Issue 1 | 22.01.2024

Automation and robotics are certainly one of the biggest bets across most branches in the 2020’s. Logistics, however, seems to stand out in particular. With its low margins and comparably high share of manual tasks, it has frequently been identified as the area of early adoption for automation technologies. Recent studies like the Global Industrial Robotics Survey by McKinsey predict that automation will account for up to 30 percent of Logistics companies' spendings in the next five years. 

But why exactly should Logistics operations be automated and what are the benefits? After consulting and executing countless automation projects at one of the world’s largest corporations, here are our top reasons for you:

1. Cost Savings: 

The most obvious reason for automation in logistics is the pursuit of cost savings. In a world where every company aims to increase revenue and decrease costs, logistics automation proves to be a powerful tool. Labor costs constitute a significant portion of logistics expenses, making automation an attractive solution for optimizing and reducing these costs.

2. Attractive Return on Investment (ROI): 

Automation technologies like mobile robots (also known as AGVs or AMRs) are getting way more accessible. With constantly decreasing prices, a comparably cheap and easy integration and low maintenance efforts, attractive ROIs are very likely. Our experience shows that there are at least three to four logistics automation use cases in each facility that can be implemented with an ROI of less than two years. Both in high-cost and low-cost locations!

3. Resilience and Competitiveness: 

Logistics, being a low-margin business, requires constant efforts to safeguard competitiveness. Automation enhances resilience by mitigating risks associated with factors such as workforce shortages, pandemics, and fluctuating demand. Automation is not just a cost-saving measure… it is a strategic move to secure a competitive edge!

4. Transparency of Operations: 

Automation brings transparency to logistics operations by digitizing processes and creating a data pool for analysis. This transparency enables companies to identify inefficiencies, set key performance indicators (KPIs), and embark on continuous improvement initiatives.

5. Safety and Precision: 

Automation ensures a higher level of safety in logistics operations. Equipped with sensors and cameras, robots operate safely within warehouses, reducing the risk of accidents. Additionally, automation significantly minimizes picking errors, enhancing the precision and accuracy of tasks that are prone to human errors.

6. Flexibility and Adaptability: 

Advancements in the current generation of mobile robots offer flexibility and adaptability in logistics operations. These robots can work 24/7, adjust to changing demand, and seamlessly integrate with existing processes. Once rolled out, most automation technologies can be scaled quite easily. This allows companies to start small and gradually transform their logistics operations.

7. Improved Job Quality: 

Contrary to the fear of job loss, automation can lead to a better job quality. By automating repetitive and physically demanding tasks, human workers can be upskilled and engaged in more fulfilling and creative roles, contributing to a positive work environment.

Conclusion: 

Automation in logistics goes beyond mere cost savings. It offers a strategic advantage in terms of resilience, flexibility, safety, and improved job quality. The constantly decreasing prices open new possibilities and drastically enlarge the number of potential use cases that provide an attractive ROI. Automation is for everyone… so start your journey today!

🎙️ Do you lack the time to work yourself through the jungle of different terms, technologies, and providers? 

If yes, make sure to follow our podcast! We publish a new episode every Monday to provide insights and best practices to help you awaken the potential of automation in your organization. So make sure to tune in, share your views and experiences on our LinkedIn page, and let’s learn from each other! Looking forward to an incredibly exciting year 2024.