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Gartner: Why the Chief Robotics Officer is the New CIO

Chief robotics officer, or CRO, may not be a title often seen in the apparel industry, but according to Gartner, the role must be implemented across supply chain organizations as the technology proliferates and e-commerce demand increases.

When it comes down to it, many organizations lack the internal robotics and automation expertise and don’t know enough to make an informed and strategic decision on the subject. The vast majority of companies have yet to figure out who owns, and should manage, their growing fleets of robots. Yet retailers like Walmart, Gap Inc. and American Eagle Outfitters are expanding their robotics fleets across distribution centers to optimize fulfillment.

Dwight Klappich, vice president analyst with the Gartner Supply Chain practice, says that a CRO should have a composite of skills from three broad disciplines: engineering, IT and business. Of course, this is a challenge as these skills typically come from different cultures, such as, for example, engineers building failsafe, foolproof systems, while IT players want to “fail fast” and move quickly. Those with a business background, meanwhile, would focus first on metrics such as ROI and cost of ownership.

Klappich compared the present landscape of managing robotics and automation to that of the chief information officer (CIO), which only became commonplace in the 2000s. While the title started off as a strictly IT-based role in the 1980s, it expanded as IT become a more pervasive, strategic function in the business, particularly as computer-driven technology infiltrated a range of sectors.

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“This [CRO] role in a sense has some elements of HR, but now instead of hiring a person, you’re hiring the thing,” Klappich told Sourcing Journal. “But they’ve got to talk up the organization, they have got to be able to have enough knowledge to talk to the real deep people. The CRO doesn’t need to know how every robot works, but they need to understand enough about it to know the engineers are saying ‘this will work’ or ‘this won’t work.’”

Unsurprisingly, Klappich pointed to Amazon as the clear leader in the retail space, operating “five years ahead of most of its competition.” While the e-commerce giant acquired robotics manufacturer Kiva Systems all the way back in 2012, Klappich noted that Amazon’s success in building out its robotics fleet came through its ability to iterate with different kinds of bots for various purposes.

Like the IT departments that developed over decades to take ownership of new issues, Amazon sought to address many concerns covering the robotics field early on. Retailers today are going to have to do the same if they want to deploy the technology effectively within their warehouses and fulfillment centers.

“How do we go about sourcing and buying? What governance mechanisms do we need in place? What does a robotics contract look like?” Klappich said. “Should we do robotics-as-a-service or should we buy them up front? What’s the effective life so that we’re factoring that into our cost of ownership and switching cost analysis? This is all stuff that to the vast majority of companies is brand new.”

One of the benefits of robots is that use cases can always start small, meaning upfront investment isn’t as much of a risk. This affords retailers the freedom to experiment before making a full-scale decision on where it benefits. Klappich said Gartner clients typically will figure out four or five use cases before defining goals for them. Businesses can then scale up or down depending on if the trial achieved the desired results.

“The majority of companies now typically start with one type of robot doing one task, but we believe, and we’re already starting to see this, in two to five years, the majority of companies are going to have heterogeneous fleets of robots,” Klappich said.

Berkshire Grey unveils automated pick and pack

As the demand for robotics continues to heat up, so does the deployment of new technologies dedicated to supply chain automation.

Berkshire Grey, which offers AI-enabled robotic solutions, went public on the Nasdaq in July and recently announced the global availability of its Robotic Pick and Pack (RPP) solutions. The RPP solutions are designed to automate picking and packing of items directly from inventory totes to outbound customer shipping packages, ultimately with the intent to improve operational efficiency for fulfillment centers, reduce shipping costs and lower the environmental impact of e-commerce orders.

Berkshire Grey’s RPP solution is already deployed in SoftBank Logistics’ flagship fulfillment center in Ichikawa, Japan. It is engineered to integrate with e-commerce operations commonly run by retailers, third-party logistics (3PL) providers and pure-play e-commerce brands.

The system was designed and built to optimize SKU processing, improve picking and packing efficiency, and speed operational throughput. It autonomously picks and packs consumer orders while ensuring items remain in pristine condition.

The solution features of RPP include zero-pressure placement, so that multiple delicate items can fit safely into a single package without dropping or over-cramming items, as well as advanced machine vision and proprietary real-time planning algorithms to manipulate individual items for placement on the fly.

Additionally, the autonomous dense packing capability leaves less air in each box and reduces the packing materials needed, thereby lowering both the shipping costs and environmental impact of e-commerce orders.

Berkshire Grey’s new launch comes only two months after the robotics provider launched Intelligent Enterprise Robotic (IER) picking and mobility solutions designed to handle a wide variety of SKUs across different environments such as back-of-store, small scale distribution centers, and full scale distribution centers.

Funding rounds galore for robotics firms

And for the non-public robotics companies, money continues to flow in. Locus Robotics, a developer of autonomous mobile robots (AMRs) for fulfillment warehouses, secured $50 million in funding from existing investor Tiger Global Management, bringing its total funding to nearly $300 million.

In August, Locus surpassed the milestone of 500 million units picked, only 94 days after reaching 400 million, showing the accelerating demand for automation within fulfillment centers.

Tiger Global appears to be very bullish on the robotics sector, given that it also led the recent funding of Ambi Robotics, which reeled in $26 million in its Series A funding round after emerging from stealth five months ago.

Ambi Robotics wants to capitalize on the subscription e-commerce market, which is expected to exceed $478 billion by 2025, according to data from Univdatos Market Insights. The company has already launched two major solutions since emerging from stealth: AI-powered sorting system AmbiSort and kitting system AmbiKit. Kitting is the process of taking multiple SKUs and bundling them together in one package before a shipment.

The company’s robotics are powered by an AI operating system, AmbiOS, which leverages proprietary “simulation-to-reality” technology and trains algorithms “10,000 times faster” than competing solutions, Ambi claims.

With the funding round, Ambi Robotics wants to scale its team and operations to support rapid deployments of its robotic systems throughout U.S. supply chain operations. Additionally, Ambi Robotics will expand its product and customer support offerings, with the company saying that there are “hundreds of warehouse associates” across the U.S. working alongside the company’s automated sorting systems.

Ambi is currently expanding its fleet of AI-powered robots across the U.S. with global brands like Pitney Bowes. The company first began generating revenue through commercial deployments in October 2020, installing systems prior to the peak holiday buying season. According to the Pitney Bowes Parcel Shipping Index, U.S. parcel volume grew 37 percent year-over-year, reaching 20 billion packages, up from 15 billion in 2019. Pitney Bowes forecasts U.S. parcel volume will nearly double by 2026, reaching 32 billion to 39 billion annually.