just to keep things moving. This results in wasted human potential and allocating the valuable brainpower and creativity where it is not utilized effectively.

Accountability

AccountabilityWhen a business is automated and streamlined properly, it’s easier to assess responsibility. This comes as a result of having clear, well-defined tasks, with all the minor tasks automated. If your business has many small tasks that are not automated, they tend to become “nobody’s responsibility”, as none of the staff is directly responsible for them. When these tasks are automated, you end up with the few important tasks where staff members are directly responsible. Having this clear responsibility distribution increases the staff’s accountability for work done and makes quality control easier.

Trackability

Automated and digitalized processes are much easier to track. Your system knows exactly the time, effort and resources required to carry out a specific task. Using the right tools, you can get valuable business insights that’ll help you make it better.

Top Material Handling System Solution Provider

Top Material Handling System Solution Provider

Leading Material Handling System Solution Provider

PULSE Integration has been featured as a top material handling system solution provider for 2021 by Logistics Tech Outlook Magazine.

Logistic Tech Outlook provides an annual listing of 10 companies that are at the forefront of providing material handling system solutions and transforming businesses.  The magazine is read by over 68,000 subscribers who are key decision-makers in the logistics sector.

The magazine also features contributory articles from senior management executives from distribution, warehousing, manufacturing, supply chain experts, logistics professionals, and other technology decision makers on how material handling solutions improved operational performance in their organizations.

Read The Article Here

PULSE Welcomes You To ProMat DX

PULSE Welcomes You To ProMat DX

ProMatDX
ProMatDX, held April 12-16, 2021, is the new digital event experience designed to power up manufacturing and supply chain professionals from the U.S. and over 140 countries with critical access to the latest solutions they need now to improve the resiliency and agility of their operations.
ProMatDX combines the power of the connections, solution-sourcing and education that only ProMat can deliver with the latest digital event technology in a five-day event that will be the most important week of 2021 for the manufacturing and supply chain industry.
Attending ProMatDX is your unrivaled opportunity in 2021 to find solutions, connect with your peers and leading solution-providers and learn the latest trends and technologies that will take your supply chain to the next level of success. PULSE will be featuring state of the art order fulfillment technology at the upcoming virtual show. Make it a point to visit us

Click Here To Visit Our Showcase

Brittain Ladd, Andrew Benzinger of AutoStoreDon’t Miss Out On These PROMAT DX Educational Sessions!

Micro-fulfillment is one of the most talked about but least understood solutions on the market. Attend this session to learn the Who, What, When, Where and Why of Micro-Fulfillment.
PULSE’s own Chief Marketing Officer, Brittain Ladd, will be co-presenting with AutoStore’s Andrew Benzinger on the topic Why Micro-Fulfillment Is a Must Have.
Learn how combining additional technologies will supercharge your fulfillment strategy and create a competitive advantage
Mark your calendar for this revolutionary educational seminar held April 12, 2021 from 1:30 PM – 2:00 PM CT
Matt Chang and Matt RendallPULSE Integration’s Chief of Strategy & Innovation, Matthew Chang, and OTTO Motors CEO and Co-Founder, Matthew Rendall, share information about The Business case for AMRs in Manufacturing vs. forklifts, conveyors, and other modes of material handling at both greenfield and brownfield facilities.

This session is focused on providing a detailed discussion on the value of AMRs within a corporate supply chain.

Speaker Matt Chang, one of the most experienced experts on the topics of AMRs, will introduce content specific to the importance of companies adopting AMRs and the business case for doing so. Real world examples of how AMRs have been introduced will be provided. Check out more about PULSE’s AMR deployments here. Read our Business Case for AMR’s in Manufacturing here.
Mark your calendar for this revolutionary educational seminar held April 14, 2021 from 9:30 AM – 10:00 AM CT

Don’t Forget to View PULSE’s Product Demos at the Show….

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Software Solutions
April 14, 2021
10:00 AM CT
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April 13, 2021
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April 12, 2021
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Micro-Fulfillment as a Service

Micro-Fulfillment as a Service

A challenge faced by vendors that wish to introduce new technology into the grocery industry is that many grocery retailers are risk averse. Instead of jumping at the chance to embrace new technology, most retailers take a ‘wait and see’ approach. Specifically, grocery retailers wait to see what Amazon and Walmart will do. This has been especially true regarding the topic of micro-fulfillment. Although the use of micro-fulfillment centers within a retailers grocery ecosystem makes operational and financial sense, most grocery retailers have sat on the sidelines.

That has changed as a result of the announcement by Walmart that it is going to install micro-fulfillment centers in an undisclosed number of stores. Walmart will install solutions from Alert Innovation, Fabric and Dematic.

Walmart indicated that they are still in the testing and evaluation phase and that they have not identified the optimal solution. (You can read more about the different micro-fulfillment systems on the market here).

I have proposed the use of micro-fulfillment centers inside retail stores, in buildings next to retail stores, or in offsite ‘Dark Stores’. Micro-fulfillment is a must-have for retailers. However, let me be clear, micro-fulfillment isn’t just technology a retailer can purchase and install. Micro-fulfillment is a strategy retailers can leverage to reduce costs and complexity related to fulfilling online and curbside grocery orders, create a competitive advantage, and enable growth.

Most retailers that choose to leverage micro-fulfillment as part of their strategy have entered into direct arrangements with specific micro-fulfillment vendors. For example, H.E.B entered into an agreement with AutoStore. I rank AutoStore at the top of the list for micro-fulfillment. (Dematic will probably introduce the AutoStore system at Walmart; something I strongly recommend).

Is a direct relationship with a vendor the optimal choice? Is there another option retailers can choose? Yes, there is.

Micro-fulfillment as a Service (MaaS)

I prefer retailers to purchase and install micro-fulfillment centers across their ecosystems. I believe owning and operating MFCs is a wise move strategically for retailers.

However, retailers that don’t want to own and operate MFCs have the option to utilize Micro-fulfillment as a Service (MaaS). MaaS is a service that a few MFC companies are offering to retailers. Fabric has done a great job of marketing MaaS to potential customers.

At a high level, MaaS is a service whereby an MFC company will purchase or lease a building to install micro-fulfillment centers. An MFC company can also install one or more micro-fulfillment centers onsite in a company owned facility.

Once installed, the MFC company will provide the required labor (or use a 3rd party) to run the facility. Customers that sign up for MaaS ship their inventory to a MaaS location where the inventory is either stored or immediately placed inside an MFC. Retailers will have little to no upfront costs to leverage MaaS. The MFC company will fulfill orders for their customers. On average, the MFC company running the MaaS location will charge between $.58 to $.60 per line picked.

Sounds like a great deal!! It’s not. MaaS is nearly impossible to justify due to high operational costs. On average, grocery retailers can lose up to $25 on every online order they fulfill. MaaS reduces the cost of fulfilling online orders but not as much if a retailer operates their own micro-fulfillment centers.

Based on analysis completed by several strategy consulting firms, and based on my own analysis, the MFC companies offering MaaS have greatly underpriced their services. In addition, the projected order volumes that can be filled using a MaaS model will be difficult, if not impossible, to fulfill because of limitations within the MFC systems being used by the companies I evaluated.

Regardless of the limitations, I expect MaaS to grow in popularity for these reasons: Executives at some retailers will be very risk averse. To minimize risk, they will choose to essentially outsource micro-fulfillment. I know of several grocery retailers that are in the process of evaluating micro-fulfillment systems. A few of the retailers are leaning towards using MaaS as a way to reduce capital spend and mitigate risk.

Recommendations

Using real world examples, this is what I recommend all grocery retailers that are interested in MaaS to do.

Albertsons is one of the leading grocery retailers in the United States. The company is led by CEO Vivek Sankaran, former President and COO of Frito-Lay North America. I believe Vivek should be considered one of the best CEOs working today. I have written multiple articles about Albertsons and I have publicly stated that Albertsons should merge with Ahold-Delhaize. If the merger occurs, it would create the largest grocery retail conglomerate in the United States, and one of the largest in the world.

Based on announcements from Albertsons, the company is evaluating options for micro-fulfillment. Albertsons has a relationship with the MFC company, Takeoff Technologies. (I am a former advisor to Takeoff and Fabric).

Full disclosure: I have had multiple discussions with executives from Albertsons regarding the topic of micro-fulfillment. I also advised executives from H.E.B, Ahold-Delhaize, Publix, Amazon and Walmart on the topic of micro-fulfillment. However, I do not work for a micro-fulfillment company. I work for a system integrator, PULSE Integration, that has relationships with several MFC companies. I also write articles on the topic of micro-fulfillment.

I applaud Albertsons focus on micro-fulfillment. However, what should Albertsons do?

In my professional opinion, I recommend that Albertsons purchase and install MFC systems from AutoStore. If there is resistance within Albertsons for such a model, Albertsons should evaluate MaaS as an option. However, instead of only testing MaaS as a solution with one MFC company, I encourage Vivek Sankaran to speak with AutoStore, and negotiate an agreement whereby AutoStore will operate one to three MaaS locations for Albertsons.

AutoStore hasn’t embraced MaaS due to analysis they have performed that indicates MaaS is a higher cost and lower value option for grocery retailers than grocery retailers owning and operating their own micro-fulfillment centers. However, I believe AutoStore has no choice but to offer a MaaS solution due to growing interest in the topic. I strongly encourage AutoStore to partner with Albertsons.

Sankaran should also have one to three AutoStore MFCs installed within their grocery ecosystem, including installing an AutoStore inside a grocery store, to test which MFC performs the best. Sankaran can compare the results of MaaS and a company owned and operated MFC model at the end of one year. May the best MFC solution win.

In addition to micro-fulfillment, I strongly encourage Albertsons (and all retailers) to test the use of last mile delivery carts from the company Tortoise, and testing mobile retail using vans from Robomart. Both companies are generating a lot of interest from retailers. (I am an advisor to both companies).

Finally, I recommend that Albertson (and all grocery retailers) to improve the customer experience for online grocery delivery by providing their customers with a DynoSafe or a similar product. This article outlines the importance grocery retailers “winning the porch.”

Publix, Kroger, Ulta Beauty, Sephora, Macy’s, owners of malls, convenience store chains, and large retail development companies should also test MaaS and operating MFCs within their retail ecosystems.

What’s Next for Micro-fulfillment? 

I am convinced that Instacart will invest heavily in micro-fulfillment centers starting in 2021; probably with Fabric. Instacart will go public in 2021. By 2022, 80 to 100 micro-fulfillment centers will be dedicated to Instacart’s needs. By 2025, Instacart will become an online grocery retailer fulfilling orders direct to their customers. Instacart will end their relationship with their current customers. I anticipate that Instacart will open Instacart-branded stores in select locations. If I’m correct, Instacart should acquire Fabric in 2021. (Instacart is in an interesting position. I recommend Shopify, Google or Facebook to acquire Instacart).

Amazon is investing heavily in micro-fulfillment. I anticipate that Amazon will soon unveil a 20,000 square feet MFC built inside one of their AmazonFresh branded stores. I’m convinced that Amazon has no choice but to explore the use of Nano-fulfillment centers inside Whole Foods stores. I designed one of the first micro-fulfillment centers specific to the needs of Amazon. You can read about it here.

Amazon is creating a business model whereby they will sell more groceries through their Amazon branded stores than through Whole Foods. Why? Because Amazon is going to sell branded CPG and organic products inside its supermarkets. When Amazon acquired Whole Foods, I stressed to Amazon that they should introduce branded CPG products at Whole Foods to increase customers. The stores could be re-branded to ‘Whole Foods Plus.’ Amazon didn’t introduce branded CPG products at Whole Foods and sales have stagnated.

An argument can be made that Amazon should divest Whole Foods and focus on its own AmazonFresh brand. Target is the company that should acquire Whole Foods. Target can open Whole Foods Markets inside its stores. I have recommended to Amazon on several occasions to acquire Target and also open Whole Foods Markets inside Target’s stores. Since the acquisition hasn’t occurred, I’m skeptical that it ever will. If Amazon is not going to acquire Target, divesting Whole Foods should be explored.

Amazon and Kohl’s are piloting an AmazonFresh store inside a Kohl’s store; this is something that I recommended to Kohl’s and Amazon over two years ago so I’m glad that pilot has begun. If the pilot is successful, I recommend that Amazon should acquire Kohl’s.

DoorDash, Postmates and other restaurant delivery companies must expand into delivering groceries. I strongly recommend that these companies should invest in opening their own micro-fulfillment centers powered by AutoStore or some other MFC system. Grocery retailers are actively looking for a replacement for Instacart. Postmates, for example, could open MFCs; receive inventory from grocery retailers; store the inventory inside each MFC system; fulfill online and curbside orders; and use their own delivery drivers to deliver orders.

I also believe that restaurant delivery companies that partner with grocery retailers should teach their grocery retail customers how to open dark kitchens and offer their own branded meals.

Micro-fulfillment is going to grow in popularity. Every retailer needs to ask and answer this question: What is our micro-fulfillment strategy?

For more information on micro-fulfillment, you can read articles located here and here.

Read more articles like this from PULSE’s Chief Marketing Officer Brittain Ladd

The Growing Digital Divide in Manufacturing

The Growing Digital Divide in Manufacturing

There is a growing consensus that digitization is opening up a chasm in the manufacturing industry.

On one side, there are the innovative, tech-savvy firms that are forging ahead full speed with digital transformation strategies, and reaping the benefits of doing so. On the other side, are businesses that have been slower to embrace the ‘Industry 4.0’ trend and who are at risk of falling behind as a result.

Deloitte reports that early adopters of smart factory initiatives have enjoyed average gains of 10 to 12% in areas such as manufacturing output, factory utilization and labor productivity. Research published in The Harvard Business Review found that digital leaders are 1.5 times more likely to optimize production runs based on demand forecast.

Moreover, there are fears that COVID-19 could make the divide even greater. According to a survey carried out by L.E.K, 51% of businesses with existing advanced digital capabilities plan to invest more in digitized operations in response to the pandemic, compared to 30% of firms overall.

It isn’t that the benefits of digitization are disputed. According to another study carried out by Deloitte, 69% of decision-makers said switching to a digital supply chain would deliver exponential or significant benefits to their business.

Yet only a third said they were prioritizing this as a strategic objective. Asked what the barriers to digitization were, the most common answer was budgetary constraints. Other issues cited included not knowing where to start, misalignment of competing priorities across the business, and difficulties making the long term business case within a rigid financial reporting framework.

Making Good the Promise

As far back as 2016, industry bodies were heralding mobile robotics as critical pieces in the jigsaw for achieving agile, efficient “always-on” supply chains. According to Robotics.org, the use of mobile robots as an intralogistics solution would streamline workflows, cut picking errors, boost throughput, consolidate space and offset rising labor shortages and costs.

These are all benefits that the challenges of the COVID-19 pandemic bring into sharp relief. As a result, Interact Analysis has said that it believes the impact of the pandemic will lead to a long-term net rise in mobile robotics adoption.

“We believe that the impact of COVID-19 will lead to a long-term net positive for the mobile robot industry. E-commerce, near-shoring of manufacturing and adoption of robotics and automation to reduce reliance on human labor will all likely accelerate. This remains one of the most resilient and promising industries that we track.”
— Ash Sharma, MD & Senior Research Director - UK, Interact Analysis

That’s why PULSE Integration and OTTO partnered to undertake what is the world’s first in-depth analysis of automated mobile robots (AMRs) deployed at scale in industrial facilities.