The world has changed so much around us. Streets of Bombay (Mumbai) now are as empty as let’s say my alma matter in Stillwater, Oklahoma; a small college town. I didn’t think this would ever be possible in Bombay, a fantastic megapolis with a population of 20 million. I love driving, but ever since shifting to Bombay, the only time I drove was if I was up early on a Sunday.
As I write this, we are in 2nd phase of a countrywide lockdown. As of now this is scheduled to end May 3rd. This has been done to contain the spread of the Covid19 pandemic in India. I don’t believe any other nation especially as large and populous as India has enacted a nationwide lockdown. Everything except the essentials (as defined in an outline) are closed; be it factories, offices, vehicular movement you name it. India has thus far managed itself well in containing the pandemic. There are many theories out there on various curve shapes, economy, vaccines and what not; I won’t get into them. I believe we may have found a new ROI (Return of Investment) enabling us to enter an Industrial revolution.
As I elaborate on this, a brief history would be useful to set the context. I moved back to India in 2011 and started focusing on intralogistics automation. From 2011 to 2013, I was like a bag packer doing business development, if there is such a thing. I met many potential customers, vendors, partners; there were many interesting conversations and dialogues but no Purchase Order. Things started looking up around 2014 and have been so. Its still very tough to convince many potential customers of the benefit of ASRS (Automatic Storage & Retrieval Solutions) and intralogistics automation mostly because there is no ROI. In mature markets just the worker compensation factor gives you an ROI within 3-5 years. In India the average warehouse worker salary is very low. The capex intralogistics solutions demand can’t be justified just on this metric alone. Having said this, any company which is growing and is healthy and looks beyond this ROI metrics has invested in some form of intralogistics automation.
Around 2016 e-commerce giants started focusing on India; simply because of the size of their operations they had to invest in intralogistics automation for their fulfillment centers. This has brought in and continues to bring many best practices in the warehousing industry. Back in 2015 you could count the companies servicing this sector in one hand, but not anymore. Even with all of this, whenever the question of ROI comes, many potential projects either vanish or are stalled; understandably so.
Enter the Covid19 era. These are unprecedented times and questions of, when its going to end, or how it’s going to end, is all a matter of speculation, and best educated guesses. However, what is in place and will continue for some time is “social distancing”.
This has led to question like:
- How to run an operation with minimum congregation of workers?
- How can we reduce multiple touches of products, as much as possible?
- Lastly and more importantly availability of workers.
Most of the workers in factories and warehouses are migrant workers – the true muscle power of India. However, many such workers are daily wage earners and with everything shut, many have been forced to return to their homes or stay put. They will not flee back to cities or job sites any time soon. I am sure the ordeal out of this situation will be etched forever in their memory. This leads to a situation of acute labor shortage. Further the labor that may be available will need extensive skill up. The restrictions of how many can work together at a given time will force organizations to look at alternatives. Further the current pandemic will force organizations to develop business continuity plans. “Expect the totally unexpected!”
The knight in shining armor will be automation. Many of my customers who have invested in automation some years back, are able to comply with the government guidelines and restart their factories in a jiffy. Something that may have been impossible, had they not. Granted, restarting operations isn’t as simple as I put it, there are other supply chain issues beyond the four walls of the factories/distribution centres that they need to reconsider. So, I believe India may have just found a new ROI to justify intralogistics automation!
We asked our customers producing essentials about how ASRS is helping them adapt to the impact of COVID. Their testimonial strengthens the case the above article is putting forth.
“Pre Covid era, partnering with Daifuku for the ASRS, helped improve our stock management and dispatch efficiency. Post Covid we see the reduced dependency on labor as a huge savior; as there aren’t many available. This in fact is the biggest challenge faced by all factories that are termed essential. ASRS is enabling us manage dispatches with minimal staff, so we can divert the available workmen into production.
Our faith in automation has been re-affirmed, and this situation will now make us revisit our investment plans into automation to be future proof.”
– Mr. Sanjeev Shah, Partner at Everest Spices
“We are a mid-sized company, engaged in manufacturing of Terminal Blocks, a component that finds wide spread use from electrical panels to medical equipment to railway coaches and so on. We need to handle approximately 20 thousand SKUs of semi-finished and finished components and our orders are generally processed in combination of these. For the last decade or so we have been placing our bets on automation in manufacturing and about three years ago we started our journey in automating our warehousing and material handling systems. We deployed a bin ASRS by Daifuku in 2019.
During lockdown we have been permitted to begin operations with only 1/8th our strength of people and now it has become extremely obvious that without proper automation in warehousing we would have been in a mess. Some of the gains that I can clearly count are:
- Given the restrictions in movement of people, availability of workers is uncertain and it truly matters that our workers are suited to various tasks. We can easily place workers from manufacturing into warehousing without them having to understand / identify all the SKUs or undergo extensive training.
- Social distancing is easy, there is no question of workers running into each other in narrow aisled stores.
- Also we are able to combine picking and packing operations or even standardization and store in operations, which minimizes the number of touches that a product undergoes.
- The biggest gain though remains the reduction in number of personnel needed to run the warehouse efficiently.
These trying times have strengthened our belief that going ahead automation will become an even stronger lever to be used in building a crisis proof organization.”
– Mr. Jiten Saheta, Director – Operation, Connectwell
About the Author
He has a Bachelor’s in Electrical & Computer Engineering from Oklahoma State University, USA. Asim moved to India from the US in 2011 and since has been pursuing his passion for bringing in the world’s best practices to the supply chain & warehousing sector in India. Asim loves the challenge to explain local business owners on what an ideal factory should be by leveraging automation.
(Edited by Anu Choudary)
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