Why Robots are Gaining Traction in the Supply Chain

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Robots are gaining traction across the supply chain.

According to McKinsey & Company’s recent Industrial Robotics report, the lower costs of producing robots accounts for more than a 50% drop in cost since 1990 and their use translates into an impressive productivity boost. It isn’t just the lower cost of the robot itself, however, that is accounting for the gains. The expansion of applications involving robots, advances in underlying technologies and the current state of the U.S. economy account are all driving increased demand.

Electronics companies claim the highest level of robotics adoption reaching a 32% share of the total supply in 2017, with 121,300 units. Given their ability to precisely handle extremely small parts at high speeds, they maintain quality as well as optimize production cost. While typically this segment uses traditional robots and Automated Guided Vehicles (AGVs), the number of collaborative robots is rising. Sixty-five percent of the robots in the electronics industry are chosen based on performance—accuracy and speed— and 60% because of total cost of ownership, representing the top two purchasing criteria.

AGVs have long been marching (or sliding) to markers, magnets and vision technology to navigate. They work faster, surpass the weight-lifting capabilities of humans, and work without intervention.

Spurred by e-commerce sales, fulfillment and distribution, speed and accuracy are critical to remaining competitive. These robots move products from bins on a conveyor system into cartons, to a sorting system, or to kit assembly. Today, the same robot can pick through all sizes and shapes of different items and do it accurately. The ability to track inventory and supply chains in real time is dramatically enhanced.

DHL is spending $300 million to quadruple its number of warehouse robots, modernizing 60% of the company’s warehouse space with IoT sensors and robots. Amazon’s use of robots for fulfillment translates into a 50% increase in facility capacity.

Companies such as Honeywell Intelligrated are providing robots that can pack and unpack cases, pick and stack mixed SKU’s on a pallet, and stack and wrap pallets in one process.

These rapidly expanding capabilities will continue to bolster use across the supply chain.


Robots are said to be getting smarter fast. But moving, picking, packing, etc., all follow a prescribed set of motions, so what technologies are turning dumb  pieces of equipment into really smart assets?

  • Mobility opens intralogistics automation to robotics application
  • LIDAR and computer vision to single out items as well as to autonomously navigate space and communicate with each other regarding obstacles and congestion, maximizing speed and efficiency
  • Machine learning and computer vision are enabling robots to rapidly train themselves expanding their perception, navigation, and dexterity capabilities
  • Some robots are using the same algorithm used by air traffic controllers
  • 3D optics are used to recognize objects; it uses feedback from sensors in its grippers, and artificial intelligence, to improve its technique over time
  • The robots use computer vision and machine learning technologies to locate and manipulate individual items in all their variety
  • Robots receive orders via a wireless connection then disconnect and travel autonomously
  • AI, machine learning and smart robotic hardware are rewriting supply chain engineering
  • AI increases business adaptability, improves speed and accuracy, reduces labor risks and operating costs
  • Use of the cloud helps companies gain increased computational power, storage, and communications

The reality is that as applications spring up, technology is adapted to address a myriad of challenges, seemingly as fast as they appear.

The U.S. economy and the economy of robots

With a current U.S. unemployment rate of 3.6%, low paying repetitive jobs are facing major labor shortages. As baby boomers retire and low-paying jobs are not pursued by younger workers, robots are picking up the slack. Not only do they do the job, they provide productivity and efficiency improvements, reduce labor costs and remove human error from many processes. They operate 24/7, don’t require a coffee break and hardly ever call in sick. Expect them to continue to make great strides as an option throughout the supply chain.

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