Krishnan Sundaresan, Director at ARRYVE
Robots, in the not-too-distant future, will evolve from an advanced technology to a critical component of infrastructure, akin to the ERP systems that form the information backbone of most distributors today. Your competition is evaluating robots, and you should be, too. But success won’t come from simply keeping up; distribution leaders of the future will go beyond to step up, stand out, and secure a competitive advantage.
Creating a unifying vision to integrate robots into your organization is the first step towards that competitive advantage. Companies that focus their attention narrowly on tasks that can be automated today will miss out on seeing around the edges and harness the power of robots. Traditional process levers such as lean and value stream analysis have already enhanced the loading, putaway, and retrieval activities in most distributor’s warehouses. The next frontier will emerge from robots.
With this frontier in sight, robots can’t be considered the future of distribution. They are the present; and distributors that don’t plan on integrating robots with a holistic perspective will be left in the past.
Building Blocks of a Unifying Vision
A unifying vision builds on this holistic perspective to understand the impacts, opportunities, and essentials of transforming the distribution operation into robotic reality, and it comes down to three basic principles.
Principle One: Make it Matter
The vision for robots needs to be integrated into the fabric of the organization; robots can’t be seen as the next passing fad or simply a cost reduction mechanism. Clearly articulating distribution’s goals is imperative to orienting the organization to the future, and providing direction and guidelines for the tactical decisions of the business functions.
Robots should be considered as a value enabler in the annual strategic planning process, and evaluated in terms of their impact on the main cash flow drivers of revenue, cost, CapEx, and working capital. This evaluation can’t be performed in a silo. A broader alignment with the supply chain goals of customer service, product variety, cost management, customer value creation and extraction opportunities is vital to the process.
Assess robots in the context of the discrete value chain activities, controls and governance, technology enablers, and organizational capabilities. The distribution and organizational visions need to operate in harmony to gain the needed political support to deploy robots. Considering the success and risk factors and providing the roadmap to optimize distribution are the keys to realizing enhanced value in the process.
Senior leadership’s commitment is absolutely critical to the successful implementation of the robot-assisted processes. Whether in assessing the organizational resistance to robots, recognition of employee contributions to adoption, maintaining a sense of urgency, constant communication to reinforce expectations, robot deployment is an initiative that needs to be championed by the senior management.
Principle Two: Measure the Mandate
Evaluate the supply chain value propositions and how they support the business goals of revenue and operating income. A deeper dive into organizational capabilities, processes, and gaps between the customer commitments and the current state of operations would be essential to prioritize processes for automation.
Beyond the CapEx and OpEx spend on robots, quantify reductions in error rates, accidents, and labor requirements and improvements in productivity, customer service levels, product assortment, and inventory turns to ascertain the total value proposition of robots in automating the processes.
Selecting the right processes for automation is important. Processes that entail a significant amount of manual labor, bottleneck processes that need a faster turnaround, processes prone to high error rates and accidents are some of the low-hanging fruits. In a typical warehouse or distribution center, pick, pack and ship operations meet the criteria.
Robots truly shift the dimension of merit in the warehouse operations by streamlining the product flows, and reducing the turnaround time. But robots can’t deliver value as a standalone piece of technology. A combination of technology, partnerships, metrics, people and process will be the building blocks to realize the promised value.
Principle Three: Transform your Team
Introducing robots presents unique challenges as an organizational initiative. Whether in enabling connectivity with enterprise software, job redesign, warehouse layout redesign, and safety procedures, the augmented skill level of the workforce is a critical success factor. Building a new set of organizational competencies is paramount to making robots work.
Companies need to be willing to invest in and nurture complementary top talent. It is not really a choice. As a distributor, talent acquisition and management will be a huge challenge in order to effectively deploy robots; the technology talent required to support the development and management of advanced robots will only increase in the near future. Employees need to be able to navigate the robotic landscape in technology, marketing, and engineering to develop and sustain a competitive advantage.
And never lose sight of the effort needed to adapt to the new ways of working. This goes beyond training and communication, and its return should be evaluated in terms of the benefits forgone if behaviors remain the same and no one incorporates robots in their work. Building an alliance from warehousing, logistics, and layout engineering will accelerate adoption of the change. Once leadership recognizes the linear relationship between actual benefits and user adoption, they will become natural ambassadors as well.
Necessity, Not Choice
Robots are quickly reaching a liftoff point. The convergence of increased automation of manual jobs, the available technology to power complex tasks, and a decreasing cost curve will only accelerate the pace of robot-assisted distribution.
An overarching vision to be the best in class in distribution, commitment to a new way of operating, and investment in the technological and human competencies necessary to reach it will be the hallmarks of leaders. Distributors who reinvent themselves, strive to enhance customer satisfaction, and meet the challenges of competition will stay ahead of the curve. Those unable or unwilling to invest in robots as a benevolent disruption will find their best days behind them.
Krishnan Sundaresan, a Director at ARRYVE, is a supply chain process expert with experience across the semiconductor, consumer technology, and automotive industries. He works with clients to identify process improvement opportunities, define business cases, and manage business transformation initiatives while advising companies on distribution, operations improvement, insourcing, and business transition issues.