Accessible automation – get in on the discussion

LOGISTICS MATTERS: What opportunities do you see for automation in the warehouse?

John Wilson: A good way to explain the opportunities in automation is by looking at how it has evolved in supply chain. Traditionally, large-scale automation projects have been adopted by big organisations. They are able to sign off significant CAPEX to deliver return on investment over longer periods, something smaller companies may have struggled to get signed off. 

Fast forward to the last 12 to 18 months – adaptive tech has grown in popularity, especially AMRs and robotics. These tend to be entry-level tech that are modular and require little infrastructure, and so can be implemented where they’re needed, when they’re needed. In the current macro-environment, there are greater opportunities for adaptive tech as they tend to have low to no upfront costs, faster ROI and are transferable across sites. We do not see this trend slowing down, and with further advancements in AI in parallel, I am sure there will be more opportunities to come for automation in the warehouse. 

LM: Do you see an opportunity for Pay-Per-Pick models in warehouse automation? 

JW: Definitely. As customer needs continue to change, several innovative commercial models have emerged. Traditional automation is still in demand, but so are models like Pay-as-you-Go, Robots as a Service (RaaS) and Value-in-Use. The Pay-as-you-Go or Pay-per-Pick model acts like a mobile phone contract where payment is defined per unit handled, taking full account of service and maintenance costs. There is a daily or monthly minimum threshold for units processed, but these are bespoke and adjusted to a customers’ operational size and needs. 

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The model increases customers’ access to warehouse automation solutions, as it allows them to work out their cost-per-unit at a level of granularity they have not been able to before, allowing them to easily see the value of the investment. It is particularly beneficial for SMEs as it allows them to deploy tech without upfront costs. 

LM: If companies are interested in automation, but have concerns about funding implementations or perceived complexity, what advice do you have?  

JW: New commercial models have emerged to make warehouse automation more modular and accessible – and I am confident that more will come. My advice is to take the time to learn what is being offered out there and shop around. Given the rapid pace of innovation, potential customers are rarely short of options and these are usually flexible and transferable. Traditional commercial models need to compete with newer, more agile ones, so we have seen combinations of Capex, Opex, Robots as a Service (RaaS) and Value-in-Use working quite well for businesses.

It is equally important for businesses to be able to rely on a knowledgeable partner when shopping around for technologies. GXO, for instance, works with some of the world’s leading companies as well as promising SMEs that are scaling up, so we understand the challenges and opportunities our customers face. We can identify the most advanced and efficient technologies with the best suppliers in the market, utilising economies of scale to increase cost efficiencies. We manage automation projects on behalf of our customers, guiding them with our expertise and experience to make the process as simple and accessible as possible.