Recently, we asked nearly a dozen of the world’s leading experts on warehouse automation a handful of questions to help us gauge the year ahead and pinpoint specifics for the food and beverage sector.
This is what we wanted to know:
The warehouse automation segment, in general, has been performing well over the past few years. What’s the outlook for 2014 and what are some of the factors shaping warehouse automation in the coming year?
On the topic of warehouse automation as it pertains specifically to the food/beverage sector, what are some of the unique challenges for clients in this space and how does your company tailor solutions and respond to demands in this sector?
Europe has traditionally outpaced the U.S. and other global markets in their adoption and utilization of warehouse automation. Is this still the case? How does the U.S. market compare to other global markets?
Are there any “major developments” that are likely to occur in warehouse automation this year, or will the segment continue to make incremental advances when it comes to innovations?
Following are their replies, which you will no doubt find as insightful as we did. – Lara Sowinski, Editor-in-Chief
Dematic’s Mike Kotecki, Senior Vice President, North America
What are you seeing for the year ahead? The food and beverage supply chain, from manufacturing to consumer, differs from others like hard goods, pharmaceutical and automotive in that the opportunity for offshoring the manufacturing component is limited. Thus, the outlook for 2014 in Food and Beverage (F&B) continues to be both strong and end-to-end from pallet-based production automation to order fulfillment. We see no slowing in this sector, but rather a race to gain strategic market advantage while growth abounds.
Meanwhile, like other sectors of the retail industry, the emergence of e-commerce is greatly impacting the food and beverage vertical. In terms of F&B, e-commerce means grocery home delivery, or at least pickup points for entered orders…like in a kiosk, drive-through or the side door of a retail store. Therefore, grocers have found that they can “lean into” e-commerce by fulfilling orders from stores or existing (modified) DCs before they run out and build a dedicated e-com DC. However, until they have a purpose-build e-com DC, the business case of home delivery is weak. That said, home delivery is clearly not going away and most metropolitan grocers know it is imperative in their future.
What about unique challenges to food/bev and your company’s solutions?
Specifically in beverage, the wild growth of SKUs and “creativity” in packaging make distribution and technology a challenge. Highly automated solutions are reserved for the high volume distributors, but productivity solutions such as voice picking, sortation, robotics, directed manual layer picking, etc. are often the answer until case volumes become very large.
Secondly, the labor costs in freezer warehousing continue to be a focus, considering that, based on our market survey, productivity in that environment is 5 to 30 percent lower than in ambient. Thus, we continue to see huge interest in pallet, case and now each storage/picking using freezer AS/RS. The business case for automated freezer pallet storage is particularly wonderful.
In addition, the intensity and labor associated with case and each picking continues to be a challenge, particularly in the slow moving tail of the SKU list. Although it seems counter-intuitive, dedicated automation for slow-moving inventory is a very popular area of focus for our customers. Our high-density, slow-moving inventory modules both reduce labor and free up very large amounts of DC real estate where stacks of dusty pallets would otherwise be the answer.
How does warehouse automation in the U.S. compare to other global markets, such as Europe?