The emergence of e-commerce as one of the key sales channels has disrupted delivery. Delivery services need to be disrupted. With booming e-commerce volumes growing every year at double digits, the entire supply chain is affected. New consumer habits, including the need for fast and free delivery, require operators to invest in technology to modernise their warehouse operations to keep pace with these new trends. Greater and greater volumes, require ever higher capabilities, but can this be done by just an incremental change? Delivery services need to adapt or die. Many articles have been written about Walmart´s efforts to catch up with Amazon by investing in technology exemplifies this trend. But we could write this article with examples alone.
New technologies based on autonomy are reaching maturity and bringing flexibility, capacity enhancement and adaptability to the retail, postal and logistics industries, providing a fluctuating demand that no other automation technology was providing before, and at a much lower cost. This is helping to address peak periods, shortages of workers and reduce delivery costs in a radically different way.
Trends in 2018
In the US, only the consulting firm Accenture projects a 25% growth between 2016 and 2020 in international e-commerce volumes. These volumes increases are driven purely by consumers who largely go online looking for better offers, lower prices and faster deliveries. About 240 million Europeans spent 170 million euros online in 2017 and the main drivers for purchasing online is to find the most attractive prices and free delivery, in particular in Spain and Italy (almost 2/3 of consumers want free delivery).
The acceptance of Autonomous Robots as a game-changer to increase efficiency of operations is growing rapidly. The market for autonomous mobile robots is booming and it is expected to grow over 14% between 2017 and 2024. In terms of volume, the demand for autonomous robots is expected to reach more than 115,400 units by 2024 at a CAGR of around 13% during the forecast period. In warehouse operations, it is expected there will be 51,140 units by 2024.
As mentioned at the beginning of the article, massive investments in technology are being seen across the industry. Postal operators, retailers and 3PLs are heavily investing in technology and warehouse operations improvement to cope with increasing demand and the need for efficiency. This is done either via their own innovation projects, M&A, Venture Capital or CAPEX. Accenture shows us that between 2014 and 2015 incumbents have increased their investments into technology by 41%, and have a CAPEX of 5.1% as percentage of their revenue.
Without any doubt e-commerce has created massive opportunities, growth potential, new business models and an array of options for consumers. These rapid and massive changes however, which have such a structural impact across the entire supply chain of the logistics industry, pose huge challenges in adapting to such a fast pace either in terms of capacity management, investments or costs.
If you pose the question: “which is the biggest challenge today?” across the retail, postal and 3PL industry, the answer would be unanimous: dealing with peak periods. Christmas, Single´s Day, Chinese New Year, Ramadan…throughout the year and across borders, the world is seeing a dramatic increase in e-commerce volumes that poses a threat to capacity management. To take one event, Single´s Day in China is the annual event for lonely hearts, celebrated on 11 November is now 4 times bigger than Black Friday and Cyber Monday, the 2 biggest shopping days in the US calendar. Supported by the Chinese e-commerce giant Alibaba, Single´s Day broke records last year with Chinese shoppers spending over 25 billion dollars.
During peak periods, volumes can increase by 5x or 10x for a period of just 5 weeks, 1 week, or even 2 days. With traditional conveyor belt type technology, retailers, postal operators or 3PL have to invest their thinking only for peak capacity, in 10 years’ time, leaving a huge amount of capacity unused.
Growing e-commerce volumes is driving the workforce need upward. But it is getting harder and harder to hire warehouse operators, and more and more expensive. Eft Supply Chain & Logistics Business Intelligence asked 105 retailers or manufacturers across the globe what their biggest ecommerce challenges were. Available talent and fluctuating demand makes up almost 30% of the main challenge they need to overcome.
Last but not least, higher volumes, new consumer habits, fluctuating demand and labour shortage has made the cost of delivery a major concern for e-commerce retailers.
Autonomy-as-a-Service: bringing autonomy to address the e-commerce logistics challenges
Autonomy-as-a-Service enables the integration of drones of different types (aerial, ground, hybrid) with a variety of capabilities to work together as robust autonomous fleets, in conjunction with other IoT devices and hardware, powering their deployment over the cloud via a single, multi-device compatible user interface to achieve industrial use cases.
The Unmanned Life platform is an AI driven IoT Software-as-Service platform that implements this architecture to enable users to deploy and manage autonomous robot fleets (i.e. drones and rovers) and complex autonomous missions from a single management interface, which can operate on-demand and scale up cost-effectively. It provides a unique, modular, flexible, capacity management capability that no other existing technology can provide.
The platform connects these autonomous industry 4.0 solutions with business information systems and enterprise AI, as well as enabling them to work both indoors and outdoors, connecting through different communication protocols such as 4G LTE or 5G.
The advanced AI takes care of the fundamentals required for autonomous workforces from three-dimensional mapping, navigation and location accuracy using advanced optical sensor capabilities for collision avoidance and human-detection. By definition, the platform is hardware-agnostic and controls any standard autonomous mobile robot and UAV (drone) as well as robotic hardware components like grippers and a range of sensors allowing it to orchestrate and deploy case-specific solutions for various uses, without redevelopment of the core.
Autonomy-as-a-Service: autonomous use cases for e-commerce delivery
Autonomy-as-a-Service enables a wide range of solutions and use cases that tackle key challenges in the Delivery sector, in particular dramatically reducing the initial CAPEX for automation solutions. Unmanned Life´s solutions can be deployed much faster by providing a totally flexible and scalable autonomous mobile workforce, directly answering the key challenges posed by e-commerce to the supply chain industry: fluctuating demand, workforce shortage and costs.
The potential of using autonomous mobile robots to conduct indoor logistics is significant, replacing existing fixed structures such as conveyer belts with modular, on-demand and flexible solutions, providing more cost-efficient automation that can be deployed faster and anywhere for efficient supply chain capacity management. In particular these capabilities can enable the following use cases:
Autonomous sorting for peak periods capacity management and autonomous sorting for return logistics management
The autonomous sorting requires 10x lower CAPEX than traditional solutions and is 10x faster to deploy. Even more importantly, it can help operators save space as it needs almost 3 times less space than traditional conveyor belt type solutions. Finally, by its flexible and modular nature, the autonomous sorting solution can be moved from one location to another, making it an asset: a light solution ideal to deal with peak periods related to e-commerce demand fluctuations or return logistics management.
Moreover, Unmanned Life´s Autonomy-as-a-Service platform enables two other solutions that enhance supply chain capacity management.
Autonomous Inventory Check for inventory management
Unmanned Life offers autonomous warehouse inventory management, through an AI software platform connecting drones and autonomous ground vehicles which work together indoors without GPS over 4G LTE or 5G carrying out identification with barcode scanning.
This autonomous inventory check-up is up to 50x faster than manual, operating in a confined space in a precise and efficient manner. This solution eliminates the need for a manual inventory count, dramatically increasing the speed and efficiency of warehouse operations.
Autonomous Last Mile Delivery with Drones in Remote Areas
Unmanned Life’s AI Platform provides a fully autonomous last mile drone delivery fleet that can be deployed on-demand, anywhere. The System Integration Box (SIB) allows the drone parcel delivery system to be easily integrated on any existing delivery vehicle, without any modifications to the vehicle.
Our solution for last mile delivery improves the efficiency of this process making it integrated, cheaper and faster. Unmanned provides fully autonomous last-mile delivery service with drones, allowing delivery to remote areas.