by Jennifer Hart Yim | Jan 24, 2019 | Blog, Consumer Electronics, Logistics, Supply Chain
Drones and other autonomous technology are actively being utilized in supply chains. Here’s how companies like PINC and Amazon are leveraging this new technology for inventory management.
Highlights:
- Drones and other autonomous technology are actively being utilized today in supply chains.
- PINC and Amazon are using autonomous technology for inventory management.
- By implementing new technologies, operating costs decreased by 20%, successfully boosting operating margins.
It’s been five years since Charlie Rose interviewed Amazon CEO Jeff Bezos on 60 Minutes about new innovations that Amazon was working on. Bezos revealed that Amazon was on the brink of a supply chain revolution involving octocoptor drones transporting parcels: Amazon Prime Air.
Tweets and status updates immediately conveyed consumer excitement that flying Amazon drones could deliver packages directly to doorsteps. And on the flipside, some employees of shipping carriers and brick-and-mortar retailers expressed fear that their respective industries would become obsolete.
Fast forward to the present… While advancements have been made in drone and autonomous technology, such as Amazon’s tests in the United States, Dominos’ self-driving delivery car, and Tesla’s self-driving truck, Bezos’ grand vision still remains a dream for impatient online shoppers.
That aside, drones and other autonomous technology are actively being utilized today in supply chains, and their usage extends beyond the conceived purpose of package delivery. One such use case that companies PINC and Amazon leverage this technology for is inventory management.
PINC: Aerial Inventory Robots
Less than 10% of the 250,000 warehouses and manufacturing facilities in the United States utilize automated storage and retrieval systems (AS/RS) for managing their inventories. Instead, they resort to manual human labor coupled with outdated storage solutions and antiquated inventory management measures. The need for automation in the factory setting is paramount.
PINC, a top provider of yard management systems, pioneered the use of drones in warehouses. Since 2014, PINC enacted the use of flying drone technology (PINC AIR, Aerial Inventory Robots) to track assets in warehouses.
PINC AIR Hardware
These “inventory robots” leverage barcode-reader technology and roam premises in an automated fashion, ensuring efficient inventory tracking. Technically speaking, the drones are equipped with optical sensors which allows them to take pictures of barcodes and obtain information for identifying and counting inventory.
Indoor aerial drones have limited GPS capabilities compared to their outdoor counterparts, and instead rely on indoor location services software to aid in setting the devices’ “travel boundaries” within warehouses.
PINC AIR Benefits
PINC AIR saves time, money, and offers a safer alternative to traditional rolling ladders for companies wishing to upgrade their inventory management system. Businesses spend less on workers’ compensation claims by reducing on-job injury rates. Their robots operate at the leisure of the company, are 300 times faster than a human performing the same work, and possess high accuracy levels. Even a daily inventory check provides a company a plethora of data.
PINC’s aerial drones replace the clipboards and spreadsheets of inventory counts by giving companies a platform that automatically displays the needed information in real time. Businesses could use this data to answer a variety of questions such as, “How many days do certain television brands sit in stock at certain facilities during the holiday season?”
Amazon Robotics (Kiva): Robots
In 2012, Amazon acquired Kiva for $775 million, phased-in its technology in its warehouses a few years later, and formed the subsidiary Amazon Robotics. Kiva robots replaced forklifts, large conveyor systems, and other human-operated machines. They’re efficient at performing monotonous tasks that previously fatigued employees, such as carrying and stacking bins around all day.
[bctt tweet=”In 2012, Amazon acquired Kiva for $775 million, phased-in its technology in its warehouses, and formed the subsidiary Amazon Robotics. Kiva robots replaced forklifts, large conveyor systems, and other human-operated machines. ” username=”Fronetics”]
Amazon made the move to continue pursuing competitive advantage in the e-commerce space along with maintaining control of the thousands of products in their fulfillment centers.
Some of Amazon’s robotics are large, 6-ton “Robo Stow” mechanical arms that move and stack bins around the factory. Others are used for carrying, transporting, and storing merchandise up to 3,000 pounds in an orderly fashion. Using these robots to stack and transfer merchandise saves aisle space in warehouses, allowing facilities to carry more inventory, meaning customers will be able to receive their goods quicker.
But what happened to the human employees? Did Kiva’s technology truly destroy thousands of jobs within Amazon’s warehouses? Is this the part when we rage against the machine due to the “robot uprising” stealing jobs?
Put your pitchforks down. No layoffs occurred, and, instead, robots and humans began working together. Despite skeptics’ views that automation is a job disrupter, SVP of Operations at Amazon Dave Clark assured, “[…] automation increases productivity and, in some cases, demand from consumers, which ultimately creates more jobs […] Warehouse workers would continue to work in technologically rich environments.”
In fact, since the Kiva acquisition, Amazon increased the number of warehouse employees by nearly 200% to an upwards of 125,000 workers due to the increased volume of orders. Signs show no stopping either with the rising demand of high-skilled programming jobs, technicians, as well as those working hand-in-hand with robots.
Existing employees took on new roles and increased their skillset. For example, some employees moved to “stow” products on shelves for the robots to move away, following computer instructions to optimize where merchandise goes.
From there, the robots line up when customer orders arrive. Human “pickers” grab the products from the robots’ shelves and place them in plastic bins. At this point, merchandise is packed in cardboard boxes for customers. Warehouse jobs become less monotonous as the products that employees place on the robots vary.
And with that said, the cost savings from this technology is astounding…
Cost Savings → Increased Efficiency
Operating costs decreased by 20% at a $22 million savings from each fulfillment center, successfully boosting operating margins. These savings are attributed to enhancing warehouse efficiency. Amazon found that cycle times decreased between 75% and 80% to just 15 minutes. As a side effect, additional space was allocated for inventory, increasing the amount of storage by 50%.
Drawbacks & Limitations of Autonomous Technology in Supply Chains
PINC: Barcodes & Drone Power Source
PINC’s optical technology requires packages to display barcode tags in plain sight for the drones to process accurately. This raises concerns for companies who do not have this ideal setup in their warehouses, potentially raising costs.
Another issue is the drone power source. AIR drones are powered with hydrogen fuel cells instead of batteries as they last longer and charge faster. PINC CEO Matt Yearling revealed that the hydrogen-powered technology can fly up to three hours, and only needs a few minutes to refuel. Companies therefore need to strategically consider when the drones are scheduled to fly and follow-up with refueling procedures when the drones’ power is depleted.
Amazon Robotics (Kiva): Robots Cost & Limitations
The robots themselves are also limited in the tasks that they can perform. For example, the “robotic arm” was designed to pick up packages of certain sizes. Amazon has been in the process of researching their flexibility to complete more advanced tasks, though for now human workers help in that regard. After all, “There are many things humans do really well that we don’t even understand yet,” says Beth Marcus, an Amazon employee who specializes in robotics.
While autonomous technology clearly has its benefits, it comes with a cost. Aside from the initial expense Amazon incurred with Kiva’s acquisition, an installation cost of $15 million per location is required, costing Amazon nearly $1.7 billion to fully deploy robots in all 115 locations. Despite this cost, Amazon nets a savings of $7 million per facility when compared with its recurring annual savings.
Conclusion
While introducing new technology into the supply chain space is sometimes deemed as “disruptive,” the ends justify the means for autonomous technology. Along with new jobs being created, modern manufacturing workers are gaining more skills by learning to operate robots. Drones and robots allow companies to effectively match their scale and flexibility with increased consumer demand.
PINC’s drones are a great way to establish an accurate representation of inventory in real time from past to present. This further strengthens a company’s promise to fulfill needs for its customers.
Amazon Robotics enables companies to maintain incredibly efficient workflows in their warehouses and fulfillment centers.
In a poll of executives by Techpro, an astonishing 64% reported that there were no plans to leverage autonomous technology in their businesses. Applying drones and robots to inventory management gives companies a competitive advantage and a head start in taking advantage of cutting-edge technology.
It just goes to show that autonomous technology further streamlines operations and supply chains by allowing companies to reach new heights.
This article was written by Spencer Black, an MBA student at the Peter T. Paul College of Business and Economics at the University of New Hampshire, specializing in Information Systems & Business Analytics. After graduating summa cum laude from UNH in Computer Science in 2015, he has been working at Pegasystems as a Software Engineer.
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by Jennifer Hart Yim | Jan 15, 2019 | Blog, Consumer Electronics, Content Marketing, Logistics, Manufacturing & Distribution, Marketing, Supply Chain
It’s time for consumers to stand up to tech giants and force them to procure raw materials, used in an ethical and sustainable manner, for smart devices.
Highlights:
- Smart devices have created a dependency on batteries.
- Blockchain is being considered to track cobalt from its source in the production of lithium ion batteries.
- The number one way to decrease reliance on batteries is to reduce overall consumption of energy from batteries.
Battery technology is hot these days, no pun intended. Consumers are demanding high performance and safety from batteries as energy storage devices. Smart device manufacturers are responding by producing batteries that are smaller, safer, and store more energy; this performance comes at a cost. Increasingly rare and advanced materials are required to produce a safer and more high-performance battery for your smart device.
Cobalt is one of the key raw materials required to support the green revolution. Too bad over half of the world’s cobalt supply comes from the war-torn Democratic Republic of the Congo, where they are known to use child and slave labor in the mining of cobalt.
No one cares, however. Device manufacturers are delivering a price point and value that the consumers are willing to pay for. Supply chain reform could briefly interrupt this harmony, and peoples’ relationships with their smart devices could be jeopardized. The sad truth is that device manufacturers have pulled the wool over our eyes for too long and we have now become dependent on these batteries.
There is a solution, however.
Consumers have to stand up to tech giants such as Apple and Samsung and force them to procure raw materials used in an ethical and sustainable manner. This is happening in the “Responsible Cobalt Initiative” where blockchain is being considered to track cobalt from its source in the production of lithium ion batteries.
The blockchain method relies on adequate and honest oversight at the very site where the cobalt is being mined from the Earth in locations such as the DRC. How will honest oversight be implemented in what is known to be one of the most war-torn and corrupt regions of the world? Why wouldn’t Congolese mine owners simply lie about labor practices? In this case, the supply chain reform also requires political and cultural reform. I can’t help but think about that time when the U.S. tried to cause political and cultural reform in Iraq…
The bigger and more disturbing picture is that society is on track for over-reliance on lithium-ion batteries as energy storage devices. The number of smart devices is skyrocketing. And if electric vehicles achieve widespread adoption someday, the amount of lithium-ion batteries and cobalt required to fuel that growth will be staggering.
This is just one reason why the energy future of our planet is so uncertain. Surely the population will continue to grow. Smart device numbers will keep rising exponentially. The planet is going to need more energy and more energy storage. Hopefully, an increasing amount of energy will come from renewable and carbon-neutral sources. In order to maximize the potential of renewable energy installations, we need vast amounts of energy storage. Putting all our eggs in the lithium-ion battery basket is a very bad idea by-in-large due to the shortcomings of the cobalt supply chain.
[bctt tweet=”In order to maximize the potential of renewable energy installations, we need vast amounts of energy storage. Putting all our eggs in the lithium-ion battery basket is a bad idea due to the shortcomings of the cobalt supply chain.” username=”Fronetics”]
It is important to note that the number one, most surefire way to decrease our reliance on batteries is to reduce overall consumption of energy from batteries. Simply put, if everyone were to spend half as much time on their cell phones, we would need half as many cell phone batteries. The phone would have to be charged half as often, and the battery would last twice as long, thus requiring half as many batteries over time. Maybe we would even start talking to each other once again.
In addition to reducing consumption, humankind must pursue radical technological advances in the field of energy storage. Power-to-gas and room-temperature-superconductors are two cutting-edge technologies that have the potential to revolutionize the way we store energy. Distributed generation, smart grids, and passive heating and cooling are some more conventional ways to reduce the energy storage burden placed on large-scale renewable generating facilities.
To make a long story short, the force of corporate greed and government corruption has overpowered the force of the consumers’ desires up until now. I am sure that the vast majority of smart device users, if asked, would be opposed to the use of child and slave labor in the mining of raw materials for their smart devices. I, for example, would be willing to pay more for a device that guarantees fair and ethical trade up and down the entire supply chain. We must never forget that we the consumers have the ultimate power. If we want Apple or Samsung to change their ways, we can easily do that. Get out and vote. Make your voice heard. Stand up to corporate greed and government corruption. Take a break from your cell phone and talk to the person next to you. I promise the world will be a better place.
This article was written by Peter Chivers, an MBA student at the Peter T. Paul College of Business and Economics at the University of New Hampshire. Pete is an engineer and MBA student with a passion for innovation and the outdoors. He spends his free time with his family hiking mountains, gardening, and building ice fishing contraptions.
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by Elizabeth Hines | Nov 13, 2017 | Blog, Consumer Electronics, Current Events, Manufacturing & Distribution, Strategy, Supply Chain
As sales and consumer desire continue to increase for drones and home assistants, the second-life market has a huge opportunity for growth.
Consumers are becoming ever-more enamored with their gadgets and toys. Drones and home assistants are becoming more ubiquitous in our homes (and flying around our skies). However, when these machines run their course — either because they break, or a newer model comes out — is there still use for them?
The market for gadgets
The marketplace for drones is an ever-growing one. Last year drone sales increased by an astounding 60%, and revenue grew to $4.5 billion. The drone market can be segmented into two categories — personal and commercial. Personal drones, which many consumers use for photography, is predicted to grow 40% this year, while commercial drones, which can be used for survey maps and delivery services, are expected to grow 60%.
While personal-use drones dominate unit sales, commercial-drone sales — which make up only about 6% of the market — are projected to represent 60% of the market’s revenue. This is due to the high cost of commercial drones, some with costs that exceed $100,000.
Home assistants are another intriguing category on the rise. These products are intended to control various devices in your home, such as thermostats, lighting, and security. These products also allow an individual to shop online using voice commands.
The frontrunner for this market has been Amazon’s Echo devices. As the primary nature of Amazon’s business is e-retail, the Echo device plays perfectly into this. By making it simple and easy to make Amazon purchases through voice command, these devices have great potential to bolster Amazon’s bottom line.
While this market is still in its early stages, Gartner Research expects tremendous growth, projecting $2.1 billion in consumer spending on personal home assistants by the year 2020.
The second-life market
So what becomes of these products as we replace them with newer models? Smart phones offer a sensible comparison when looking at the second-life market for these products. In 2016, consumers sold or traded in used cell phone devices for an average of $140 per device, generating a total of $17 billion worldwide. This selling and trading doesn’t just end after one transaction. It is predicted that at least 10% of premium ($500 and up) smartphones will have at least three users before they are retired.
We can draw a parallel about second-life potential between drones/home assistants and cell phones. Advances in technology render previous models obsolete or, at best, out of date. Consumers who can afford them will gravitate toward newer products. As with cell phones, they will generally look to recoup some of the cost for the newer product by selling or trading in the old one. These can then be sold to consumers looking for less expensive, older models. Even in the case of drones that crash, parts can be salvaged and sold to individuals that are looking to build their own drones.
The markets for these products are all still in early stages, so second-life markets are still in growth stages as well. As sales and consumer desire continue to increase for drones and home assistants, their life cycle will go on long after the first owners have moved on to newer models.
This post originally appeared on EBN Online.
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by Elizabeth Hines | Oct 10, 2017 | Blog, Consumer Electronics, Current Events, Manufacturing & Distribution, Strategy, Supply Chain
Of legal obligation, financial incentives, and convenience, what best drives consumers to practice proper e-waste recycling?
The United States is a nation of consumers, and there are few things we enjoy more than our electronic gadgets. Unfortunately, for every new device — or upgrade — introduced to the market, there’s an older model that becomes obsolete.
The world produced 41.8 million metric tons of e-waste in 2014, according to a study published by the United Nations University. So how can we combat this growing problem?
The recycling option… and sometimes law
Recycling products that we’re no longer using is always good practice. It can help protect the environment from hazards that are in our electronics and batteries. And many times, the device can be refurbished and donated to a person in need.
Sometimes just asking people to recycle isn’t enough, though. Some governments have made it illegal not to recycle. For example, the EU has gone so far as to institute the Battery Directive. Understanding that batteries commonly contain elements such as mercury, cadmium, and lead, the EU has set an objective of improving environmental performances of batteries, and setting a standard for their waste management as well.
In the United States, cities like New York City have made it illegal to simply throw out electronic devices. Instead, residents need to bring their devices to a recycling center, many of them conveniently located at other electronic retail outlets.
Incentives
If less hazardous waste in landfills, a cleaner environment, and compliance with laws and regulations aren’t enough, how about saving money as an incentive to recycle e-waste?
Many manufacturers and retailers offer discounts on purchases with the return of old devices. Best Buy, for example, has experimented with trade-in and recycling programs that offer gift cards or cash for customers who bring in old devices. As programs like this can leave the retailer struggling to break even, they often aren’t financially attractive enough to be the sole incentive drawing consumers to recycle e-waste.
But one incentive that is very effective is also, probably, the most obvious — convenience. One survey found that 43% of respondents would be more likely to recycle e-waste were cell phone and battery recycling part of curb-side pickup.
The convenience of curb-side pickup for paper, plastic, and aluminum helped to make recycling ubiquitous in neighborhoods across the country. It’s the same thought process that leads researchers to believe that the convenience of a curb-side pickup will encourage more individuals to recycle their electronic devices and batteries.
This post originally appeared on EBN Online.
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by Elizabeth Hines | Jul 10, 2017 | Blog, Consumer Electronics, Manufacturing & Distribution, Strategy, Supply Chain
With increasing consumer demands comes an increasing need for electronics manufacturers to adapt and change with the times.
Manufacturing operations strive to increase demand fulfillment and to reduce costs. But, too often these objectives seem mutually exclusive in practice. In fact, a 10-year study by Accenture of nearly 250 businesses across industries and sectors found that only 11% were meeting both goals.
So what are the 11% doing differently? Interestingly, the study found that operational flexibility was the common thread binding these companies together. What’s more, they were able to achieve flexibility, reduce costs, and increase demand by adhering to three key principles of operations.
3 pillars of operational flexibility
1) Keep it simple.
It can be difficult to keep up with the growing market demand for product customization while maintaining low overhead costs. But the answer is not fewer SKUs — in fact, quite the opposite. Successful manufacturers have increased product variants while reducing the number of components in each SKU, simplifying production.
A prime example of this is Toyota, which is transitioning from 100 different platform variants to five standard platforms across all its models. The brand will maintain design variation in accompanying components and interior choices. Toyota expects this will enhance the customer driving experience while reducing factory costs by 40% and manpower by about 20%.
2) Embrace digitization.
The supply chain is a series of steps toward getting the product in the hands of the end user. Digitization can break down barriers between steps so the supply chain becomes one integrated process. By offering faster responsiveness through digitalization, businesses can better meet consumer demand in timely manner.
Additionally, digitization can help reduce costs associated with production. An example of this is the use of 3-D printing. Traditional manufacturing processes for building a part are subtractive, creating a lot of scrap and wasted material as a byproduct. Not so with 3-D printing, an additive process using the minimum material necessary to fabricate a part. Less wasted material equals less wasted cost.
3) Develop multi-skilled labor.
Investing in a workforce that can adjust and handle multiple duties is an important aspect of operational flexibility. By cross-training employees, manufacturers are better able to optimize time and effort.
Honda’s ARC line, which trains line members across multiple tasks, offers a prime example. Not only are employees more capable of assessing and solving problems, Honda has been able to improve work efficiency by 10%.
Variables
With increasing consumer demands comes an increasing need for electronics manufacturers to adapt and change with the times. And there will always be unexpected variables and market fluctuations that require operational agility. But by being faster, more flexible, and cheaper, businesses can continue to increase demand fulfillment while effectively managing costs.
This article originally appeared on EBN Online.
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by Elizabeth Hines | Feb 21, 2017 | Blog, Consumer Electronics, Manufacturing & Distribution, Strategy, Supply Chain
Will sustainability trends from the consumer packaging industry have an impact on electronics manufacturing this year?
As we wrap up the first big consumer holiday of 2017, it’s interesting to think about how innovation in packaging never stops. While many of the newest ideas are hitting consumer applications first, perhaps they will point to new directions for electronics manufacturing as well.
Packaging trends suggest a wide range of startups, researchers, and big companies are committed to finding solutions that match the buzzwords du jour — sustainable, bio-degradable, natural, and eco-friendly.
Here are some sustainability trends in packaging that I think will gain momentum in 2017.
2017 packaging trends to watch
1) Multiple uses
Great packaging protects not only your product, but also your brand. But what if the packaging is part of the product itself?
That is the case with innovations such as the expandable bowl by Swedish design studio Tomorrow Machine. Using 100% bio-based and biodegradable materials, the company created a cellulose wrapper that hugs freeze-dried food and morphs into a bowl when hot water is poured into the spout. The bowl ― a sustainable packaging award winner ― is now in good company, and I expect more will follow.
2) Unconventional materials
Egg shells, fermented sugars, barley, and wheat ribbons — those were the materials used to create, in turn:
- Bio-compostable films: Nano-particles from waste eggshells helped researchers at Tuskegee University in Alabama make a plastic film that is completely sustainable and 700% more flexible than other bio-plastic blends. Film made of the new material could be used in retail packaging, grocery bags and food containers.
- A prototype PHBottle: The European PHBottle project aims to initially create a bottle, cap, and sleeve, although use in other applications (non-food packaging and non-packaging uses) will be tested. The bio-plastic material used to make the bottle comes from the transformation of organic matter found in juice processing by-products.
- Edible six-pack rings for beer: Imagine washing down the six-pack ring with your favorite beer. Although that moment is not quite here yet, the future is looking up for a piece of plastic that is notorious for ensnaring wildlife. The first bio-degradable edible six-pack ring for beer is the result of a partnership between Saltwater Brewery; We Believers, an advertising agency; and Entelequia, Inc., a small startup in Mexico. Made from barley and wheat ribbons spent grain from the brewing process, the rings are safe for wildlife to eat and sturdy enough to support the cans.
3) Reusable packaging
The throw-away culture is not for everyone. In fact, Mintel’s Global Packaging Trends 2017 shows 63% of U.S. consumers actively seek out packages they can re-use. More than half of consumers also say they would prefer to buy foods with minimal or even no packaging. With such great demand for waste reduction, innovation is bound to pick up even more momentum.
What do you think 2017 will bring in terms of sustainable packaging for the electronics industry? Let us know about promising innovations you’ve seen.
This post originally appeared on EBN Online.
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