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MHI SOLUTIONS COMMUNITY: The Case for Flexible Automation

* By John Paxton *

For managers of warehouses and distribution centers, the nation’s 3.5% unemployment rate heading into peak ordering season seems downright unfair. Attracting high-quality employees is exceedingly difficult nowadays, and with a wealth of job opportunities available, workers are ready to jump ship if they can make an extra dollar an hour at the company down the street. In some cases, promising new hires are out the door before they have been fully trained and have made an impact on operations.

Thankfully, collaborative robots, mobile sorters and other flexible automation solutions have no career aspirations. When their improved functionality and declining costs are factored in, they provide an attractive solution for fulfillment centers and other industrial facilities that are struggling to put enough boots on the ground.

Some companies have been reticent to invest in bolted-down automation systems because any number of business factors—including a change in inventory profile, rapid growth in consumer demand or a sharp increase in the number of SKUs—could render that expensive equipment essentially useless, said Rupesh Narkar, director of sales, consumer goods in the Americas for MHI member Swisslog Logistics Inc. But there are now state-of-the-art flexible automation solutions that allow companies to adjust to changing business conditions quickly, which helps to justify the cost of investment in automation.

“When customers go for automation, they usually base it on long-term strategic business goals,” Narkar said. “The problem is that those goals change and, eventually, they get stuck in the invested automation setup. It cannot be repurposed easily without a major expense. Most of the time, the expected ROI for automation is three to five years and, nowadays, because the business dynamics change a lot during those three to five years, the existing automation setup is not able to pay back the investment.

“A flexible automation system, even when the business scenario changes, can be repurposed and accommodated in the same facility by rearranging the setup in a fairly inexpensive way. Now, you have eliminated the risk of putting your capital into something that is inflexible and will not serve the long-term goals.”

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This issue of MHI Solutions tackles the important topic of digital technologies in the supply chain industry, especially as it relates the transportation and logistics. Transportation plays a central role in supply chains, whether they are local or global enterprises. And just like the overall supply chain, transportation is facing a digital revolution including new solutions for tracking road, rail, sea and air freight and parcel transportation. These digital technologies are disrupting the industry, but they are also providing im-portant new solutions for transportation inefficiencies and urban logistics challenges. They are also creating new digital business models that enhance transparency and sustainability and contribute to end-to-end supply chain visibility. Like the innovations impacting supply chains, these trends are being driven by the growth of e-commerce and the consumers’ never-ending need for better, faster and cheaper. Ignoring them is done at your own peril.

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