Robotics – what next?
25 October 2023
With robotics and automation on a trajectory of growth in intralogistics, the need for interoperability of solutions from different vendors is pressing, argues Dave Berridge.
THE DEMAND for intralogistics robots and automation is, of course, impacted by the amount of warehouse construction. With excess capacity having been constructed during the pandemic, slowing growth in e-commerce, high interest rates and a global economic slowdown, the rate of warehouse construction has seen a fall, particularly for fulfilment centres. Earlier this year, research firm Interact Analysis predicted a reduction of 35% in the number of new warehouses added globally this year compared to 2022.
With end-to-end automation solutions typically associated with greenfield sites, this fall in warehouse construction has led to a decline in fixed automation projects. This means lower demand for ‘shelf-to-person’ robots. However, this building slowdown is predicted to be temporary, with warehouse construction expected to revive by 2025.
The automated mobile robot (AMR) market, meanwhile, continues to enjoy strong growth, driven by labour availability issues and a focus on improving the efficiency of brownfield sites while greenfield investments are tending to be on hold. Demand has also been bolstered by the trend for onshoring of manufacturing and the predilection of third-party logistics (3PL) providers for AMRs.
The simple fact is that mobile robots are very attractive to warehouse operators who cannot recruit sufficient staff and while wages are increasing rapidly. Companies report softer benefits too, such as higher staff retention through enhanced employee satisfaction, due to the fact that AMRs can reduce the amount they need to walk by more than half. Interact Analysis found that mobile robot shipments grew by 53% in 2022 and forecasts that an annual growth rate of around 50% will persist until 2027. By the end of that year, the firm predicts that over four million AMRs will be installed worldwide. Despite this, only 14% of warehouses will have deployed at least one order-fulfilment AMR by 2027, showing that the market potential is vast.
Although demand for fixed warehouse automation is currently impacted by the fall in warehouse construction projects, the longer-term picture is much brighter. A report by Interact Analysis in May predicted that no less than 26% of warehouses will be automated by 2027, up from 14% in 2017 and 18% in 2021. And research by Gartner earlier this year predicted that 50% of large enterprises will have adopted intralogistics smart robots (ISR) in their warehouse or manufacturing operations by 2028. In the Gartner 2022 Supply Chain Technology User Wants and Needs Survey – which questioned various industries, company sizes and geographies – 59% of respondents said that labour availability issues were leading them to consider automation. In addition to labour shortages, global growth in e-commerce will be a key factor. Online sales worldwide are forecast to more than double in the years 2022 to 2027. This will increase warehouse construction rates – particularly for direct-to-consumer fulfilment centres, which will require considerable automation. The growth of e-com will have a huge impact due to the 24/7 nature of its operations, with multiple shifts. Companies with two- and three-shift operations will naturally adopt robotic automation faster, as the ROI is better.
As well as more AMRs, this warehouse automation is expected to feature many more picking robots. The market for robotic picking was worth $236 million in 2022, but is forecast to grow to $6.8 billion by 2030, with annual shipments rising from less than 2,000 to just over 50,000 over that period (Interact Analysis). As well as labour shortages and, consequently, higher wage costs in warehouses, the rapid pace of development in AI and machine vision technology will combine with falling robot costs to drive the trend towards robotic picking. The average price of picking robots is expected to fall by 40% by 2030, while the cost of warehouse labour will rise by around 30% over the same period, according to Interact Analysis. The research firm also predicts that the number of full-time equivalent (FTE) employees needed to supervise these robots will fall, with one FTE person for every 3-5 robots now becoming one FTE for 7-10 robots by 2030, further improving the ROI.
Today, robots are in involved in many logistics tasks, from vehicle unloading and depalletising to put-away, picking, sortation, replenishment, packing and shipping. With various types of robot – such as AMRs, picking robots, shuttles in an ASRS and robotic put-walls – potentially operating in a single warehouse, the elephant in the room is interoperability. Often, robots of different types do not interface with each other. There is a need for heterogeneous robotic integration (HRI) software solutions that can orchestrate the work of heterogeneous robots in a vendor-agnostic way. These solutions will assign work among the robots and enable communication between different robot and automation platforms. Gartner predicts that more than 50% of companies deploying intralogistics robots will adopt a multi-agent orchestration platform by 2026.
Allowing for interoperability will be key to future-proofing robotics and automation over the next few years, especially since consolidation of the AMR market seems unlikely. Despite numerous acquisitions in the AMR space and some smaller players exiting, the emergence of new vendors each year means the market is not consolidating.
What is clear is that, as robotics in intralogistics continues on its growth trajectory, there will be huge demand for robot programmers in coming years. The industry needs to recruit and train high numbers of robotics engineers if we are to avoid labour shortages being the bottleneck to growth in this market. Part of the solution could lie with robot manufacturers, as they have traditionally supplied the logistics sector with industrial robots that are specified for the much higher demands of the automotive industry. These robots tend to have extremely precise capabilities that are not generally required for warehouse picking operations and which make them overly expensive.
Dave Berridge, secretary, Automated Material Handling Systems Association (AMHSA)