Closing the warehouse labor gap

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It’s hard to find workers these days, especially in the ultra-labor-intensive warehouse. Many companies are turning to technology to solve the problem, implementing various automated warehouse solutions to narrow the resource gap—from robotic goods-to-person picking systems to cycle-counting drones and everything in between. Many are also looking to their forklift fleets as potential sources of labor optimization, finding that advances in automated guided vehicles (AGVs) and autonomous mobile robots (AMRs) can help boost productivity and reduce worker fatigue, ultimately allowing them to reallocate scarce labor to other warehouse tasks.

“I talk to operations managers for different customers [and] facilities all the time, and some of them say they are buying this equipment because they just cannot get enough people to get product out the door,” explains Martin Buena-Franco, manager of product marketing for automation at The Raymond Corp., which manufactures a wide range of material handling equipment, including AGVs. “It’s not an exaggeration. They’re in a situation where they need bodies, people, help. Labor shortages, in some areas, are very real. They’re trying to figure out ways to move product through the facility.”

Norm Saenz, partner and managing director at material handling consulting firm St. Onge Co., agrees and adds that labor optimization via automation is a major part of most facility design projects these days.

“The big difference in the last few years is automation being [included] on almost every project—and the idea of really trying to put AMRs or AGVs in existing facilities to remove labor,” Saenz says.

That trend is likely to continue as equipment gets better and better. Improved mapping and navigation systems, the application of artificial intelligence (AI) and machine learning (ML), and greater ease of integration into warehouse IT systems are some of the attributes that are making automated forklifts an attractive solution to today’s labor and throughput problems. 


It’s no surprise that interest in automated forklifts is growing. More than three-quarters of supply chain and logistics leaders say they are experiencing “notable workforce shortages in their operations,” according to a survey of 1,000 industry business leaders published in January by supply chain technology company Descartes Systems Group. Nearly 40% of those surveyed say they would characterize the situation as “extreme,” with more than half—56%—citing the warehouse as one of the areas most affected by labor shortages, second only to transportation operations (61%). 

Those numbers help explain why industry watchers expect to see an increase in demand for automated warehouse equipment and systems over the next few years. This follows a recent pullback from the heavy investments companies made during 2020 and 2021, when the Covid-19 pandemic created labor shortages and soaring e-commerce activity that spurred a buying spree among many companies. The research firm Interact Analysis said last year it expects investments in warehouse automation, including mobile robotics such as AMRs and AGVs, to increase slightly this year and return to high growth rates in 2025 and beyond.

Anecdotally, Buena-Franco says warehousing and logistics has suffered the least from the automation pullback of 2022 and 2023, noting that Raymond has been seeing a steady rise in demand for AGVs among that customer base since before the pandemic. He says robotics suppliers are sounding more upbeat as well, noting that those attending a January meeting of the Association for Advancing Automation (A3) were optimistic that sales will increase this year. A3 is a trade group representing companies in the robotics, machine vision, motion control, and industrial AI industries.

Together, these labor and automation trends are making AGVs and AMRs an increasingly attractive option for warehouse managers looking to get the most out of their workforce and keep operations humming. In fact, a separate 2023 study from research firm Statista estimates that the U.S. AGV market will grow at a compound annual growth rate of nearly 7% between 2022 and 2027, reaching a size of more than $3 billion. 

 “[Worker] shortages are not the totality of it. Some companies are looking for ways to optimize efficiencies,” Buena-Franco observes, noting that AGVs run more consistently than manually operated trucks, so the switch can give warehouses an immediate increase in throughput and productivity. “AGVs operate, if not 24/7, pretty close to that. … Our experience with manually operated trucks [is that] a truck running an eight-hour shift isn’t running for eight hours.”

Tightening up those forklift operations can create a domino effect that leads to even more efficiencies within the four walls of the warehouse. 

“Implementing a fleet [of automated forklifts] in a given area opens up opportunity to take people [who were] working on that task and reallocate them upstream or downstream to smooth out bottlenecks,” Buena-Franco adds.

One sticking point with adopting automated equipment is the return on investment (ROI). Many companies find it difficult to justify the high cost of the vehicles and related installation and maintenance costs, especially given today’s high interest rates. 

But there’s an often-overlooked factor in calculating ROI that may make a difference. Buena-Franco points to hiring and training expenses and the often-high employee turnover rates in warehousing and logistics—factors that can cost companies big in both investment dollars and lost productivity. He says automation can offset some of those expenses in the long run.


There’s another reason behind the growing interest in automated material handling equipment: Advanced technologies are making automated and self-driving forklifts safer and easier to use. Both AGVs (which operate on a predetermined path) and AMRs (which move independently throughout a facility) are getting better thanks to the use of telematics—which allows managers to collect and analyze data from fleets of vehicles—and the application of AI and machine learning. 

“What really stands out for me is that the navigation and mapping continue to get better every day,” Buena-Franco says. “You have better fields for detecting [objects] and a lot more data points [to analyze].”

That’s because robotics companies and equipment manufacturers are employing the latest sensors and light-detection technologies, which allow users to create better digital maps of the warehouse environment. That makes it easier for the forklifts to avoid obstacles and adapt to changing conditions on the floor. On top of that, the addition of AI and machine learning algorithms allows the equipment to learn from experience and, thus, get “smarter” all the time. 

Today’s automated forklifts can also more easily integrate with a facility’s warehouse management system (WMS) or labor management software, allowing for better orchestration of all the equipment and systems running throughout the facility. Such broad integration can help companies better allocate warehouse tasks, such as sending the right work order to the right vehicle at the right time or deploying people to certain areas of the warehouse when needed—all of which promotes a more efficient, smoother-running operation.

“We have so many clients looking at automation, and we’re building pretty good business cases” for it, Saenz, of St. Onge Co., adds. “There are more vendors, more options, and prices are more competitive. [Companies] want automation, and they want advancement. And the demand for removing labor is real.”

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