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2020 and beyond: Automation and robotics have become essential

Date : 4 Jan 2022

Researcher : Yip Wai Fong


Faced with unprecedented challenges due to the Covid-19 pandemic, companies find that they must embrace more technology and automation to weather the uncertainties.

The first ever lockdown imposed on the city of Wuhan, China on January 23, 2020 to contain a virus later dubbed as COVID-19, was the beginning of a global tailspin disruption. Soon, lockdowns swept across the world like waves as the virus spread and mutated.

When the border closures progressively relaxed and the economy reopened, ports and warehouses were flooded with shipments and imports that had been piling up during the closures. Workers had quit or retrenched during lockdowns, resulting in a chronic labour shortage, while demand for delivery services increased due to a boom in online shopping.

For many companies, resolving labour shortages and gaining access to real-time data to navigate supply chain concerns have become major priorities. In the maritime industry, for example, blockchain-based consortiums like Tradelens and GSBN have expedited the digitalization of the shipping process. Global logistics companies have sped up their investment and deployment of new technologies for delivering goods to online customers. Apart from solving labour issues, automation was also deemed necessary because COVID-19 has encouraged the preference for contactless handling of material.

For example, in Malaysia, DHL and its partner Pen Aviation are exploring cargo drone delivery for last-mile port logistics. Drones will be delivering packages up to 12 kg from cargo ships to ports and vice-versa in a proof-of-commercialization exercise expected to

begin at the end of the year.

The Smart Automation Grant, a government grant-matching programme to assist the local manufacturing and service sectors in 2020 to accelerate automation in their operations, was also initiated in 2020 and has received a total allocation of RM100 million in the Budget for 2022. In the palm oil sector, hit by a nationwide freeze in foreign labour intake to control the pandemic, it allocated RM60 million to the setting up of the Palm Oil Mechanization and Automation Research Consortium (MARCOP) in November 2021, to explore automation by drones and IoT in palm plantations. Sovereign fund Khazanah also became one of the investors in Poladrone, a local drone service provider specialising in the plantation sector, when it sought funding in 2021. Poladrone raised US $4.3 million in its October seed round that year.

Autonomous mobile robots (AMRs), whether as goods-to-person or person-to-goods solutions, have become increasingly important for fulfilment centres due to the rise in online shopping in some countries. According to reports, Amazon's newest fulfilment centre in Stanton, US, features 10,000 robots, the majority of which are AMRs, compared to 1,000 human workers. AMRs are also utilised in DHL's warehouses in the United Kingdom, the United States, and Europe. DHL expects to deploy up to 2000 AMRs in 2022 as part of its framework agreement with Locus Robotics. In addition to AMRs, automated forklifts for pallet pickup and put-away were introduced in US and UK warehouses in 2021. DHL says that by 2030, it will have invested USD 2 billion in supply chain digitalization.

Another logistic giant, UPS, has also had a partnership with Locus Robotics since 2020. The AMRs at UPS are integrated into its in-house Warehouse Execution System, developed with its software partner Softeon for real-time monitoring. UPS was also one of the earliest to get approval for drone delivery services in the US, delivering vaccines by drone in August 2021. In December 2021, it opened the Asia Pacific Innovation Centre in Singapore with the goal of testing emerging technologies in the supply chain. Plans for the centre include collaboration with academics, sharing of best practices, and the "expansion of UPS’s innovation centre to other parts of the world".

In the US, FedEx, which has been testing robotic autonomous delivery for small items since 2019, expanded its research into autonomous vehicles, partnering with autonomous delivery vehicle maker Nuro in 2021 to test their vehicles in a multi-year, multi-phase pilot program.

Robotic adoption has in turn become the driver for more innovations. One of the on-going innovations is the development of more dexterous and flexible robots to handle various shapes and sizes. Boston Dynamics’s Stretch and Pick, RightHand Robotics’s RightPick, and Ocado and Covariant’s picking robots are all designed to partially replicate a human picker, which is still the best suited to the role. However, the spike in injury rate among Amazon’s workers, as its fulfilment centres became much busier from the surge of online shopping, has made a compelling case for automating various forms of material handling.

Another incentive for innovation in robotics is simply technological advancement. EV maker Tesla, building on its AI and autonomous driving know-how, announced in August 2021 that it would be building humanoid robots. A prototype, which will be able to do "mundane" tasks, including "grocery shopping", can be expected to be unveiled in 2022. Amazon introduced in November 2021 its own line-up of custom computing chips, designed for the machine learning tasks that underlie many robotics functionalities. Amazon claims that its chip costs 40% less than those of competitors in the market.

Technology has shown that it is capable of mitigating some of the challenges in the supply chain made worse by the pandemic. Moving past 2021, recovery is still uncertain but new consumer behaviours, such as shopping online and travelling less, have taken hold. In this setting, automation and robotics are increasingly becoming a strategic plan to stay ahead of competition and manage disruption.

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