Indian industry is graduating fast from go-downs to modern warehouses
Published on : Sunday 01-11-2020
Sangeet Kumar, CEO and Co-Founder, Addverb.
From manufacturing plants to retail stores, how important is material handling to the economy of a country?
We can look at this in 4 stages starting from manufacturing plant to mother DCs, consumption warehouses and finally to the retail stores.
Manufacturing Plant: In a manufacturing plant, raw materials need to be transported and conveyed to the packaging equipment; from here once everything is packed and palletised, it must go into the finished goods warehouse. In all these functions material handling plays a very critical role as there is a certain kind of inventory that needs to be stored, certain inventory that needs to be received at packaging and raw material warehouses, and they need to be brought to the shop floor. When it needs to be brought, it needs to be transported in a certain sequence and at a certain speed. This is what material handling does in a factory; apart from that when the goods are manufactured, they are stored for a certain period, especially in industries like Pharma it can go for a month as well, because the products need to be stored for one month and different quality parameters need to be tested before it can be released in the market. Otherwise also in India, industries such as White Goods, FMCG, Chemicals and Specialty Chemicals do store 3-30 days of inventory. This inventory needs to be mapped like where it needs to be stored, stacked and dispatched in a timely manner according to the needs of the other warehouse, which is at the consumer centre or as per the customer needs. In all these things, when one needs to store, move, and pick inventory one needs methods of material handling. For example, rack storage, pallet shuttle storage, AS/RS storage like single deep or double deep, etc., depending on the kinds of throughput, inventory, and the velocity profile of the inventory in the warehouse.
In the Indian context, the productivity of factories depend highly on how we move these raw materials, packing materials, and finished goods in the factory. Once productivity increases as a country we become more competitive and that boosts the economy as far as contribution of manufacturing to the economy.
Mother Distribution Centres: Where material comes from different manufacturing plants, and goes to the consumption stores. Here goods happen in the form of carton/pallet and goods out happens in most cases. Storage accuracy, density, throughput of both inwarding and outwarding will be managed by the kind of material handling equipment we use. Also the kind of inventory whether to cross dock, store for some time and if so, how long to store, etc., are all possible due to the kind of material handling methods and equipment we use.
Consumption Warehouses: Very near to the retail stores, sometimes a part of the retail stores, Micro Fulfilment Centres revolutionised the consumption of the retail e-grocery segment. Equipped with the modern day material handling equipment such as AMRs or AGVs, shuttle systems, mini-load AS/RS systems, picking technologies such as pick to light, pick by voice or pick by vision and warehouse software such as WMS/WCS/WES, these consumption warehouses enable delivery within 2-4 hours of ordering.
Retail Stores: For the goods to reach the retail stores, there is primary transportation where in from manufacturing plant to distribution centre in case of manufacturer, in case of organised retail, purchasing happens from mother distribution centre to either consumer warehouse and from a consumer warehouse to retail store. This plays an important role to the economy due to the sheer amount of work involved and the complexity of the material handling involved to achieve the objectives of customer satisfaction, low cost operations and overall supply chain efficiency.
In most consumer companies those goods are consumed on a daily, weekly, or monthly level and have their own warehouses in major consumption centres with populations of more than a million. In the Indian context, there are 35 such cities with consumer warehouses in and around them. Here, consumers have expectations that they need to get goods as soon as possible and material handling plays a very important role to ensure maximum throughputs, accuracy of dispatch, accuracy of inventory, etc.
The consumption rate of Indian economy is low vis-a-vis that of Chinese, or US or UK economy, however this is significantly improving and if this growing trend needs to be served then material handling is something that can’t be ignored.
The manufacturing industry is still heavily reliant on conventional MHE even as automated options are available. What are the impediments in modernisation?
Indian industry is graduating and is graduating fast from go-downs to modern warehouses. In yesteryears’ go-downs, the goods were kept on the floor in an unorganised fashion and material movement used to happen through people carrying the goods from one point to another point. But due to the rise of ecommerce, GST and tremendous competition, some companies started taking the first step to build quality warehouses, i.e., warehouses that are structurally strong, stable, with good flooring and a height of minimum 7m-10m, and these companies are gradually moving towards modern ways of handling material. Still, this is 20-25% of total warehousing, and is not enough to bring a significant transformation in material handling. In fact, automation is much more meaningful when vertical space is utilised along with reasons such as throughput requirements, which can’t be achieved by increasing labour, space constraints such as single facility operations, equity or customer demand for instant gratification such as a 2-4 hour delivery window, then people need automation. So, after knowing the levers of automation in the Indian context, let’s look at the major impediments of modernising material handling:
1. Infrastructure availability – Height, quality, floor of the building, etc., is one of the major impediments to adopt automation and modern day material handling equipment. Some of the green field warehouses are built with good standards, but a majority of the warehouses are not.
2. Knowledge of the people – This includes 2 parties:
Automation providers – Most automation providers do not educate people enough about the different types of automation solutions. During our initial days, we gained the trust of customers through PoCs where we demonstrated the capabilities of the systems at a miniaturised scale before implementing at a large scale; virtual commissioning of the solutions, workshops and training, etc. More and more players should do such knowledge workshops, supply chain meets, PoCs, etc., to educate the customers and to widen the knowledge of the customers and to enable an informed decision making.
Automation Purchasers/Potential Clients – Often wrong KPIs are used to measure the RoI of the equipment by Automation Purchasers or Potential Clients. Substituting manpower with automation gets justified in developed economies such as Europe and the US, but not in India. Here, the parameters that justify automation should be – solving the real problems like scale of operations, picking accuracy, reduction of reworks, increased throughputs, storage density, etc. More and more projects and operations people must follow this to get approvals.
The very mindset that warehouse operations can be done by people who have limited knowledge of the technology – Though this scenario is changing, still this is one of the major impediments of automation.
What are the changes witnessed in conveyors and bulk material handling systems in process industries?
The biggest change in conveyor technology is the advent of IoT, which is making the conveyors more and more smart, as in now they can track everything they are conveying – case/crate/pallet, etc., at any point of time and at all times. Along with this, the smartness is helping on the predictive and preventive maintenance, where the conveyors are able to understand when they are going to fail, and can warn the operations people so as to get support and keep on running. The robustness because of the smart technologies is making businesses go for smarter conveyors and as an automation solutions provider, we also strive to achieve this.
In case of bulk material handling – I would restrict the conversation around handling pallets such as 1t, 1.5t – instead of going into the powder handling or liquids, etc. In bulk material handling, amongst the technologies that are coming in, companies are realising the strength of mother & child shuttle systems, AS/RS systems in terms of velocity, storage density, throughput, etc; these systems do have some limitations but the advantages they provide overshadow the limitations. Even the aisle, the cross-aisle, or the normal aisle are getting eliminated by these technologies.
Are adequate safety features embedded in material handling equipment?
Yes, all the equipment has moving parts and they are complying with the standards of EN, CE Certification, SIL level 3, etc. Like our pallet shuttle, mother shuttle do have CE certification and we are building our AMRs also on the same principles and are getting required certifications. Through these certifications we ensure that we have mechanical guarding in place, emergency push buttons, pull cords, safeguarding all pinch points, etc. Apart from that, robots have a SIL level 3 safety system where the bot reduces the speed when struck with an obstacle and ultimately stops. In all our critical equipment we have AT relays, and AT PLCs which take care of the safety sensors and safety components of the equipment, and for sensitive areas we use ATEX certified devices. We take care of all these practices and follow international safety standards, as we build products for the world.
How are the emerging technologies like IoT, Lights, Voice, etc., are changing the warehousing landscape?
The advent of new picking technologies using light, voice and augmented reality enhances human productivity multi-fold by providing continuous visibility of the product, ensuring picking accuracy and by reducing the walking distance travelled by an operator through efficient slotting and other such methods in the warehouse. For example, Addverb's voice picking system, Khushi (Pick by Voice) offers paperless hands-free order picking and fulfilment solutions that give high accuracy and productivity. With extremely easy to operate instructions, upon activation, Khushi gives verbal instructions to the picker on which location to go, how much quantity to pick, and a double check on the product picked, and then the location of the next order. If an operator can pick up to 60 items in an hour when he is using pen and paper to search and locate the item, the same operator can pick up to 240 items in an hour if he is using a Pick-By-Voice. It can be installed on any Android smart phone and is available in 14 Indian languages including Hindi and English. Khushi is enabled with speech to text and vice-versa algorithms enabled with AI & ML.
Similarly, Quimo, Addverb’s pick by vision system is another Person to Goods picking technology designed to enhance the productivity of the pickers and the overall order picking accuracy. It is an augmented reality system, offers hands-free operation with 100% error-free picking and improves quality control. It is best suited for large DCs with thousands of orders processed daily. Vision picking glasses comprise an integrated navigation system that guides the operator through AR and provides the shortest travel path to reach the destination. Integrated camera in vision picking glasses optically displays order information providing the source and target locations. They are connected with an existing network for real-time inventory management and updation with the stocks accordingly. Pick by vision fits the requirement for fast picking environments enabling workflow improvement and process optimisation.
Today ecommerce is the driving force behind digitisation of warehouses. What are the dominant trends here?
Ecommerce is fundamentally changing the very way how the supply chain and warehousing industry operates. The promptness of the service, ensuring product availability, achieving low-cost last mile delivery operations have never been more challenging than in this Covid period. A few of the common trends that have been dominating since the booming days of internet till date include:
1. Data driven decision making: Ecommerce paved a royal way for the data driven decision making that includes both real time data and the historical data in deciding end to end warehousing functions starting from warehouse slotting, inventory management, labour allocation, picking strategies, outbound sequencing, etc. This also plays a critical role in asset maintenance such as predictive maintenance and preventive maintenance, and is forming the bedrock for the numerous applications of machine learning, deep learning, etc.
2. Increased use of automation: E Commerce is one of the biggest levers of automation to cater to the limited TAT of the entire supply chain from the time a customer places an order to receipt of the order. This small TAT forces the players to be on their toes at every step of their supply chain to minimise the errors, increase the speed of operations, hold more number of SKUs, and increase the overall operational efficiency. All these objectives can be achieved only through automation, especially the advanced automation such as AMRs, IoT solutions, warehouse software, shuttle systems, picking technologies, etc.
3. Rise of MFCs: eGrocery is the latest trend in the retail industry across all the developed, and developing countries of the world. With miniaturised warehouses situating close to the consumption hubs, they enable delivery of grocery items within 2-4 hours of ordering. These things do capitalise on the e-commerce model of supply chain operations using the latest automation technologies and warehouse software.
4. Shift from bulk material handling to unit items handling: Ecommerce industry shifted the ordering quantity from bulk to individual items, which led to the rise of industries like 3PL which takes care of the order fulfilment. Here each item needs to be sent for a different address and within a limited time. This cannot be achieved by increasing man power and there is also a constraint of space exists. This again is leading to the invention of sortation technologies such as sorting robots, sortation through smart conveyors and other parcel handling technologies.