Robotics & Automation Roundtable: An inside look at a fast-changing industry

KEVIN READER, VICE PRESIDENT OF MARKETING, Knapp U.S.

DAVID SCHEFFRAHN, VICE PRESIDENT OF SALES – NORTH AMERICA, Ocado Intelligent Automation

MATT WICKS, VICE PRESIDENT AND GENERAL MANAGER, Zebra Robotics Automation

JACKIE WU, CEO, Corvus Robotics

Q: WHAT ARE THE BIGGEST FACTORS INFLUENCING DECISIONS TO AUTOMATE?

David Scheffrahn – Ocado: Our clients and prospects consistently tell us that the primary factors in their [decision to adopt] automation solutions are a desire to address the cost to serve, labor, and their future state. With cost to serve, they are looking to create sustainable cost reduction and containment. For labor, they aim to mitigate or (when possible) eliminate the need for labor while maintaining or increasing facility throughput. As for the future state, clients want to ensure that the operation will receive ongoing value.

T.J. Fanning – Kardex: The historical factors of labor and space constraints remain, but the biggest factor [in] automation decisions is how your business will compete without automation. Executives now must consider what the future state of their market vertical will require to defend their market share and or increase it. These factors include service-level commitments such as same-day shipment, value-added service capabilities like customizations, and the resiliency [to respond effectively] to supply chain disruptions.

Kevin Reader – Knapp: Supply chain shortages and disruptions certainly ranked very high following Covid, and that subject remains top of mind with many supply chain operators. Certainly near that rank both inflation and the cost of capital. But the number-one challenge that we have heard with consistency over the last several years has been labor—whether it be the aging workforce, the competitive environment for labor, the full-employment situation, recruitment, retention, training, etc.

Matt Wicks – Zebra Robotics: We’re hearing a lot about the mobile robotics space. Autonomous mobile robots (AMRs) have been out there for a while now. It’s not a question of whether these things function well in warehouses anymore. They’ve reached a level of maturity where there’s more focus on utilization, unit economics, and the value end-users can get out of their solutions. It’s no longer: “Hey, this is a novel concept that can do what it claims.” They want to see economic justifications that prove AMRs deliver a substantial payback.

Jackie Wu – Corvus Robotics: The two biggest factors driving automation are rising labor costs due to a shrinking workforce and the need for faster, more efficient operations. At the same time, growing customer demands for speed and accuracy push companies to optimize workflows. Automated systems, like robotics and AI-driven solutions, reduce errors, speed up processes, and ensure 24/7 efficiency—helping businesses stay competitive while cutting reliance on unpredictable labor markets.

Q: WHAT TYPES OF AUTOMATION ARE DISTRIBUTORS AND MANUFACTURERS LOOKING FOR TODAY?

Jackie Wu – Corvus Robotics: Distributors and manufacturers are looking for new, innovative ways to streamline operations, boost productivity, and lower costs. Automated order fulfillment and inventory management technologies continue to mature and are becoming more widely adopted as relevant use cases gain traction through various industry verticals.

Kevin Reader – Knapp: There is no doubt that the first word you hear from senior leadership tends to be robotics, but if you evaluate this further, you find that the cost of capital, ROI (return on investment), and shorter project cycles have been the primary driver of investment decisions toward variable-path AMRs (autonomous mobile robots) and away from fixed-path AS/RS (automated storage and retrieval systems). In addition, there is a broader understanding across various market segments that are interested in reducing touches, a focus on right-sized packaging, and the value of flexible software solutions that employ dynamic orchestration, AI (artificial intelligence), and other leading-edge approaches to operations.

T.J. Fanning – Kardex: The combination of the high cost of capital and accelerated labor rates is forcing distributors and manufacturers to find ways to do more with what they have. Financing a new building or moving to a new facility can be extremely costly but is the traditional answer for significant growth. This is forcing the consistent trend to improve not only operational labor efficiencies, but also storage density and flexibility. This requires limited facility modifications but can boost storage density by as much as 75% as well as quadruple labor efficiency.

David Scheffrahn – Ocado: OIA’s focus is on operations within the distribution center. Regardless of industry, companies seeking warehouse automation continue to be most focused on order fulfillment because picking and packing require the largest concentration of labor, cost, and performance variability within the warehouse.

Q: HAS THE INDUSTRY FINALLY WORKED THROUGH THE BACKLOG OF AUTOMATION PROJECTS THAT BUILT UP DURING THE PANDEMIC? WHAT ARE THE AVERAGE LEADTIMES FOR MAJOR PROJECTS?

Kevin Reader – Knapp: The short answer is yes—the industry is working through the backlog of projects and leadtimes are improving. Backlogs and leadtimes, however, are still quite specific to the technology selected and the scope of the project. The industry is transitioning to a more “product-based” approach from an engineering-centric, project-based and customized approach. But still, as demand increases to respond to an annual 5% CAGR (compound annual growth rate) market growth, project leadtimes can vary widely—anywhere from six to 24 months.

Matt Wicks – Zebra Robotics: I’d say recovery rates have varied for different markets. From our perspective, warehousing, distribution, and fulfillment operations seem to be pretty healthy because we’re seeing some really good growth. We still see some lagging in the manufacturing space, where I think a lot of folks have been putting more money into services than in purchasing goods.

T.J. Fanning – Kardex: This may seem controversial, but is it really a backlog of automation projects that built up due to the pandemic and low capital, or is it vendors not recognizing the value of time? This starts with solution capabilities and design, which, if inflexible, require significant time and valuable resources to simulate and model all the variability that you need to prevent a catastrophic decision. My belief is that as solutions have become more flexible, they are actually quicker to implement and easier to support, and achieve a higher ROI as the complexity to operate them is not dependent upon a few key resources.

Q: DO YOU FEEL THAT NEW ROUNDS OF TARIFFS WILL IMPACT SALES OF AUTOMATED SYSTEMS?

Jackie Wu – Corvus Robotics: Tariffs could impact the sales of larger automation systems that require multimillion dollar capital expenditures and take months to deploy and, potentially, years to produce an ROI. On the other hand, this may help sales of smaller, more affordable automation systems that are quick and easy to deploy, cost significantly less, and provide faster ROI.

T.J. Fanning – Kardex: I believe tariffs will have little impact on the overall growth of robotics and automation. The reality is many of the industry projects are still very labor-intensive, and, therefore, the tariffs will have a small impact on price but not enough to stall the market. Something that we are starting to see more consideration around is where the data from the system will live and who owns this data. The future use cases of AI will only be possible with access to the right data sets, and automation is capturing more data than ever before.

Matt Wicks – Zebra Robotics: I think there are multiple variables in that equation—not just tariffs but also immigration policies. There will be more interest and economic viability in utilizing anything that can be produced domestically.

Labor availability has been a challenge for as long as I can remember, and while the challenge can wax and wane, it will continue to persist in the industry and has the potential to get substantially worse. But I don’t see that slowing the delivery of automated systems; I think it will have the opposite effect. Companies will still need to get production through, get volume out the door, and make things happen. If you have a limited labor pool, the best way to take advantage of it is to leverage automation to augment that workforce, using it as a force multiplier for the people you have.

Q: HOW CAN THE USE OF DRONES BOOST PRODUCTIVITY WITHIN A DISTRIBUTION ENVIRONMENT?

Jackie Wu – Corvus Robotics: Drones boost productivity in distribution by automating inventory checks [and performing cycle counts] faster and more accurately than is possible with manual methods. They can provide real-time stock data, reduce inventory errors, and locate missing material quicker and more safely than humans can. Drones can also help distribution centers optimize space utilization by providing data-driven insights into how and where to store both fast- and slow-moving inventory. This, coupled with near-perfect inventory accuracy, enables warehouse operations to run more smoothly and be more cost-effective and efficient.

Kevin Reader – Knapp: Drones can be used today to perform inventory cycle counts as well as delivery functions in a distribution environment. They can also be used to perform select security or repetitive tasks.

That said, remaining challenges include battery charging times, pre-flight aisle clearing requirements, and a small field of view, which make the process relatively slow. Loose plastic wrap can also interfere with drone operation and can necessitate additional supervision.

Q: DO EMPLOYEES WORKING WITH AMRs AND OTHER COBOT SYSTEMS REQUIRE ANY SPECIFIC SKILLS?

Dave Gustafson – SICK: The specific roles of the employees will determine the skills required.

For employees who perform near AMRs but otherwise aren’t expected to directly interact with them—they should be informed of the AMR’s’ objectives, expected function, operation, and limitations. Their understanding of the workflow and operations can help with welcoming the change that automation brings.

Employees who will interact with AMRs in a collaborative way need to understand the functional operations and limitations of the AMRs. This means they must understand the sensors and the underlying technology principles, and how the AMR makes decisions and reacts to the sensor inputs. We’ll want them to appreciate potential blind spots or environmental conditions that lead to unsafe operations. For example can reflective or non-remissive materials be misread or misidentified? Are there potential overload and overhang conditions with unsafe material loads?

David Scheffrahn – Ocado: No experience or specific skill training is required to excel at working with AMRs. That is one of the solution’s greatest advantages. New associates can be trained to use these systems within minutes and reach the same level of competency as seasoned associates within days.

For distribution centers supporting seasonal businesses, this accelerated onboarding can mean shortening the peak labor period by a few weeks compared with facilities using less-sophisticated picking methods. Using AMRs is far less rigorous than pushing manual pick carts, allowing companies to expand the labor pool to consider people who may have previously faced employment barriers because of physical limitations.

T.J. Fanning – Kardex: People often assume that maintenance teams would need the most training to enable systems, but this can be far from the truth. Many solutions have become so simple that they even have automated common maintenance tasks and/or have remote monitoring and recovery capabilities. In reality, the groups that typically need the most training are the engineering and continuous-improvement teams. The technology in many cases has become so flexible that local operators can adjust many variables to consistently drive improved optimization. One customer I spoke with said they now achieve 10% improvement annually simply by adjusting configurations to match the business.

Matt Wicks – Zebra Robotics: Not if those systems are done correctly. We pride ourselves on the many domestic and international safety certifications our robots go through and the fact that our systems are super-easy to use. We drive all our fulfillment operations through bilingual wearable devices that tell the user exactly where to go, what to pick, which robot to place it on, and what container on that robot to put it in. It’s about as far from rocket science as you can imagine. Anecdotally, many of our customers tell us they can teach a new worker how to use the system in two minutes or less.

Q: WILL AUTOMATED GUIDED VEHICLES AND AUTONOMOUS MOBILE ROBOTS REPLACE CONVEYORS AND FORKLIFTS FOR TRANSPORTING GOODS WITHIN FACILITIES?

T.J. Fanning – Kardex: This is the dream, but it’s still far from a reality. The challenge is that our pallet quality in the U.S. is extremely low due to damaged pallets and/or stretch-wrap tails and other anomalies. In addition, many applications require some product buffer to eliminate operational wait times, and conveyor remains a great buffer provider. On larger loads, the most success has come from captive loads that have consistent quality or remote tele-operated capabilities. The most common use cases—and the ones that are consistently driving value—are in lighter loads and/or sortation.

Matt Wicks – Zebra Robotics: I’m an old-school conveyor guy, so I have some perspective on this. I think there are many awesome applications for mobile robotics—whether it be AGVs, AMRs, automated fork trucks, or other mobile technologies—in areas that are highly dynamic, are space-constrained, or require dynamic routing. I think the idea that conveyors are going away anytime soon is a fallacy. But what I do see is a confluence of technologies—systems that leverage conveyance and mobile robotics where each solution makes the most sense and use them to collaborate.

David Scheffrahn – Ocado: Yes, depending on the workflow. In addition to cost, factors such as flexibility, space utilization, and efficiency should be considered when comparing conveyors to AGVs or AMRs. AMRs offer operators the flexibility to address changes in their stock-keeping unit (SKU) mix and offer variable transport routes for dropoff at multiple points in an operation. As it concerns space utilization, AMR travel paths are not impeded by fixed conveyance lines. In addition, AMRs can be added, as needed, into an operation easily. And pickers can work alongside forklifts that are performing putaway and fulfillment workflows. Other solutions can’t work together in the same area, potentially creating work disruptions and jeopardizing service-level agreement (SLA) compliance.

Dave Gustafson – SICK: Yes, they can. AGVs and AMRs offer several advantages over traditional conveyors and forklifts, particularly with pallet moving, tugging, and even picking and sorting systems. They provide great flexibility in material handling, as they can navigate through complex environments and adapt to changing layouts without the need for fixed infrastructure required by conveyors. And they can perform numerous tasks such as lifting, carrying, and tugging, making them suitable for a wide range of applications. Additionally they improve accuracy and consistency compared to manual forklifts where human error can mean mistakes leading to product or asset damage and greater machine wear and tear.

Q: AS AUTOMATION INCREASINGLY TAKES HOLD, WHAT WILL DISTRIBUTION FACILITIES LOOK LIKE 10 YEARS FROM NOW?

Jackie Wu – Corvus Robotics: It’s quite possible, if not probable, that distribution facilities 10 years from now will be completely automated without any human involvement whatsoever. Many facilities today are inching toward being fully “lights-out,” but we’re not quite there yet. However, as technology continues to advance and mature, more processes will become automated, while prices drop and entrance barriers fall. From a holistic standpoint, the key is ensuring safety, reliability, and connectivity between all the tech so automated processes are not siloed, and meaningful data and ROI are achievable.

Matt Wicks – Zebra Robotics: I don’t have a crystal ball, but I believe improvements in sensing, intelligence, and decision-making will enable us to make smarter decisions about warehouse operations and provide a better understanding of the products we’re handling. We’re already using AI-based algorithms to do routing and planning, and obtain insights into how the most efficient warehouse pickers are achieving their goals. I expect that to improve and expand into other applications and spaces where we face labor shortages and other challenges, such as pack-out stations, returns, replenishment, value-added tasks, and service operations. There’s also a lot of talk about truck loading and unloading, transporting pallets, and putting them away.

Kevin Reader – Knapp: Ten years from now, the nature of the distribution and fulfillment center structure will be radically different than it is today. Software will have evolved to be more inventory-centric and self-configuring, and will make broad-based use of digital-twin technologies that will allow for rapid changes in automation, from a scale and capacity perspective. Accelerated use of AI will make implementation much easier and faster, and the role of quality data will have become very important.

New architectures will use hub-and-spoke arrangements as e-commerce volumes—and the demand for home delivery—expand. Store delivery hubs will still exist for major companies and in large population centers, but these will be reconfigurable to switch to e-commerce when the next pandemic arrives.

T.J. Fanning – Kardex: Of course there will be some lights-out, fully automated facilities, but this will not be the most common type of operation. The most common operation will be a facility that can leverage gig labor to process peak demands. This will require the ability to support anomalies remotely in real time and/or through AI tool sets.

David Scheffrahn – Ocado: We expect distribution centers to become smarter and more automated, and to have comparatively fewer people. We agree with the numerous industry analysts who expect to see an explosion of robotics in terms of activations, form factor, capabilities, and utilization. We also see an increased reliance on predictive analytics and heightened efficiencies in inventory and planning through artificial intelligence. If the next 10 years are even half as interesting and challenging as the previous 10 years were, we’re all in for an incredible ride.

Q: ALL OF YOU WILL BE EXHIBITING AT THE PROMAT SHOW IN CHICAGO THIS MONTH. WHAT PRODUCTS WILL YOU BE HIGHLIGHTING?

Kevin Reader – Knapp: Knapp will be exhibiting the latest in high-density automated storage and retrieval systems (AS/RS) featuring a 10% increase in storage density over existing solutions as well as a proven integration path with Knapp’s family of shuttles, high-performance workstations, AMRs, order picking robots, and, more importantly, Knapp’s software suite and right-sized packaging systems. The software suite includes a number of industry-leading applications, a best-of-breed WES (warehouse execution system), and a proven SAP integration path.

Matt Wicks – Zebra Robotics: We’ll be highlighting our latest Zebra Symmetry Fulfillment ecosystem, which will revolutionize the warehouse with innovative collaborative AMR solutions. It’s designed to lower your cost per pick and boost efficiency with up to 30% fewer robots.

David Scheffrahn – Ocado: We’re thrilled to have the opportunity to meet with the industry at ProMat and are counting the days until it starts! We will debut a new product—Porter, OIA’s new case-picking and pallet-moving AMR. We also will be running demos of our Ocado Storage and Retrieval System (OSRS) and Chuck AMR.

Jackie Wu – Corvus Robotics: Corvus Robotics will be highlighting the latest version of our Corvus One Autonomous Inventory Management System. Corvus One drones autonomously scan and map inventory, eliminating the need for manual cycle counts, which are often error-prone, labor- and time-intensive, and costly. With real-time data capture and integration with existing warehouse management systems (WMS), businesses get up-to-date inventory insights without disrupting operations.

T.J. Fanning – Kardex: We will be showcasing a variety of products, including a fully operational AutoStore with a number of enhancements like our AI-enabled IPA (intelligent process automation) operator ports.