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The Rise of Automation and Robotics in Warehouse Management

Chapter · October 2020

DOI: 10.1201/9781003032410-5

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 5 Rise of Automation and
Robotics in Warehouse
Management
Amandeep Dhaliwal
Manav Rachna International Institute
of Research and Studies

CONTENTS
5.1 Introduction..................................................................................................... 63
5.1.1 Why E-Commerce Businesses Adopt Automation Technologies?...... 65
5.1.2 The Technologies.................................................................................66
5.2 Advanced Technologies................................................................................... 67
5.2.1 Automated Storage and Retrieval System (ASRS or AS/RS) ............ 67
5.2.2 Goods-to-Person Technology (G2P).................................................... 68
5.2.3 Automated Guided Vehicles................................................................ 68
5.2.4 Autonomous Mobile Robots................................................................ 69
5.2.5 Articulated Robotic Arms................................................................... 70
5.2.6 Automated Guided Carts..................................................................... 70
5.3 Conclusion....................................................................................................... 70
References................................................................................................................. 71

5.1 INTRODUCTION
There has been a disruptive evolution of the retail market supported by the immense
growth of technology, smartphones, and smart devices. It has changed the way people
purchase goods nowadays. Online shopping and transactions have been on a steady
rise. Customers are much more demanding and looking for instant ­gratification by
ordering and expecting delivery as soon as possible. A report by 10 e-commerce
trends found that presently 10% of U.S. retail sales are online, while 56% of ­in-store
purchases are again e-commerce/digital-influenced. Online sales are expected to
grow by nearly 15% annually. What this means is that just having a ­brick-and-­mortar
store would not mean survival without the presence of online, which is slowly
­becoming the customers’ preferred channel. The retailers’ ­understanding of these
changing trends has integrated digital e-commerce in all aspects. This has further

63

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 64 Transforming Management Using Artificial Intelligence Techniques

changed the way goods are distributed from distribution centers to customers. To meet
the ­ever-changing expectations of customers, the world of logistics and w ­ arehouse
management is constantly evolving and changing. “Globalization has caused many
supply chains to be visible to automation and several other technologies (big data
(Agrawal Rashmi 2020), robotics, artificial intelligence, 3D printing, and so forth).
The shift towards creating a new intelligence is now being witnessed over several
fields” (Lorentz & Hilmola, 2012).
The rise of e-business leads to the growth of new and innovative business ­models.
Supply chain professionals of the present day are dealing with ­“omni-channel
­retailing”, “complex global supply chains and consignment inventory” (Da Silveira &
Cagliano, 2006). Therefore, the e-commerce companies are making major
­investments in adopting robotics and automation-based supply chain ­technology.
There is an internal pressure of increasing throughput, handling of greater vol-
umes of inventory while cutting costs, reducing inventory cycles, and maximizing
­productivity; at the same time, they have to meet the c­ ustomers’ expectations such
as faster delivery by next day shipping, commoditization as well as Amazon effect.
The immense growth of the online business has forced that warehousing to adopt
advanced technologies in order to solve challenges of real-time tracking, process-
ing, and on-time delivery of packages more effectively. This is where automation
steps in to help meet the demands of online retailers or “e-­retailers”. Online retailers
are nowadays adopting some forms of automation in their warehouses to improve
product movement for efficient order fulfillment, storage, and reducing the faulty
return pickups to keep delivery costs to a minimum and remain competitive in the
online market.
The use of robotics and other IT-supported technologies has become the foun-
dation for warehouse automation. In the age of robotics, they are categorized into
two categories: behavioral-based robots and industrial robots. Industrial robots are
­specifically used for warehouse management (Nolfi & Floreano, 2001).
Warehouse automation means the use of various IT-based technologies that allow
a warehouse to operate much more effectively and efficiently in order to achieve
greater outcomes with contributing significantly fewer efforts, which revealed that
“59% of IT and operations personnel in manufacturing, retail, transportation, and
wholesale market segments planned to expand process automation between 2017
and 2022” (Zebra’s Warehouse Vision Reports, 2019). Retailers face an increased
number of online orders and package shipments daily, and this number becomes
larger, which almost doubles up at the time of special sales around Diwali, Holi, or
other festivals when they launch special big billion day sales or great Indian festival,
etc. To fulfill a large number of orders while maintaining low costs, the e-retailers
require the support of automation; especially, it becomes impossible to deliver on
time without any form of automation.
Thus, the application of automation in warehousing and distribution helps
e-commerce businesses in tackling the high logistics demands without high main-
tenance costs (Nolfi & Floreano, 2001). A range of technology options is avail-
able for e-retailers to consider and choose the technologies for their warehouse
management.

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 Rise of Automation and Robotics 65

5.1.1 Why E-Commerce Businesses Adopt Automation Technologies?

E-commerce is growing rapidly around the globe, which causes drastic changes in the
retail landscape. As the customer’s expectations are changing, it requires manufac-
turers, distributors, retailers, and logistics services providers to change how customer
orders are fulfilled for which they need to reconfigure their backend fulfillment and
warehouse operations as well.
The warehouse is not only a back-end operation but rather plays a critical role in
the supply chain management. Any issues in the operations of a warehouse can lead
to delays and impacts on the customer satisfaction and cash flow of the organiza-
tion. Efficient warehouse management has become an art in itself. It can provide
greatly enhanced efficiencies, improve performance, and support the growth of the
company. Thus, automation comes in handy improving warehouse management. “In
the beginning, when logistic and e-commerce companies considered to use robots to
carry out their business practices, there wasn’t enough technology to carry out the
tasks of carrying and handling a wide array of various shapes” (Deutsche Post DHL
Group, 2016).
Warehouse automation helps e-commerce businesses to experience several of the
following benefits:
To meet the accelerated fulfillment demands, the fast growth of e-commerce has
compressed order fulfillment times. Customers expect expedited delivery – same
day or next day delivery. Automation thus helps in fulfilling agile and nimble order
delivery.
Lower costs: Automation helps in reducing operating expenses and unneces-
sary errors; reducing overhead costs; and reducing the costs related to safety, labor,
­equipment, and maintenance. It also reduces the costs associated with energy con-
sumption and storage space. It leads to enhanced warehouse space utilization and
flow.
Workforce productivity and retention: Automation can increase the efficiency and
productivity of human resources. The organizations do not need to employ more
people; rather, they attain greater productivity out of each employee without increas-
ing the headcount. This makes the work of a warehouse team easier by minimizing
manual processes and makes it further safer, which further leads to an increased
retention of employees.
Healthier inventory: Automation process leads to enhanced inventory data col-
lection and sharing among different functional areas. This leads to better inventory
management and control, making it almost 99.9999% accurate. It helps in the reduc-
tion of lost inventory, shrinkage and misplacements, and lesser shipping errors. It
uses a just-in-time (JIT) methodology for order fulfillment.
Sustainable “green” practices: Automation helps in contributing to environmen-
tal protection. It reduces land use as inventory is minimized, produces lesser ­wastage,
reduces the energy requirements for running the facilities, and overall lowers the
costs. In the case of refrigerated or temperature-controlled facilities or warehouses
that deal with special products or hazardous wastes, these green practices make
­benefits to the environment. These benefits become especially impactful to handle.

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 66 Transforming Management Using Artificial Intelligence Techniques

Building brand and reputation: Automation leads to an efficient handling of

orders and timely delivery of orders. This creates a brand image and reputation of
the organization among customers and suppliers. This leads to repeat business for
the business.

5.1.2 The Technologies
The success of e-commerce business depends upon the speed and accuracy with
which items are picked as it eventually influences the fulfillment lead time, that is,
the time when the order is first being placed to the time when the item is delivered
to the customer. To ensure the speed and accuracy, warehouse automation comes in
very handy.
Warehouse automation is mostly of two types: process automation and physical
automation.
Process automation is also known as system automation, which consists of digi-
tization of manual processes like inventory data collection, and which integrates
that data with the database or ERP system of the organization. Process automation
consists of the usage of the ecosystem of barcoding and wireless barcode scanners,
which is used for inputting data about the items and tracking the items. This data
is further shared and saved in the central database of the organization where it can
then be used across all the functional areas such as marketing, logistics, and pro-
duction of the organization. Physical automation includes all kinds of mechanized
technologies or machines used for automation. It consists of the usage of robots
and robotic systems in the warehouse. These technologies that are used in physical
automation are much more expensive and costly to implement as compared to pro-
cess automation. Examples of physical automation technology include autonomous
mobile robots (AMRs), goods-to-person (G2P) technology, and automated guided
vehicles (AGVs).
Barcode labeling is a part of process automation. It is the most basic level of auto-
mation, which consists of the usage of printed paper, specific scanners, and IT-based
applications. Out of the many warehouse automation solutions, the use of barcode
labeling is the cheapest and easiest to carry out. The products are barcode-labeled,
which are then tracked with the help of scanners at various points in supply chains.
The usage of these labels helps in the correct entry of data and product into the sys-
tem, which further reduces the chance of errors in inventory tracking or shipping of
goods.
Barcode labeling further serves as the basis for physical automation. This tech-
nology becomes the fundamental identification of products, based on which further
operations of robotics and mechanized technologies work.
Barcode labeling helps in inventory tracking. Using barcode, the items are tracked
inside the facility at arrival during receiving, its storage and handling, and its ship-
ping stage. Therefore, it forms the foundation of the entire warehouse automation.
It thus prevents picking or ordering errors. It also helps in automatic data collec-
tion, which can lead to better arrival planning for goods. For example, operators
can easily ensure the same time delivery of cargo and shipment inventory. It also

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 Rise of Automation and Robotics 67

improves traffic flow and picking efficiency within the facility. Since the required
data is easily available to operators in machines in their hands, it ensures an easier
identification of shelves and areas for unloading and picking, speedy and correct
unloading and picking, and timely departure and delivery of every item. Based on
the data collection, reallocation of employees to high-priority areas can be easily
done, which prevents the staff shortage and delays. All these advantages of bar-
coding ensure that no “out-of-stock” situations occur as the software ­monitors and
tracks all the items through all the stages in the facility. This information about the
items is synched with warehouse management system (WMS) of the company for
further rapid and transparent data sharing across company systems to enhance deci-
sion-making across management levels. By tracking the number of goods through
barcode labels, the reordering of items can be automated. Whenever the amount
falls closer to the predefined threshold levels, systems automatically reorder ensur-
ing no “out-of-stock” scenarios.
Amazon was the leader in innovation of the warehouse management with robotic
technologies. Amazon was the first one to use the robots called Kiva Systems, which
were the AGVs used in the warehouse and fulfillment centers. Later in 2012, Amazon
bought over the Kiva Systems and renamed the company as Amazon Robotics. As of
2019, they are using almost 100,000 robots in their warehouses for their fulfillment
operations (Donna, 2015). These robots are very advanced; they can pick up entire
shelves of products and deliver them to packing stations situated in specific areas of
a facility or a warehouse. These robots are based on the algorithms that can identify
the most popular items and what is their closest supply point. They also have sensors
that can prevent collisions on the way.

5.2 ADVANCED TECHNOLOGIES
The advanced technologies are being produced and used in warehouse management
all over the world. “Recent studies show that China has overtaken Japan to become
the world’s largest consumer market for industrial robots” (Munford, 2015).

5.2.1 Automated Storage and Retrieval System (ASRS or AS/RS)

ASRS consists of a variety of PC-controlled frameworks for automatically unload-
ing or setting as well as picking or recovering loads from specified areas in a facility
or a warehouse. These systems are especially useful in situations where there is a
movement of an extremely high volume of items within the facility or where there are
high storage and efficient space requirement. A proficient AS/RS framework assists
organizations with cutting costs by limiting the measure of pointless parts and items
away, and improving the association of the substance of a distribution center. Because
of robotized forms, it likewise takes into account more extra room because of high-
thickness stockpiling, smaller passageways, and so forth. Automation decreases
work costs while bringing down workforce prerequisites and expanding security.
These systems enable an efficient and cost-effective handling and coordination for
picking, packing, and shipping of items from a warehouse.

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 68 Transforming Management Using Artificial Intelligence Techniques

5.2.2 Goods-to-Person Technology (G2P)

This technology is best suited for the present-day high-volume operation-based
e-commerce where online orders consist of individual products. Hence, G2P is espe-
cially useful for split-case order fulfillment, which consists of individual units that
have to be picked from individual locations and placed into a shipping tote or carton.
The traditional picking consisted of persons to a good model where individual pick-
ers are going to a specific product to pick it. This wasted time and was labor expen-
sive and led to a decrease in the number of orders processed. In contrast to the P2G
model, in G2P instead of a person going to goods, the good is brought to the person.
The stored individual items are automatically picked from storage and brought to
the picker or a pick station. “Since the picker does not have to walk, the focus at the
pick stations and pack stations is on ergonomics and high productivity. Model mini-
mizes the wasted time between picks and increases the number of orders processed
per person” (Kim, 2015). There are many different kinds of G2P technology but they
are all based on some fundamentals where the automated system brings SKUs to a
stationary pick station and not vice versa.
At present, a large number of extremely efficient G2P systems are available in the
market. Some of the companies that provide G2P-based solutions include Swisslog’s
AutoStore, Dematic’s Multishuttle, TGW’s Commander, SmartCarrier and Kiva,
which facilitate agile and precise order fulfilling for smaller-order quantities based
on e-commerce.
“This has been largely influenced by heightened processing capability and fully-
integrated controls architecture developments, making these high-SKU-count, high-
speed systems possible” (Diankov & Kuffner, 2008). These G2P solutions can include
multiple component-based technologies such as pallet-based or tote-/carton-based
systems, high-density storage systems, robots, horizontal and vertical carousels, and
vertical lift modules. And these solutions also have the flexibility to be scalable for
changes in increased or decreased products.

5.2.3 Automated Guided Vehicles

Automated guided vehicles or automatic guided vehicles (AGVs) are the most com-
monly used technology-based solutions, which are used for moving materials in a
warehouse or other manufacturing facilities. The AGVs are the mobile robots that
follow markers or wires in the floor, or use vision or lasers. They are often termed as
“driverless” vehicles, which include robotically controlled industrial lift trucks that
were earlier manually operated, and used in manufacturing and distribution settings.
The present-day AGVs provide safe, efficient, and cost-effective movement of goods.
They allow better allocation of employees to tasks and deal with labor shortages.
AGV’s technology is known by other names as well such as laser-guided vehicle
(LGV) or Fahrerlose Transport system (FTS) in Germany or förarlösa trucker in
Sweden. The cheaper or lower-cost magnetic tape-based versions are called auto-
mated guided carts (AGCs). Many different models of AGCs are available in the
market, which can be used to move the products and carry and deliver loads across a
warehouse or a manufacturing plant usually guided by the magnetic tape.

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 Rise of Automation and Robotics 69

The first commercially produced AGVs were launched by Barrett Electronics, a

U.S.-based company in 1950. In its earlier version, these AGVs used to be like a tow
truck that used to follow a floor-based wiring system instead of a rail. In the next
version came the AGVs based on invisible UV markers. One of the first practical
applications was the delivery of mails in offices at the Sears Tower in Chicago. With
further technology development, the AGVs have become even more sophisticated
and are based on laser technology, and they are also called LGV (laser-guided vehi-
cle). The present-day AGVs have the capability of communicating with other robotic
machines in a warehouse in ensuring the smoother and safer movement of products
for storage or shipping to their intended destination.

5.2.4 Autonomous Mobile Robots

AMRs are the latest and advanced version of AGVs. They are much more
­sophisticated and efficient. They are faster, smarter, and easier to set up. They are a
form of AGVs. They can work without any supporting infrastructure like precisely
located laser targets or wires or magnets implanted in the floor. They have map-
ping and obstacle avoidance capability with a human–robot interface. They consist
of powerful artificial intelligence (AI) technology-based laser ­sensors, sophisti-
cated camera systems, and computer hardware, which allow them to operate and
navigate dynamically using a map by understanding their surrounding of opera-
tion. They are not restricted to fixed routes; rather, they can plan and replan their
paths, and travel faster. The AI technology converts AMRs into smart devices that
can identify and react to other machines, forklifts, cars, people and other mate-
rial handling ­equipment, and can work safely in their busy environment.(Fuchs,
Haddadin, Keller, Parusel, Kolb, & Suppa, 2010) AMRs even have advanced capa-
bilities like following a specific person wherever they go. These newer systems are
­cost-effective and scalable for future expansions. Some of the organizations provid-
ing AMR solutions in the market include Veridian, Fetch Robotics, AGVNetworks,
and Quicktron.
AMRs can majorly be of two types:

Based on fleet management – AMRs deal with bigger loads. They route the
robots from a starting point to an endpoint.
Based on picking optimization – robots under this category try to increase
picking throughput by assimilating the movement of people and machines
working in a process flow design. This type supports smaller loads as it sup-
ports picking to cartons and totes.

“The pick optimization segment, driven by the growth of e-commerce, is by far

the faster-growing segment” (Futch, 2019). Two of the renowned suppliers of this
­technology are 6 River Systems and Locus Robotics. AGCs engage carts underneath
and transport them safely. The load remains above or on the AGC; for this reason,
AGCs are also called lurking AGV, under cart AGV, AGV transfer cart, or tunnel-
type AGVs.

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 70 Transforming Management Using Artificial Intelligence Techniques

5.2.5 Articulated Robotic Arms

Robotic arm is one of the most important technology solutions that can be used in
warehouses, especially with high product movement as in the case of e-­commerce-
based ventures. These arms are the standalone arms that are typically used in case of
repetitive tasks. They follow the predetermined movements for specifically located
objects. They have onboard controllers, sensors, or translators through which – based
on their speed, position, direction, and distance – their working is controlled. This
allows them to be sensitive to and interact with their environment. In case of complex
situations such as when object position is not predetermined, the sensor processing
of robotics arms additionally collaborates with AI and machine vision to identify the
object position and further control the movement of the arm. Robotics arms are also
called the joint robot manipulators or even full robots.
Robotic arms are of many different types, but based on their mechanical ­structure,
they are categorized into four major categories.

Cartesian robots are also known as Gantry robots having three joints with the
standard X-Y-Z Cartesian axes.
Cylindrical arms do not have a specified number of joints; rather, they operate
on a rotating cylindrical axis on one fixed rod.
Spherical (polar) arms are those arms having joints that allow full rotation
spherically.
SCARA robots are used for “pick-and-place” work. They consist of two paral-
lel rotary joints that allow full movement through a plane.

5.2.6 Automated Guided Carts

AGC is the most cost-effective solution, which is in demand these days especially by
small- and mid-sized manufacturers in various industries where the material han-
dling is at a smaller scale. AGCs, also called SmartCart, is a flexible version of
AGV, which is based on following the magnetic tape. Magnetic tapes are the easiest
as well as faster to install or modify the guide path of AGVs as compared to laser-
guided AGV systems (Rebecca, 2014). Therefore, the SmartCart AGCs are auto-
matic, durable, and reliable, and at the same time, they are cheaper and easier to
install. Therefore, for small manufacturers, AGCs are appropriate for point-to-point
moving and transporting goods in a warehouse and plant.
AGC like AGVs are driverless transport vehicles that can carry goods between
two or more picking stations on a determined route. SPS controls the load for AGCs.
Small companies are buying AGCs to increase the floor efficiency and reduce their
operating costs.

5.3 CONCLUSION
As online sales and e-commerce grow worldwide so is the demand for faster move-
ment of products through the supply chain. The ever-increasing demands of cus-
tomers for faster fulfillment of orders along with the severe competition and in

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 Rise of Automation and Robotics 71

the growth of newer business models have pushed the companies, especially the
e-­commerce ­companies, to look for innovative technology solutions to cater to their
­customers. This leads to a growth of a new generation of technology solutions, which
are ­intelligent, smart, autonomous, and mobile robots which can be useful in their
supply chains and especially their warehouses. These solutions are helping these
companies to rapidly expand and meet the increased demand while ensuring lower
operating costs, stay competitive, and further manage the worker shortages and effi-
ciency. There is a huge increasing demand for logistics robots. “A recent report by
Tractica Research estimates that the worldwide sales of warehousing and logistics
robots will reach $22.4 billion by the end of 2021, with robot unit shipments ­reaching
620,000 units per year by 2021. There are more than 50 existing and emerging firms
vying for customers within this space. An estimated amount of $10.34 billion revenue
will be generated by the global warehouse robotics market by 2020” (Bogue, 2018).
This reflects that robotics-based modern logistics is the future of supply chains
across the globe. By automating the basic functions of product movements in
­assembly chain, manufacturing plant or a warehouse, the organizations can handle
product movement much more effectively and efficiently removing the possibility of
human error. “Mobile robotics solutions reduce the probability of a product being
improperly received, stored, transferred, picked, packed, or shipped to the customer”
(Barks 2017). These robots make life and businesses stress-free and harmless.
At the end of the day, the implementation of automation to the warehouses needs
not to be an upfront one-time investment as one goes. Progressive adoption of
­automation to update the current warehouse system can be a viable option (Starship,
2018). With a well-planned integration of appropriate equipment, e-retailers can have
a complete warehouse system suitable for their operation, addressing even complex
picking challenges.

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