like the tsunami in Japan several years ago, it puts a big spotlight
on the global supply chain and, in many cases, how fragile that
supply chain can be,” Thompson says. “That’s what we see again
with this awful pandemic.”
While in other cases the answers to such existential questions
might be complex, in this case there’s little doubt that more auto-
mation would seem to benefit warehouse operators in times of
turmoil. That’s why many logistics experts think COVID- 19 will
trigger an increase in automation and robotics investments in the
warehouse sector. “It [COVID- 19] puts the spotlight on compa-
nies and how they’re set up to handle these kinds of disruptions,”
But the driver for investments won’t just be patching over the
vulnerabilities of humans. The impetus will also come from
opportunity. Now that the pandemic has helped untapped the
potential of e-commerce, specifically in the grocery area, there is
little doubt that investments that make the process more efficient
will come in the future. While larger firms made progress elimi-
nating some of the inefficient tasks performed by humans, there
is still room to grow and automate. Investment in innovation,
however, won’t be universal across the sector.
ACCELERATING OR DECELERATING CHANGEAlready, COVID is prompting investment. The pandemic hasforced a wide variety of industries, including healthcare and grocery stores, to automate rapidly. The supply chain isn’t far behind.
“I think that, given the spotlight that the pandemic has put onthe fragile nature of our global supply chain, automation androbotics will gain a lot of attention,” Thompson says. “And foranyone interested in those investments, it will just accelerate thatinterest.”
Will O’Donnell, managing partner, Prologis Ventures, thinksCOVID- 19 has also highlighted the need to rethink global supplychains and their adaptability to meet today’s unprecedented challenges.
“As part of this major supply chain evolution, I expect to seecompanies continue to optimize the operations of their logisticsfacilities, as well as increased investment in robotic systems toenhance processes, as they seek to create environments that prioritize the health, safety and well-being of employees,” O’Donnellsays.
For the big players, increasing their investment in automationis a no brainer. NKF’s chairman Thad Mallory points to companies like Amazon, Costco, Walmart, Lowes and Home Depot leading the way with automation.
“Those companies are going to double down their investmentbecause they’re making money right now, they’re getting moremarket share and they’re going to come out on the other sidestronger,” Mallory says. “I don’t think they’re going to be afraid tomake an additional investment.”
Over the past decade, consumers have become more and morecomfortable with ordering products online. Total e-commercesales for 2019 were estimated at $601.7 billion, which was anincrease of 14.9% compared to 2018, according to The CensusBureau of the Department of Commerce. At the end of 2019,e-commerce sales were roughly 11% of total retail sales. In 2010,they were approximately 4% of total sales.
Coronavirus promises to supercharge that online buying.
“We’ve already seen this increase in e-commerce as a percentof retail sales, and now we’re projecting that increase to be morerapid,” says James Breeze, head of industrial research for CBRE.