Warehouse automation

Automation is at the forefront of many supply chain strategies as logistics companies re-evaluate and strategize their warehouse networks amid a tougher market environment.

“So, as you can imagine, when volumes are a little bit less growth-y, as we've seen through the second half of last year, that's quite often a catalyst for a company to turn around and look at its operations,” GXO Logistics SVP of Strategy and Investments Neil Shelton told Supply Chain Dive in an interview. “The problems of supply chain challenges, wage inflation and supply chain inflation on the whole — that's common across pretty much every industry.” 

But there isn’t one all-reigning solution. Automations partnerships need to be strategic for successful integration and execution.

The best breed of solutions are piloted and deployed based on customer need and fit, DHL Supply Chain VP of Operations Development Omer Rashid told Supply Chain Dive in an email interview.

“We want to leverage digital technology to make our associates’ jobs easier, safer and more fulfilling,” Rashid said. “We also want to access and harness the data from these technologies to bring insights for our customers who can then make informed decisions.”

Evaluating intentional partnerships

The supply chain management industry is currently experiencing a “flywheel effect” between outsourcing and automation, GXO’s Chief Automation Officer Adrian Stoch said during a Feb. 14 earnings call, leading to several strategic, but critically considered, partnerships.

“The need for enterprise digital transformation is leading organizations to re-examine their entire supply chains, because they understand that they need to go through this re-examination to stay competitive for today and increase resilience for the long-term,” Stoch told analysts.

GXO, for instance, has been exploring artificial intelligence applications for several clients to boost warehouse efficiency. Earlier in 2024, the logistics provider partnered with robotics developer Dexterity to streamline operations, like product labeling, for an unnamed beauty brand. GXO also doubled its use of warehouse vision tech in 2023 to reduce errors.

Technology is also a critical part of DHL Supply Chain’s digitalization strategy, which includes 12 focus technologies, Rashid said. For each focus, the logistics company collaborates with partners to co-develop tech for specific use cases that target challenges like unproductive tasks, hard or difficult activities, high-volume peaks and order profile variances.

Use cases for DHL are those that can be scaled across its warehouse network. The company tests, evaluates and develops technology as a proof of concept. Once the solution is successfully piloted, DHL productizes it for scaling, Rashid said.

In February, DHL Supply Chain secured a partnership with Robust.AI for the pilot and deployment of ‘Carter,’ a robot that offers flexible warehouse material handling. In 2023, DHL Supply Chain extended its partnership with AutoStore, an automated storage and retrieval system used for managing and optimizing inventory.

Rashid added that the company is always looking for new opportunities to collaborate with developers, as there are “numerous use cases in the warehouse that would be ideal for automation such as pallet picking.”

“To date, we have found great success with assisted picking robots, autonomous forklifts, unloading robotic arms, mobile sortation solutions and augmented vision picking devices, to name a few,” he said. 

The role of automation in customer needs

Customer and supplier needs remain the focus of warehouse automation efforts, Rashid said.

In 2023, a significant portion of GXO’s annual contracted revenues came from first-time outsourcing. Shelton partly attributed the increase to growing technology needs, noting that the “supplier base is really looking for someone to act as a guide through what is the right form of technology to deliver the predictability and the performance that our customers are looking for.”

But depending on what type of goods a facility handles, some benefit better from certain partnerships than others, according to Rashid.

For instance, sectors that depend on critical parts and 100% order fill, like spare parts of pharmaceuticals, benefit from tech focused on productivity, inventory visibility and accuracy, he explained. High volume retail or CPG warehouses can justify large scale automation, while e-commerce facilities benefit from order processing solutions.

DHL Supply Chain, specifically, uses tech to solve material handling challenges, which boils down to moving pallets and cases, he added.

Rashid advises supply chain mangers looking to assess their warehouse partnerships:

• Embrace technology and new ways of working
• Understand which partners share the same values and are focused on solving problems versus those who are looking for a home for technology they already have
• Understand that new solutions will not always work as planned and will need close collaboration with your technology partner to evaluate, improve and consistently evolve
• Do not underestimate change management

“The integration of AI and data quality into warehouse optimization is going to be the next big evolution in warehousing,” Rashid said. “Being partner agnostic and being able to bring and orchestrate best of breed solutions and use cases together will provide the best value.”

MANIFEST VEGAS 2024 — Schneider Electric leveraged artificial intelligence and machine learning technology to eliminate maintenance issues at its automated smart factory in Kentucky, Kenneth Engel, SVP of internet giants at the company, said at the Manifest Vegas 2024 conference.

Schneider had put in a mile-long overhead conveyor system above the manufacturing operations to replace trucks that were previously used inside the factory. The new system has 1,700 chain links and hooks that move the products and materials from one place to the next, and is equipped with radio frequency identification technology to help accurately move several thousand SKUs.

“Jams happen because, as you might imagine, the factory has several transfer points where there’s handoffs from one hook to another hook,” Engel said. “So, the biggest problem that we had was to figure out how to stop the chain breaks and be more predictive with that.”

The company used AI and machine learning to determine where to put sensors in an overhead conveyor system, partly by analyzing the system’s digital twin.

The digital automation and energy management specialist used its company-owned Aveva software to notify an employee when there might be a problem or if the chain breaks, Engel noted.

“And it’s working,” he added. “We’ve eliminated the problem completely through the use of AI and machine learning.”

Schneider Electric’s 5,000 square-foot automated Lexington, Kentucky, factory takes in sheets of foil and transforms them into products. More specifically, the site manufactures load centers with circuit breakers and commercial safety switches, Engel said.

Products also move from the smart factory straight to the warehouse and are ordered on a “real time basis.” Schneider used technologies like AI and machine learning to enhance efficiency in its operations. In turn, this example has saved the company hundreds of thousands of dollars of labor in addition to time and delivery performance to Schneider’s customers, Engel said.

Dive Brief:

• GXO increased its overall units of warehouse automation in 2023 by 50% — this includes doubling its use of vision technology, according to a Q4 earnings call.
• Vision technology optimizes order validation and minimizes errors, and it can be rolled out across various operations in different verticals without significant investment, Chief Automation Officer Adrian Stoch told analysts on Feb. 14.
• The warehouse logistics company is looking for other practical applications of artificial intelligence in its existing operations and has piloted solutions for pick productivity and workforce management, Stoch said.

Dive Insight:

Warehouse providers, retailers and other stakeholders have been leveraging AI and machine learning to tighten operations in a bid to improve productivity, trim costs and boost employee retention.

The last few months have shown various ways the industry is implementing AI and other automated tech. In February, for instance, Staples deployed piece-picking robots in its fulfillment centers to help automate operations. In 2023, logistics provider DHL Supply Chain announced plans to open four more automated warehouses as it digitizes its global warehousing operations to increase efficiency.

Similarly, GXO’s automated solutions aim to improve service and lower costs for its customers, CEO Malcolm Wilson said in the earnings call. In 2023, the logistics company trialed new hardware and software solutions like humanoids, AI-powered robotics and autonomous vehicles, setting an all-time volume record at two of its primarily automated sites.

Chief Strategy Officer Neil Shelton told Supply Chain Dive in an interview that GXO's supplier base is looking for a company to “act as a guide” for identifying the best technology to boost productivity and ROI.

“A lot of companies [have] been talking about supply chain challenges reguarly now for the past few years — there’s been a much greater focus,” Shelton said. “What we’re seeing is companies making more strategic decisions to partner with someone who just focuses on that warehouse solution.”

Machine-vision technology is touchless and helps increase productivity, speed, accuracy and safety during data-gathering tasks in warehouses, according to GXO’s website. Implementations and pilots include wearable machine-vision tech like eyewear and gloves, as well as code scanners and other fixed-mount devices.

“I think a good way to think about technology is that it helps to drive a tremendous uplift in the performance of our solutions,” Shelton told Supply Chain Dive. “It clearly drives tremendous efficiency; it helps to drive a tremendous improvement in the accuracy, in performance, [and] in the predictability.”

Dive Brief:

• Kroger plans to install new Ocado Group technology focused on efficiency and labor productivity into a number of its automated customer fulfillment centers (CFC) currently in operation as well as future ones, according to a July 22 announcement. 
• The technologies slated for implementation include On-Grid Robotic Pick and Automated Frameload.
• The announcement comes during a lull in Kroger and Ocado’s partnership following Kroger’s announcement in September 2023 that it slowed its rollout of automated fulfillment centers with the British firm.

Dive Insight:

With the latest move, Kroger and Ocado are signaling that their partnership is seeking to bolster the economics of their network of e-commerce fulfillment sites, with the announcement noting that the addition of the technologies aim to “further drive down [Kroger’s] cost to serve from CFCs.” 

Ocado’s On-Grid Robotic Pick is a robotic arm installed on the automated fulfillment grid that packs bags with items deposited by bots that also operate on the grid, according to the announcement. Ocado’s robotic arm technology is equipped with advanced machine vision, reinforcement learning and sensing capabilities that allow it to pick tens of thousands of products and pack them into bags with “precision and accuracy.” 

Ocado has already introduced this capability to distribution networks outside of the U.S., noting that at full capacity, the On-Grid Robotic Pick can pick over 70% of an extensive online grocery range.

Meanwhile, Ocado’s Automated Frameload technology automates the physically demanding task of loading prepared customer orders onto delivery frames, eliminating the need for workers. Automated Frameload’s “computer vision examines the tote and the frame, forms an understanding of the dimensions and shape of the tote and enables alignment with the frame, making direction adjustments in real time to push the tote in,” according to the press release. 

In 2018, Kroger and Ocado announced their exclusive agreement to bring the British e-grocer’s automated fulfillment capabilities to the U.S. and help the grocery company ramp up its competitive edge in the growing e-commerce market. 

Kroger committed to opening 11 CFCs with Ocado by the end of 2022, but has announced the opening of eight so far with three others planned. 

Last September, Kroger Chairman and CEO Rodney McMullen told investors the grocer planned to hold off on building new e-commerce sites with Ocado “until we make sure that we have a clear path on the ones we have.” The news came as grocers were grappling with fluctuating e-commerce sales on the heels of rapid growth during the early pandemic years. Nearly nine months after announcing it would pull back on the rollout of CFCs, Kroger shuttered three spoke facilities as part of its e-commerce hub-and-spoke network with Ocado.

The latest announcement about installing new technology and capabilities signals Kroger’s work with Ocado is far from done, however.

Dive Brief:

• Switzerland-based sportswear brand On is working with artificial intelligence and robotics manufacturer Verity to increase inventory visibility in its fulfillment operations, according to a June 13 press release.
• On will use Verity’s warehouse drones to bring real-time inventory tracking to its warehouse operations and stock management in an effort to minimize stockouts, misplacements and overall shrinkage across its supply chain.
• The technology is already live at one U.S. facility, which is the first step of the partnership's larger plan, a Verity spokesperson told Supply Chain Dive in an email. The spokesperson declined to share how many facilities at which the tech will eventually be used.

Dive Insight:

On aims to leverage technology in its supply chain to support company growth, according to the press release. If the drones can improve product availability at its physical and online stores, the retailer believes autonomous inventory checks will maximize order fulfillment by improving on-time and accurate delivery.

Drone deployment in the facility is the first step in On’s larger supply chain strategy, the spokesperson said. The two companies are working on more opportunities to further streamline operations and inventory management.

“There is [a] roadmap for the partnership, and the US facility is a first step,” the spokesperson said. “And certainly, there is value in deploying this to a larger scale. [On] can’t disclose any plans or numbers right now.”

Warehouse drones have been gaining momentum for several years and serve as support for other facility technologies, such as sensors and network optimization. Companies have also been piloting and implementing warehouse drones in an effort to more accurately and efficiently process inventory intake.

For example, shipping giant Maersk tapped Verity in 2023 to help shippers keep better track of inventory. In practice, the drones take photos of SKUs on pallets to autonomously track possible inventory errors. The information is then condensed to provide insight for shippers.

Dive Brief:

• Sportsman’s Warehouse recently developed a merchandising assortment and planning software system with supply chain solutions software company Blue Yonder to strengthen its inventory management strategy, CEO Paul Stone said in an April 3 earnings call.
• Since implementing the tool, the retailer has improved its inventory management capabilities, store planogramming, seasonal regional auto replenishment and improved in-stock and productivity reporting, Stone said.
• The tech will offer “key” tools for merchants as the company looks to be “more in tune” with inventory trends, Riley Timmer, VP of investor relations, told analysts during the call.

Dive Insight:

The retailer has been focusing on its inventory management strategy as it looks to reduce stock levels. The partnership with Blue Yonder is part of that plan as it aims to put Sportsman’s Warehouse in a better position regarding product assortment and inventory allocation, Timmer said.

“While we made good progress during the fourth quarter, we will continue to closely manage our inventory levels and merch mix,” Stone said. “This will ensure we have the right products in the right location at the right time, creating inventory efficiency which allows us to better service our customers and improve our overall merchandise productivity.”

As part of those efforts, Sportsman’s Warehouse also made significant SKU cuts in Q4 and refined product assortments to improve inventory productivity.

Stone also noted that the Blue Yonder technology will help facilitate the expansion of the company’s omnichannel capabilities.

Sportsman’s Warehouse is eyeing further optimization through other tech investments, including a workforce management software, Stone added.

“This tool will allow us to officially staff our stores and be closer aligned with the peak hours of customer business,” the CEO said. The retailer did not further elaborate on the investment and did not immediately respond to a request for comment.

Retailers have been looking to tame their stock levels following 2022’s inventory tidal wave. Many companies worked to trim inventory levels and increase their demand planning capabilities in 2023 as a way to enhance efficiency, unclutter facilities and lower costs.

Retailers finally saw the fruits of their labor in the second half of 2023 — Q3 2023 was the first time since the pandemic that retail and apparel growth outpaced inventory. That quarter, inventories across retail sectors were nearly 8% lower year over year.

Dive Brief:

• Staples has deployed piece-picking robots from RightHand Robotics across its fulfillment centers in North America to automate its operations, Brendon Bielat, VP of product and marketing at RightHand, told Supply Chain Dive in an email.
• The autonomous robotic arm uses AI and machine learning to suction and grip items with various shapes, sizes, weights and packaging, Amit Kalra, EVP and supply chain officer at Staples, said in a LinkedIn post.
• The technology is already live in multiple fulfillment centers in Staples’ network with more rollouts set to happen, Kalra said. The company did not disclose specific locations.

Dive Insight:

Over the past three years, Staples and RightHand worked together to expand the capabilities of the RightPick system — from handling a wide range of items such as markers to containers of coffee or reams of paper, Bielat told Supply Chain Dive.

A combination of advancements were made to the entire picking system, Bielat added. There were “enhancements to the machine vision system, RightPick AI, new picking and grasping strategies used by the RightPick system, and advanced multipick and exception handling to ensure picking accuracy.”

These new features have doubled the range of items that the RightPick system can handle and reduced the required interventions by 80%, according to the release.

Staples is also using the technology as a way to add efficiency to its operations even while the robots are not actively picking items.

“When the arms are not picking orders for our customers, they are picking thousands of items to practice, learn and perfect the picking approach for new items, just like a human would learn,” Kalra said in the LinkedIn post.

While the retailer has been actively working to offer shorter delivery-times to its customers, the RightPick system is expected to help Staples offer next-day delivery to over 98% of the U.S., according to the release.

In August 2023, Staples partnered with DoorDash to offer deliveries from nearly 1,000 U.S. stores for same-day delivery in under an hour on average. In 2020 the company also offered same-day delivery with Instacart.

Dive Brief:

• Southern Glazer's Wine and Spirits will deploy Symbotic’s AI technology and robotics warehouse automation in select distribution centers, according to a Nov. 15 press release.
• The distribution centers will be equipped with the Symbotic System, an end-to-end automation system with robotic case-picking capabilities. The technology is expected to improve fill rates, order accuracy and increase capacity of its existing facilities.
• Both companies have agreed to implement the first of these systems by 2025, per the release. The alcohol distributor has warehouses located across 44 U.S. states, the District of Columbia and Canada.

Dive Insight:

Until now, Symbotic focused on deploying its technology and robotics solutions in retail or food wholesale operations. The Southern Glazer's agreement marks the robotics company's debut in the beverage space, Mike Dunn, Symbotic's SVP of sales, marketing and product strategy, told Supply Chain Dive.

Warehouse automation that handles beverages is different compared to other wholesale items. Products in the beverage industry can be heavy, bulky and contain an awkward center of gravity, making automated product handling a challenge, Dunn said.

"Through the system, Symbotic will build mixed-case pallets for efficient-route stop delivery and more efficiently and accurately handle both high velocity and slow-moving inventory,” Dunn added.

Multiple companies have deployed Symbotic's software and robotics to speed throughput, boost inventory accuracy and streamline operations.

United Natural Foods plans to add Symbotic’s AI technology in five of its distribution centers, Walmart announced plans to bring Symbotic to 25 of its regional distribution centers in July 2021 and Associated Foods also deployed its automated warehouse system at a distribution facility in Utah.

Southern Glazer's Wines and Spirits isn't new when it comes to using warehouse automation. In 2018, the alcohol distributor highlighted upgrades it made at a New York facility. The upgrades included a conveyor and sortation system, a bottle pick room — a two-level, voice-directed, split-case picking operation — and a warehouse management system.

Symbotic is displacing Southern Glazer’s current warehouse automation provider KNAPP on slower-moving inventory, according to a Nov. 15 research report from William Blair analysts.

Dive Brief:

• Pitney Bowes is using a new parcel induction and sortation system from Ambi Robotics at e-commerce hubs to boost sorting speeds to middle-mile delivery providers, the companies announced Oct. 10.
• Pitney Bowes has deployed four of the AmbiSort B-Series systems in its network so far, Stephanie Cannon, Pitney Bowes' SVP of operations excellence and collaborative innovation, said in an interview. The shipping and mailing company's Monroe Township, New Jersey, facility and Ontario, California, hub each have two systems.
• "They've only been deployed for about four months now, and we're over 3 million parcels already in terms of their sortation volume," Ambi Robotics CEO Jim Liefer said in an interview about Pitney Bowes’ operations.

Dive Insight:

The B-Series deployment adds another milestone to Pitney Bowes and Ambi Robotics’ ongoing partnership.

Pitney Bowes announced plans in 2021 to use automated parcel sorting systems from Ambi Robotics for its Global Ecommerce business. After a successful deployment at a Stockton, California, facility, the two companies launched a $23 million expansion plan in 2022 to install last-mile sortation systems at hubs throughout the U.S.

The new Ambi Robotics system using robotic arms allows Pitney Bowes to reduce its reliance on manual labor for sortation in its middle-mile operations, or the process of moving parcels from one facility to another.

While a human sorter can handle around 275 to 300 parcels an hour, the B-Series sorts about 1,250 parcels per hour for Pitney Bowes, Cannon said. This helps Pitney Bowes move parcels out of its facilities and onto trucks faster while minimizing sortation mishaps.

"When a manual sortation happens, they have the opportunity to mis-sort those parcels," Cannon said. "A robot, when it's inducting it through an automated process, will be less likely to mis-sort that parcel, so we have better service to the customers there."

Ambi Robotics customers can configure the B-Series system to fit their specific sorting needs. For example, they can add more induction cells to increase throughput or expand the number of destinations to boost capacity, according to a June news release from Ambi Robotics.

The system can also adapt to use cases such as interfacility sortation, zone skipping and reverse logistics, which will come in handy during the post-holidays returns rush.

"We're coming into holiday right now, and then just on the other side of that peak, the volume shifts over to the returns side," Liefer said. "We're happy to have that kind of modularity for the system."

Dive Brief:

• CEVA Logistics announced Oct. 12 it will deploy Boston Dynamics' Stretch robot at a newly opened transload facility in Los Angeles as it focuses on the site’s velocity.
• The Stretch robot is able to unload hundreds of boxes per hour, reach boxes up to 50 pounds in weight and its vision system allows it to adapt to various stacking configurations, Kevin Blankespoor, senior vice president and general manager of warehouse robotics at Boston Dynamics, said in a statement.
• The logistics company expects to process a total of 26,000 floor-loaded containers during the facility's first year in operation, according to the release. Within three years, the company expects to double its capacity.

Dive Insight:

CEVA Logistics is doubling down on automation to advance its sorting processes and operations at its 135,000 square-foot warehouse in Los Angeles, which caters to automotive, consumer retail and technology companies.

Besides deploying robots from Boston Dynamics, the company already uses a cross-belt sortation device enabling 10,000 parcels to be sorted every hour. The sortation device can sort parcels by size, color or preferred carrier.

Adding to the automation, the facility is equipped with One Network’s yard and warehouse management systems, and CEVA will also use Boston Dynamics' Spot robot to patrol the site for security.

CEVA's use of the Stretch robot, which can operate continuously, will help it improve safety and efficiency compared to manual labor, the company said in the release.

Boston Dynamics rolled out its Stretch robot back in 2021, aimed at making the process of unloading trucks more efficient for workers. Since then, Maersk, DHL and NFI have all announced plans to add the robot in their warehouses.