Global supply chains continue to weather crisis after crisis. The Delta variant of the coronavirus has devasted much of Asia, prompting nations to cut off land access for around 100,000 sailors who provide critical manpower for shipping lanes. Flooding has upended logistics routes in Germany and China for everything from fuel supplies to manufactured goods. Cyber attacks have disrupted container operations in the South African ports of Cape Town and Durban, causing further delays to a regional supply chain already plagued by bottlenecks.
Many shipping companies have turned to technology to help weather these crises, and virtually every expert agrees that increasing supply chain automation will make logistics management far more efficient. Supply chains optimized through real-time tracking technology, blockchain management network systems, and other innovations experience around 15 percent lower costs than supply chains that haven’t been optimized. One recent study found that proper implementation of an Automated Storage and Retrieval System (ASRS) within fulfillment centers can increase order accuracy by close to 100 percent.
While this data might suggest that all supply chain companies should invest in new technologies, there are also several important limitations to supply chain automation. Companies should carefully consider these limitations as they develop their logistics plans for the remainder of 2021 and beyond.
Automation can be costly
The use of robotics and automation in warehouses and fulfillment centers can reduce the in-person contact that facilitates the spread of COVID while also cutting down on human error and increasing number of these facilities have become automated, using some form of ASRS, while Autonomous Guided Vehicles (AGVs) are starting to replace forklifts and other vehicles manned by humans.
However, retrofitting warehouses or constructing fulfillment centers with built-in ASRS capabilities can be costly. Many forms of ASRS will utilize at least several industrial robotic systems. The price tag of each one, after application-specific technology has been added, can run up to $150,000. And these expenses are separate from any specific construction costs to accommodate the technology. Supply chain companies need to carefully consider cost barriers before investing heavily in supply chain automation.
Robots can’t perform every task
Today’s industrial robots are wonders of technology but do come with limitations. They generally require smooth surfaces or specially fitted workspaces to operate, and they still lack the manual dexterity of humans. Robots are also usually restricted to a specific area of a building.
Tasks such as moving office equipment from one section of a facility to another will still require employees. And industrial robots lack the capacity to make real-time decisions based on stimuli outside their own tasks. Their inability to deal with these stimuli, which could include emergencies within a facility, is a significant limitation of supply chain automation.
Technology is not a replacement for good management
Sophisticated logistics software can execute contracts electronically and provide a detailed, real-time snapshot of a supply chain’s processes. Robotics can make product distribution much more efficient and error-free. But no amount of supply chain automation can replace creative thinking, strategic planning, or the need for human managers to deal with issues such as sick days or other personnel issues.
Technology can complement strategic partnerships with plastic pallet pooling companies like iGPS, who can provide pallets with smart features and standardized dimensions that make them ideally suited for automated warehouses. A good pallet pooling company will also effectively manage their partners’ pallet supplies, shipping, returning, and recycling pallets as needed. This frees up their partners to focus management efforts on other aspects of the supply chain, enabling them to find other efficiencies and help reduce Total Cost of Business (TCOB).
Supply chain automation can help businesses improve their logistics management, weather current supply chain disruptions, and stay competitive as the world economy continues its struggle with the pandemic. But companies should carefully consider supply chain automation limitations as they plan future technological investments.
Companies investing in supply chain automation use pooled iGPS plastic pallets for all their shipping needs. Our pallets are ideal for all types of warehouse automation and help reduce your Total Cost of Business. For more information, contact us at 1-866-557-0047, email a specialist at [email protected], or visit our contact page.
