The warehouse of the future conjures images of whirring humanoid robots autonomously zipping through aisles and large mechanical arms packing orders with clinical efficiency. While warehouse robotics is undeniably a growing trend, the narrative surrounding its value deserves a more granular look.

Robotics certainly has the potential to reshape warehousing and logistics, but presently it has limitations and a long payback period. Human touch often remains a crucial component in warehousing, especially when dealing with volatile consumer demand, a wide variety of product form factors, and a high-touch customer experience. 

Robotics is often used as a blanket term in warehousing, but it’s important to make a distinction between powered automation and robotics. Powered automation includes machinery such as powered rollers and conveyor belts, pallet-wrapping machines, and auto baggers. Depending on the size and scale of an operation, these innovations offer a relatively straightforward return on investment calculation. There’s little variance in the tasks that this type of machinery handles, and depending on variables such as walking path length and package or pallet volume, the equipment can be a boon for efficiency.

Robotics includes equipment such as powered carts that follow warehouse workers down picking aisles, arms to pick products out of bins and place them into boxes, self-contained units that perform large volume kitting and, in the near future, multi-function robots that perform a breadth of activity similar to that of a human. These types of robots, due to their upfront expense, programming requirements and specificity, are best suited for operations that manage consistent volume, process and physical products.

Gears of Nuance

When considering whether warehouse robotics are the right fit for an operation, there are numerous factors to take into account, particularly the potential payback period — or whether a payback period even exists. One of the primary considerations is volume. Robotic infrastructure is typically designed to handle a specific level of throughput, meaning that the initial investment is closely tied to the volume it’s expected to manage. However, if there’s a spike in volume, the system may be overwhelmed, leading to inefficiencies. Conversely, if the volume drops below the anticipated level, the robotics —and the substantial investment that accompanied them —may sit idle, effectively wasting resources. Therefore, for robotics to be a worthwhile investment, volume needs to be consistent and predictable over a significant period of time.

Another crucial factor is the consistency of processes within the warehouse. Robotics thrives in environments where tasks are repetitive and standardized. For instance, if your operation involves picking the same item repeatedly and placing it in a box the same way every time, robotics can significantly enhance efficiency. However, when standard operating procedures are highly variable, robotics may struggle to adapt, leading to operational friction. The less predictable the processes, the less suitable robotics may be for your operation.

Product form factor consistency is also a key consideration. Robots are well-suited to environments where items are uniform in size and weight, such as standardized boxes. However, if your inventory includes a wide variety of product types — ranging from boxed items to polybagged products, and from small and lightweight objects to large and heavy ones — the complexity of programming and managing the robotic systems increases significantly. In such cases, the need to run multiple "waves" with reprogramming in between may make the use of robotics impractical. Additionally, if your processes involve delicate tasks like removing stickers, unboxing, or gift wrapping, robots may not be ideal due to their lack of finesse in handling such activities.

Finally, it’s important to consider the steep learning curve associated with managing a warehouse full of robots. The technical expertise required for programming and maintenance becomes another significant consideration, potentially adding a new line item to the profit-and-loss statement. Without the necessary skills and knowledge, the efficiency gains promised by robotics could be offset by the challenges of managing and maintaining the system.

Humans Offer More Than Efficiency

In third-party logistics operations that cater to consumer brands, particularly in the apparel, accessories and luxury segments, humans remain a vital component of success. These brands often rely on regular product "drops" and experience significant fluctuations in volume, making flexibility crucial. A human-based workforce can scale up or down quickly and efficiently, adjusting to changing demands without the wasted costs associated with underutilized robotic systems. This adaptability is especially valuable during peak periods, such as holiday shopping seasons, when the need for rapid scaling is paramount.

Humans also bring a unique value to warehouse operations by performing functions in a more end-to-end manner. This holistic approach allows them to gather insights that can be communicated back to the brand, ensuring that it has a clear understanding of what’s happening on the ground. These insights can include identifying product defects, recognizing patterns in returned merchandise, and offering suggestions for improving customer experience. Additionally, humans excel at creative problem-solving, which can be invaluable in a fast-paced, ever-changing retail environment.

When it comes to high-touch activities, such as writing personalized gift notes, gift packaging, wholesale product preparation, and complex kitting, humans continue to have a distinct advantage over robots. These tasks require a level of attention to detail and customization that robots aren’t yet capable of replicating. Moreover, employing human workers for these functions involves much lower upfront costs compared to investing in sophisticated robotic systems, making it a more practical and cost-effective solution for many 3PL operations.

Where Do We Go From Here?

Powered automation has become a cornerstone of efficiency for operations that have the scale and repeatability needed to justify the investment. In these warehouses, the ROI is clearly there, driving productivity while reducing labor costs.

When it comes to robotics (as opposed to powered automation), the technology continues to rapidly evolve and demonstrate its effectiveness in certain types of operations. However, operators must be aware of both the advantages and limitations of robotics, and they need to maintain a realistic understanding of their own operational needs and constraints.

For 3PL operations that lack steady volume, uniform products, and consistently repeatable processes, the implementation of robotics may not yet be the ideal solution. In these cases, it might be more practical to explore technology that can complement human activities rather than replace them. Collaborative robots, or "cobots," are designed to work alongside human workers, enhancing productivity without requiring the same level of standardization in process, volume and product.

For operations where the cost can be justified, robots that assist in transporting goods after they’ve been picked by humans, or sort packages for shipment, can be a productive entry point into automation. These systems can help increase efficiency without overhauling the entire operation. However, it’s crucial to carefully evaluate the payback period and upfront costs associated with these technologies, to ensure that they align with the business's financial goals and client base.

The future of warehouse robotics is exciting, with innovators continually pushing the boundaries to create more flexible and customer-focused solutions. As these technologies advance, the right balance between human and robotic labor will likely emerge, offering enhanced efficiency and improved customer experiences for a wide range of operations and their clients.

Ricky Choi is founder and chief executive officer of Outerspace, a third-party logistics provider for fulfillment.