This Month in Modern: Startup buzz is accelerating technology investment

One of the running themes this year has been how the pandemic has acted as a “great accelerator” for so many of the trends, challenges and innovations that define the environment in which we operate.

For one, it intensified the pressure on our global freight networks that were already bursting at the seams. That accelerated adoption of new software and automation to streamline operations to meet customer demands—in order fulfillment and delivery—despite shrinking labor availability and freight capacity while e-commerce volumes skyrocketed.

And as we pointed out in our Logistics Management and Supply Chain Management Review Virtual Summit in December, the crisis also accelerated the exposure of weaknesses in our current operations, and forced many to rethink the best way to rebuild their supply chains with resilience in mind. And for some industries, it even forced a major rethinking of how their business is done from the ground up.

But when history is being written, we may find the acceleration in technology and automation investment due to the persistent demands placed on our warehouse/DC operations to be the greatest, long-term upside to having managed in this unprecedented time.

Starting on page 60, senior editor Roberto Michel offers his Big Picture: “Dissecting the startup buzz.” He’s been tracking how the investment community has been placing sizable bets—staggering numbers in some cases—on startup companies with artificial intelligence (AI) and robotics innovations specifically geared for DCs and fulfillment centers.

“For many investors, it’s an attractive market due to the extraordinary growth of e-commerce,” says Michel. “And while the fundamental driver for this AI and robotics startup activity is clearly tied to the labor availability issue, the startups I interviewed aren’t narrowly focused on replacing human labor with robots.”

The startups in the mobile robotics space are adding more analytics and dashboarding for managers, says Michel. “Usually, the value there lies not so much in automating what was once manual, but in optimizing a process, adding better analytics over issues like flow and productivity, or making sure different zones of automation are working better as a whole.”

Michel adds that it’s an over simplification to think of the whole reason for this startup activity as being the need to replace people with automation—refreshingly, that’s not the case. “What we’re going to see is that it’s more about making the operation better and using a mix of hardware, software, and yes…people.”

As this level of accelerated innovation continues to evolve, we’re going to start seeing more System Reports like this month’s featuring Bergen Logistics (page 22), an operation benefiting from early robotics and automation investment.

“From basic point-to-point transportation, we’re now seeing robotics solutions capable of performing more tasks in the DC,” says executive editor Bob Trebilcock. “That’s the case at Bergen, where the solution from their robotics vendor not only does point-to-point delivery, but also storage, retrieval and slotting much like a shuttle system. I’m looking forward to seeing what comes next in this space.