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Robots Will Fuel the Need for Always-on Supply Chains

When it’s deliver-or-die, supply chains become the lifeblood of a company. To that end, the fashion industry has embraced technology to navigate today’s hyper-complicated supply chain, with myriad solutions shaping the first, middle and last mile. Call it Sourcing 2.0.

As consumers seek to have their products in hand faster and faster, robots that can be built speedier than humans could infiltrate supply chains in a bigger way.

The always-connected consumer has given rise to the always-on supply chain, which is integrated and continuous, creating actionable decisions to serve that consumer. And now that an always-on supply chain has become vital to survival, companies are increasingly turning to robotics and automation to accommodate.

Fifty-one percent of the 900 supply chain professionals surveyed for the 2016 MHI and Deloitte Annual Industry Report said robotics and automation would either be a source of disruption or a competitive advantage, up from just 39 percent last year. Those fields were of more importance than other already in-use technologies, like inventory and network optimization tools and sensors.

The concept is a simple one: Robotics are making things more efficient, and efficiency is key to improving the supply chain. Simple or repetitive tasks, like moving products from one part of a distribution center to another—or even those done in hazardous environments—can be taken off workers’ hands, which lets the company improve both productivity and safety, and lets the worker focus on more important tasks.

Today’s robots are more human-like than ever; many can sense certain things, do tasks with their “hands,” remember and be trained to do tasks like picking and packing or testing and inspecting products. They can even tell when a worker is near them and act accordingly to keep conditions safe.

“Robotics and automation are impacting the supply chain industry because flexibility and autonomy are increasing while price is decreasing,” said Scott Sopher, principal and leader of the Global Supply Chain practice at Deloitte Consulting LLP. “Robotics will displace manual labor tasks, which means employees need to switch to new roles to program and operate improving robotics systems.”

Thirty-five percent of respondents have already integrated automation technologies into their supply chains, and that number is expected to hit 74 percent in the next six to 10 years.

“We’re going to see robots with vision,” Scott Melton, regional manager of robotics company FANUC America West told MHI. “3-D vision for bin picking, for handling mixed products, a technology that allows you to sort product by size, allowing mixed products to come into the robot zone.”

Driverless vehicles and drones came in alongside robotics and automation as a most disruptive technology—each had a 12 percent year -over-year spike in growth.

As is typically the case with change, however, there are three reasons more companies haven’t jumped on the supply chain innovation bandwagon: no clear reason to do so, no know-how to use the technologies efficiently, and simply because they’ve always done things the way they’ve always done them.

But, as the report noted, “The transformation to a digital supply chain alters the fundamental characteristics of traditional models.”

Automated equipment and sensors help with quick data collection, increased computing power has fueled the use of predictive analytics and tools like wearables have given rise to the connected supply chain worker. All of that has meant geophysical space is less relevant, that physical assets have been exchanged for information and that the consumer is now a data creator.

“The always-on supply chain is a cross-industry phenomenon that is driving real enterprise value,” according to the report. “Successful companies are starting to quantify benefits that go beyond cost reduction.”

Direct-to-consumer companies, for example, are using inventory and network optimization tools to anticipate shipping based on predicted demand and to alternate shipping models and ship-to locations with drones and drop boxes.

Cost, naturally, is never far from companies’ minds when considering taking up new technologies, but according to Deloitte and MHI, the cost of these innovations is on the decline and companies are seeing faster returns on investments.

Since 2006, the price of a sensor has fallen 80 percent, moving from $2 to as little as $0.40.

“The price of moving data across networks and of securing storage space has also plummeted and there is little reason to think the costs of technology will not continue to decline,” according to the report. “Given these factors, ROI may be even more compelling than some realize.”

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