Big Picture: The state of automation

Like his competitors, Khodl attributes the interest in robotics, mini-load automated storage and retrieval systems and shuttles to the explosive demand for piece picking. And while e-commerce is a major character in that story, so is the demand for smaller and more frequent deliveries to store fronts, especially in urban areas. “If a store is getting a pallet, it’s a mixed pallet. Instead of a case, it’s getting a tote with eaches. And they’re loading the trailer in the reverse order of the stops so they can sequence the deliveries,” says Khodl. That, he adds, assumes that a retailer is even sending out a full trailer. Increasingly, retailers are going to smaller trucks and vans because of congestion in urban areas. “All of that requires more touches in the distribution center, which means we have to find new ways to be more efficient to reduce costs,” says Khodl.

What will drive automation in the future? Khodl thinks urban congestion will play a major role. “By 2020, there will be 20 mega cities on the planet with 20 million people,” he says. “If Los Angeles, Cairo, New York, London, Frankfurt, Dubai and Shanghai are all mega cities, how are we doing to do distribution into those cities?”

The answer, he adds, is that distribution will have to be space-saving, efficient and use as little labor as possible. “We’ll have to put facilities near these cities, which means that land and labor is going to be expensive,” Khodl says. “And, in an e-commerce world, that’s going to mean more piece-picking solutions. I really think we’re just seeing the tip of that iceberg.”