MHI Solutions Improving Supply Chain Performance
BY , MARKETING COMMUNICATIONS COORDINATOR, MHIWarehouses have long served as test labs for automation. In 1962, MHI member Demag installed the first automated storage and retrieval system at a book club warehouse in Germany. From there, innovation led to the complex Warehouse Management Systems that rule facilities today. As we careen into the Artificial Intelligence (AI) revolution, warehouse workers will once again be among the first to witness technological disruption.
Although there are fears that automation will lead to job loss, current research suggests that AI in warehouses and distribution centers is likely to facilitate job transition. If firms embrace reskilling and upskilling, they can improve existing employees’ roles, bolster morale and spur new, higher-value jobs.
A Worker Shortage is Driving AI Adoption
Warehouse and distribution center workers have co-existed with robotic arms and autonomous vehicles for decades, but the rising crop of AI-powered automation is game-changing. Equipped with sensors that process data, these robots can respond to data in real-time. For example, instead of sticking to a set path, robots using AI can move to avoid colliding with a human.
MHI member Agility Robotics is one of the companies that has harnessed AI to produce robots. The company broke ground on the world’s first humanoid robot factory in Salem, Oregon in 2022. The factory will produce thousands of robots annually named “Digit” that are designed for tote-based material handling applications. Melonee Wise, Agility Robotics CTO, said that Digit can help facilities streamline the process for moving materials from one automated system to another. “The mutual transfer of containers has yet to be automated. Digit is a great connective piece because it can help fix those gaps and remove islands of automation,” Wise stated.
In addition to shoring up automation islands, Wise said companies use Digit to cope with “chronic unemployment in warehousing. For the past decade, we’ve seen unfilled jobs in warehousing grow from 600,000 to close to 1,000,000. This employment gap exists—and is growing—even with all the automation that is happening,” Wise said.
RightHand Robotics, an MHI member, also cited the shrinking labor pool as a catalyst for companies to adopt AI. RightHand manufactures a piece-picking platform that combines AI software with intelligent grippers and machine vision. Brendon Bielat, vice president of product and marketing for RightHand Robotics, stated about demand: “It’s a perfect trifecta of cost, scarcity and turnover. Every company that we work with has at least one of those challenges…it’s just getting to a point where they can no longer keep up with demand via people.”
Although AI-automation can ease labor shortages in warehouses and distribution centers, human intelligence will remain central to operations. Bielat said that RightHand relies on feedback from experienced workers to improve its platform’s grabbing and path planning. “Customers are the experts,” he said. “We are constantly sourcing and asking for help in our roadmap and vision.”
Bielat believes that many warehouse workers will be able to transition from performing repeated, mind-numbing processes into roles that require more critical thought, such as process engineering or process improvement. “A lot of the jobs that will be created will be around thinking creatively in a way that AI isn’t able to see the full picture,” he said.
Wise echoes the notion that AI will free workers to focus on mental tasks. “Visual programming will become one of the more important skills and one that doesn’t require an advanced degree. This is a great upskilling opportunity for warehouse employees because they have experience with the tasks and understand the processes, which is crucial to training robots on what to do and what robots need to know.” Additionally, Wise predicted that the following positions will continue to grow or be created in response to AI-automation:
- Robot operations manager
- Robot service technician
- Robot deployment specialist
- AI prompt specialist
- Data collection analyst (data curation specialist)
- Model training engineer (model validation engineer)
As AI spits out an increasing amount of operations data to dashboards, workers will need greater numerical literacy. In his book, “The Magic Conveyor Belt: Supply Chains, A.I., and the Future of Work,” Yossi Sheffi, director of the MIT Center for Transportation and Logistics, writes, “Seeing the data on the smartphone is one thing, but understanding the implications of these data and taking the right action in response is entirely another. Workers and managers need a good understanding of relevant mathematical models, data analytics and the power and limitation of technological tools.”
Moving forward, Sheffi also predicts a rising need for workers who are good at dealing with customers. “As blue-collar jobs get automation, more people will work in service jobs where social skills are valued.” He described how AI will create increasingly complex consumer products, requiring companies to hire employees to work in customer service who are both technically savvy and good communicators.
David Schwebel, head of sales, corporate and strategic business development for RightHand Robotics and executive director of MHI Solutions Community, tells the story of an apparel company that, after the addition of automation, shifted many of its employees from picking to writing personal notes to customers. The company enjoyed a strong reduction in fulfillment costs due to the automation, and unexpected revenue increases due to the notes, illustrating how competitive advantages can arise when employees are allowed to be human. “The automation paved the way to a brand-new selling feature that delighted their customers. Automation unlocks workers’ capabilities and companies’ capabilities,” Schwebel said.
Given recent struggles to staff warehouses and distribution centers, there will be a reluctance to lay off employees. “It’s so shockingly difficult to find people who actually understand your supply chain, so once you have them, you should never, ever let them go,” Schwebel stated.
In addition to limiting the number of mind-numbing tasks humans must perform, AI also reduces workplace injury. For example, Wise describes how Agility’s Digit keeps people out of dangerous areas and can “take on repetitive tasks such as reaching and bending, which will save people from suffering repetitive stress injuries.” By reducing both the physical and mental toll on employees, AI can help reduce the dreaded turnover that has plagued warehouses and distribution centers.
Sustainability Efforts Will Create Jobs
Just like implementing AI is necessary for a supply chain’s survival, so is investing in sustainability. Speaking at MHI’s Annual Conference in October 2023, Gerd Leonhard, futurist and CEO of The Futures Agency, stated that companies who aren’t looking for net zero now will not exist in the future. Although there is often a perception that implementing green practices can tank a company’s balance sheet, Leonhard believes that view is shortsighted. “Green is the new digital. Every penny that is spent on this today will come back multifold,” he said.
The quest for sustainability will leave no link of a supply chain untouched. New jobs (or upskilling opportunities) will be created for people who can monitor environmental performance. There will also be a need for technicians who can work with the future green technology that will be implemented into warehouses and distribution centers.
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