Back when Mike Tyson was the king of the ring, he famously said of his overmatched opponents, “Everyone has a plan until they get punched in the mouth.” In the past few years, shippers have experienced something similar, with powerful body blows forcing them to abandon their game plans.
Prior to the pandemic, many shippers had long-term plans for introducing automation into their warehouses, distribution centers, fulfillment centers and manufacturing plants. But COVID-19, a persistent labor shortage, rising wages, employee turnover, increasing order volume, SKU proliferation, consumer demand for fast delivery and high costs for raw materials have all conspired against them.
“Everyone had a plan, and that plan got thrown out the window, or it’s being greatly accelerated,” said Seth Carlson, industry specialist for material handling and logistics at MHI member Banner Engineering.
As a result, shippers are realizing that the time to automate is right now. Those who delay risk alienating customers with slow service, eroding profit margins and failing to execute on their growth strategies.
“If you don’t automate now, you’re going to find yourself seriously behind the eight ball, and it’ll be tough to catch up,” said Lisa Minerd, vice president of system design and implementation for MHI member Ascent Warehouse Logistics. “The labor shortage isn’t going away, so that just supports the idea that automation is the key to growth and the key to success.
“There are a lot of reasons people aren’t automating, but none of them are really good,” she added. “They’re actually rather shortsighted.”
In the face of these challenges, shippers are becoming more receptive to automated material handling solutions, with the usual objections beginning to recede. The clichés that “we’ve always done it this way” and “if it isn’t broken, why fix it?” break down when business executives consider how they’ll deal with a 15% to 30% increase in projected demand while struggling to find sufficient labor, according to John M. Hill, director of MHI Member St. Onge Co.