- Just 14% of supply chain professionals say their company is using autonomous vehicles (AVs) or drones. Another 36% say they plan to begin using the technology within the next five years, but 32% say they are unlikely to adopt the technology, according to the 2019 MHI Annual Industry Report.
- Of those who plan to invest in AVs and drones, 40-50% plan to spend less than $1 million on the technology, with the remaining respondents planning to spend more.
- Other forms of automation appear to be receiving a warmer welcome from the supply chain management profession. 32% of respondents said they are currently using robotics and automation and only 18% say they are unlikely to adopt these kinds of technologies.
The use of these technologies has grown slightly over the years, increasing from 8% of respondents saying they were currently using it in 2017 to its current level of 14%. But other technologies are being adopted at a faster pace. The number of people using predictive analytics has grown from 17% in 2017 to 30% in a recent survey, and cloud computing is already in use at a majority (56%) of companies.
While some AV and drone skeptics remain, others are investing heavily in the space. Amazon has invested in or purchased multiple robotics companies over the years, with many of these acquisitions focused specifically on operations. This Amazon trend began with the purchase of Kiva Systems in 2012, and these orange robots have now become synonymous with Amazon's fulfillment operation. More recently, deals have involved autonomous forklifts and autonomous carts.
If the nation's largest e-retailers invest in autonomous vehicles for their fulfillment operation, why has overall adoption been so minimal over the last few years?
The current level of adoption reflects fairly widespread use in operations and manufacturing, Thomas D. Boykin, supply chain specialist at Deloitte and leader of the MHI white paper over the last six years, told Supply Chain Dive in an email. But more widespread deployment within the supply chain won't happen until technological and regulatory changes allow the tech to be used for customer delivery.
"While the advancements related to the actual autonomous vehicles is progressing rapidly, infrastructure changes may also ultimately be a necessary prerequisite of wide-spread adoption of autonomous vehicles and drones of the size and weight of commercial distribution," Boykin said. "That said, leading companies are keenly focused on obtaining dozens of drone-related patents in recent years."
In 2017, MHI asked about the barriers to adoption for multiple technologies, including AVs and drones, and gave respondents multiple options. The most common issue for AVs and drones was the lack of a clear business case to justify the investment.
As for drones, businesses may be able to find other ground-based solutions. "While drones certainly have disruptive potential, for many firms, proven ground-based robots may be a better solution," MHI noted in its 2017 report.
One benefit of increased automation, which MHI pointed out in its 2018 report, is its ability to put robots into roles previously filled by humans. The labor pool for industrial and warehouse workers has been noticeably tight recently. When companies can't find humans to fill roles, automation may be a viable alternative, the report suggests.
But the human labor already working these jobs may present another barrier to implementation. This hurdle is what APM Terminals in Los Angeles is learning, where a labor union has organized in opposition to the company's plan to automate various aspects of the port's operations. A decision on the project was recently delayed for the second time and Gary Herrera, the union's president, put it in life or death terms, saying it was "another day we get to live," according to The Los Angeles Times.
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