Proving the Business Case for the Internet of Things

Remote robots inevitable as warehouses grow in size

William Payne
October 21, 2015

Robots and industrial scale automation will become inevitable as warehouses become ever larger as a result of increasing global trade and the impact of e-commerce according to a report by Colliers International.

The sheer size and scale of future warehouses as well as lighting and space considerations together with the need to accelerate the flow of goods through increasingly complex warehousing structures will make free  moving robots interconnected to central servers by WiFi both a more economic and also a safer option than expanding the number of human operators.

Such a development would necessarily entail the expansion in the use of M2M and Internet of Things technologies both within warehouses and across the whole logistics value chain.

According to Colliers, changes in the logistics industry are also requiring far greater agility and flexibility in how logistics operators manage their operations. With third party logistics operators experiencing more growth and under market pressure both to add value to their supply chain operations and minimise cost, both large scale and operational adaptability will be at a premium. Large food and supermarket retailers are under much the same pressure, with both seasonal fluctuations and marketing led campaigns requiring rapid shifts in stocking and warehouse optimisation strategies.

Both e-commerce and bricks and mortar operations appear to be converging on a point  where large or mega scale automated and connected warehousing is a solution to both cost and speed of throughput challenges in retail logistics.

According to Nerida Conisbee, research director with Colliers: “The biggest challenge for e-commerce .. is the cost of getting goods from the warehouse to consumers. The vast distances that need to be covered and the insatiable demand from consumers to get goods quickly can make delivering goods particularly expensive. For many operators, rent on a warehouse is a secondary consideration compared to the cost of logistics.”

For bricks and mortar retailers, warehousing is also set to proliferate as well as increase in size: “Major supermarket chains previously filled online orders from a store hub but are now starting to use “dark supermarkets”; basically a supermarket in a warehouse, inaccessible to consumers, where staff fulfill online orders. The perishable nature of grocery items means that it is likely that these dark supermarkets will need to be located in each … city, as opposed to just one location.”

Major third party logistics groups such as DHL and CEVA are now building out multi warehouse centres, or campus style distribution centres, with sizes in excess of 75,000 sqm. However in Asia, 3PL logistics centres are now 150,000 sqm, with Hong Kong’s Interlink equalling 213,000 sqm and Taiwan’s Logistic Republic in Taipei comprising 264,000 sqm.

With this scale of operation, robotics, automation, and campus wide M2M connectivity over large multi building logistics centre, with a need to transfer goods between buildings as well as in and out will increasingly become necessary. At the moment, the cost of implementing automation is keeping many logistics centres still manual according to Colliers, but that is likely to change as scale increases, and connected and robotic technologies mature.