What: Automated warehouses are no longer nice to have, but crucial on the long range.

Why it is important: Bots will help dealing with demand spikes and limit the need of additional workforce (and the related costs), however companies should not expect to take down human costs in warehouses as the generalisation of robots will lead to the appearance of new jobs, which will be probably better paid than today.

The Economist reviews the latest evolutions in terms of robotic warehouse equipment and their consequences. Even though robots allowed Amazon to weather the Covid-19 crisis and the hike in terms of delivery, there were not enough to prevent the company being forced to have temporary workers in addition to its fleet (leading to increased spending in pay in order to attract them). In other words, McKinsey mentions that “automation in warehousing is not longer just nice to have but an imperative for sustainable growth”.

As a corollary consequence, not only more machines are needed, but more specialized ones too, or responding to new specifications. For instance, Ocado has developed the 600 Series, almost entirely build with 3D-printed pieces, decreasing its overall cost of production and weight, thus increasing its battery time. 600 series units operate in closed areas, known as “hives” and their new fabrication method allows such hives to be built in weeks, not months, at a lower cost, paving the way for city centre local fulfilment units.

Amazon on its side is refining its historical Kiva robot and upgrading it to pack more goods and be more efficient in smaller fulfilment centres. Exotec, a competitor, has developed “Skypods”, robots able to crawl along 12m up the shelves, maximizing the space value. They already equip Carrefour, The Gap, and Uniqlo.

Of course, such robots are designed to work in close circuit. Whenever robots need to be working alongside humans, new specifications and new security measures are to be implemented, sometimes leading to less efficiency and increased cost.

According to The Economist, this is an ongoing revolution which will have significant consequences in terms of job opportunities, however this shall not be seen negatively, as, and previous evolutions in the industry showed it, this new industry will give birth to new skills needed and new jobs. For instance, once telephone switchboards got automated, all operator jobs disappeared, but in the long run the number of jobs in the telecom industry soared.

The bots taking over the warehouse