Online Grocer Pumping Millions into Robot-Tech for Distribution Warehouses

Online grocer, Ocado, is investing millions in warehouse robotics. The company spent a whopping £42.8 million on new robot technology for its warehouses, in a bid to improve productivity and streamline the business for the future. Ocado’s Chief Exec, Tim Steiner, has described the last year as “transformational”. Is Ocado alone in its vision of a robotic future for the retail sector?

Apparently not. Amazon significantly expanded its army of warehouse robots in 2016 and there are now 45k robots distributed across 20 fulfillment centers. This represents a 50% increase on the previous year and is a clear sign that large retailers are keen to invest in innovative technology to boost warehouse efficiency.

Expanding Retail Sector

The retail sector is projected to hit $5.48 trillion in the US by 2020. Retail contributes $2.6 trillion to GDP and is the single biggest employer in the US. Amazon has the largest slice of the pie, claiming around 43% of all online purchases. The problem is that retail is intensely competitive. Customers are increasingly shopping online and profit margins are being squeezed left, right, and center.

Manufacturers and retailers need to do everything in their power to increase productivity and keep operating costs low. Modern warehouses with climate control, LED high bay lighting, and plenty of room for inventory can be customized to maximize tracking and capabilities, order picking, and efficient employee deployment, but there are limits to what a human workforce can achieve.

The Benefits of Robots

No matter how motivated and well-trained your human workforce is, they will make mistakes, slow down when they get tired, need statutory breaks, holidays, and expect to be paid the minimum wage. All of this impacts on your productivity and efficiency metrics. Investing in robotics for warehouses and distribution centers is a big cash outlay, but it could pay dividends in a few years.

Amazon uses a range of different robots in his warehouses, from large robotic arms that can move pallets of inventory to small Kiva robots that can haul 317 kilograms at 5mph. Investing in robot tech is the future and retailers such as Ocado and Amazon are keen to innovate in the name of productivity.

“It [Kiva robotics] has been a great innovation for us, and we think it makes the warehouse jobs better, and we think it makes our warehouses more productive,” Amazon said after acquiring Kiva.

The Future

Robotics and AI are becoming more mainstream by the day. Having a robot in our home is no longer the stuff of movies. The Dyson 360 eye robot vacuum cleaner can clean your home while Amazon’s Echo controls your lighting, heating, and will even switch on the washing machine. The use of robotics in the industry is nothing new, either. Manufacturers have been using robotics for many years, particularly on production lines where robots are far more productive than humans.

The biggest fear for many is that robots will take jobs away from humans. Whether this fear is realized remains to be seen.