Top Trends in Warehouse Automation for 2023

03.21.2023

These are but a few of the challenges that the fulfillment industry faces as a part of a larger supply chain: 

  • War, inflation, labor shortages and energy supply constraints 
  • Cost increases, supply chain challenges, and the rise of populism
  • The possibility of recessions in various economies around the world

The good news is that automation can power economies forward to overcome labor crunches that are predicted to continue for some time; notably, the job market is still particularly tight in the U.S., which just added over half a million jobs. 

Looking ahead in 2023, what trends will continue to rise in importance in the automation space?

The recent International Federation of Robotics (IFR) World Robotics report showed industrial robot installation reached an all-time high in 2021, increasing by 31% over the previous year.


Global macroeconomic challenges will accelerate automation 

There are signs economies are headed into recession. If various economies contract, the adoption of robots won’t stop – and there’s a solid argument that it will increase. The recent International Federation of Robotics (IFR) World Robotics report showed industrial robot installation reached an all-time high in 2021, increasing by 31% over the previous year. While automated mobile robots (AMRs) were deployed to help solve supply chain constraints – and deliver faster to customers – labor shortages and the need to be more efficient in light of potentially constrained budgets are yet another reason automation will increase.

 

Robot adoption will increase

The AMR segment will keep expanding – with sales that could exceed $40 billion within the next half-decade – assuming growth continues at a CAGR of 15%. AMR use will no longer be confined to first-movers like the Amazons and Walmart that were already using robots well before the pandemic. Companies that had not considered using AMRs will do so to achieve greater efficiency. To achieve long-term competitive advantage, companies will adopt AMRs and scale their use across their operations to augment available labor.

The U.S. gained 1.3 million people to reach a total population of 333.3 million after the lowest-ever 0.1% of growth in 2021.

 

The labor crunch will continue

Workers shortages are happening around the world, with a global worker shortage of 85 million workers projected by 2030. While the U.S. Census Bureau projects population growth through 2050, other major economies’ populations have shrunk. The U.S. population expanded by only 0.4% in 2022, according to the Census Bureau. The U.S. gained 1.3 million people to reach a total population of 333.3 million after the lowest-ever 0.1% of growth in 2021. The country’s population is expanding at historical lows, with 18 states losing population. California, which prior to Covid hadn’t lost population, during the last two years logged back-to-back losses. Countries that are losing people include Japan, many Eastern European nations and Germany, Italy, Greece and Portugal. What’s more, China’s population of 1.4 billion grew just 0.03% in 2021 and seems to have topped out. 

Worker numbers in warehousing and logistics have been hit particularly hard, due in part to the space’s lower wages, aging populations and Covid remaining a threat. Stymied political solutions to improve the immigration process mean lack of labor is a structural reality – all of which means more robots will be needed to do more work more efficiently to keep pace with consumer demand.

Companies can implement robots in their warehouses by leasing robotic devices and accessing cloud-based subscription services.


Labor force upskilling will accelerate

Until recently, warehouse work was low-paying and low-skill – a job rather than a career. With the increased use of technology including software, robots and automation, fulfillment centers will look to train and retain a modern workforce to arrive at a more sustainable work model that’s sustainable whether demand goes up or down. 


RaaS implementations will increase

Robots-as-a-service (RaaS) is similar to software-as-a-service (SaaS) as it uses the rent-rather-than buy and pay-as-you-go subscription model. Companies can implement robots in their warehouses by leasing robotic devices and accessing a cloud-based subscription service. By avoiding purchasing equipment, they leave maintenance and updates to the vendor. A warehouse can start big – or begin small and scale up later – because it only needs to rent the number of robots it needs. RaaS can enhance or replace rigid fulfillment systems to deliver scalable and portable conveying and sorting. The warehouse avoids prohibitive upfront costs of comparable traditional systems to convert capex to opex, while the vendor handles performance enhancements, maintenance and upgrades.

RaaS can enhance or replace rigid fulfillment systems to deliver scalable and portable conveying and sorting. 


Hardware-agnostic platform adoption will grow

Most AMRs and the fulfillment software they run on use individual bots or agents, leading to siloed solutions for individual workflows and areas. In contrast, fulfillment platforms that integrate multiple agents will become more common. These hardware- or robot-agnostic platforms work with the different bots and the human beings who interact with machines in the fulfillment process to drive seamless fulfillment across the warehouse. They assign multiple agents to drive work across various areas and material flows to solve the myriad intricacies impacting warehouse efficiency. 

Hardware-agnostic fulfillment platforms reduce the need for separate software integrations and allow companies to use best-in-breed robotics.

Fulfillment platforms reduce the need for separate software integrations and allow companies to use best-in-breed robotics. An open API platform enables third-party participation in applications and robotic automation system development. Multi-robot orchestration lets any robot plug in and be controlled centrally – even from off site – to unlock limitless operational and technology choices. The result of the platform is end-to-end process orchestration – from inbound to outbound – along with multiple bot orchestration to maximize smart warehouse performance. 

 

Fulfillment efficiency will become job #1

When the pandemic struck, retailers pushed hard to increase their last-mile and micro-fulfillment 

capabilities to put goods closer to ecommerce and omnichannel customers. The hectic pace of leasing warehouse space has slowed down in the past two quarters. Companies leased 132 million square feet of industrial space across the U.S. in the fourth quarter, down 28.2% from the third quarter, according to a new Cushman & Wakefield report. 

In short, the retail market is settling into a late-pandemic phase, where shopper preferences of in-store versus ecommerce will be tested. Brands are looking to strike the right balance between the two modes. As companies slow warehouse expansions, their focus will be on creating the most efficient fulfillment centers to meet the needs of ecommerce and omnichannel customers alike.

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