With coronavirus still enveloping our daily life and as we enter 2022, the material handling industry is facing great uncertainty.
However, this will only prompt the industry to make the necessary investment to enable the supply chain to adapt to market changes. For warehouse operators and their automation partners, the next 12 months are expected to be another busy and dynamic period.
The following are the four macro trends predicted by Daivd dronfield, general manager of the Middle East of Swiss Swisslog, compiled by China AGV network (www.chinaagv. Com).
(1) Goods sorting develops upstream
In recent years, there is a general trend that the scale of orders is getting smaller and smaller. This trend is expected to continue in 2022 as centralized pallet and box warehouses incorporate single item picking into their operations. This will be driven by the continued development of the retail industry and the entry of manufacturers into direct consumer oriented sales.
In retail, the growth of inventory units (SKUs) and smaller store forms limit shelf space, forcing retailers to reduce the inventory of each SKU. Some retailers will face the challenge of accepting slower flowing products and will have to promote the replenishment of individual products of these products.
At the same time, manufacturers recognize the opportunities of e-commerce and need to support them to enter the market from centralized warehouses by increasing the item processing capacity of these facilities.
The result will be the transformation of many warehouses, as they integrate new processes and technologies to achieve efficient item picking. Goods to people technologies, such as cube based automatic storage and retrieval systems and mobile autonomous robots, will find targets in warehouses that previously only supported pallet and box handling.
This trend will also accelerate the adoption of robotic item picking systems. This technology provides notable benefits for material handling operations because it has the potential to fully automate the picking process and help operators adapt to labor shortages and cost pressures.
The limited range of products that the previous generation system can pick makes them impractical in a wide range of SKU applications. Through more advanced grasping and vision systems, the new generation of robot picking solutions expand the range of products that can be picked and provide the highest operational reliability.
(2) Grocery retailers are clear about their micro distribution strategy
Demand for e-grocery services has leveled off since the early days of the epidemic, but it is still much higher than grocers expected two years ago. We now see the same e-grocery trend as we have seen in other e-commerce markets before: consumers have higher and higher expectations of completing orders faster.
The use value of e-commerce warehouses in the Middle East is expected to increase from US $180 million in 2018 to US $500 million in 2024. Due to the improvement of automation and supply chain integration, the investment in warehouse is increasing.
The difference is that the fulfillment time of online grocery orders is in minutes or hours rather than days in other e-commerce applications. As consumers integrate online grocery shopping into their daily and weekly routines, tolerance for longer performance times has disappeared. In a survey in Saudi Arabia and the United Arab Emirates, more than 40% of respondents said that fast delivery was one of the most important factors affecting their choice of online shopping platforms.
For mass retailers in many places, this makes in store and manual fulfillment impractical. In store pick-up efficiency is low, the cost is high, and it will cause congestion, thus alienating in store shoppers.
Although some large grocery stores, such as Heb and giant, have jumped to automated micro fulfillment centers (MFC) and electronic fulfillment centers (EFC) to achieve efficient order fulfillment close to customers, most markets gained a better understanding of the complexity of electronic grocery fulfillment in 2021 and began to implement the organizational changes needed to support future MFC strategies.
Therefore, 2022 will be the year when almost all major grocers will finalize their e-grocery strategy, and many people will use MFC automation to enter the implementation stage. At the same time, early adopters will begin to expand the use of MFC and benefit from simplified implementation, as the perfect solution is replicated in the distribution network through the pilot program.
(3) Supply chain connectivity is beginning to provide global inventory visibility
One of the gaps in many supply chains is the inability to fully understand the inventory of global distribution and retail locations.
With the digitization of warehouses and retail stores, this data is easy to obtain at every site. However, creating interfaces across various software platforms in any given distribution network is a challenge for a single organization. The software platform has an important market opportunity to connect different systems of global enterprises and provide a unified view of inventory and its status.
(4) Flexibility drives automated warehouse decisions
What the first three trends have in common is the need for distribution systems to remain agile and responsive to change. The biggest growth driver of global warehouse automation technology is e-commerce, and so is the Middle East.
The processing of e-commerce promotes the demand for more warehouse space and the increasing use of automation solutions in the warehouse itself. The Middle East material handling report released by Messe Frankfurt in 2019 estimates that the scale of the Middle East warehouse automation market will be US $500 million in 2018 and will grow to US $1.6 billion by 2025, with a CAGR of 17.5%.
The flexible and scalable robot automation technology has first gained a firm foothold in the implementation of e-commerce. These systems enable e-retailers to adapt to changing demand and rapid growth in a way that traditional automation cannot. We now see these systems expanding to new applications.
In applications ranging from pallet handling to item picking, these solutions enable warehouse operators to independently expand throughput and inventory. They are fundamentally able to drive higher performance without the need for higher performance at the same or expanded inventory.
They can also adapt to the shape of the buildings where they are deployed and support the trend to increase distribution capacity by upgrading old warehouses or reusing unnecessary or underutilized facilities.
Now, as we enter 2022, many organizations will find that they simply cannot further expand their available resources and systems. New distribution strategies and technologies are needed to meet today's challenges and adapt to unforeseen changes in the future.
