Strategy

Is embracing automation key to alleviating Singapore’s manpower challenges?

According to an article published by content provider, Supply Chain 247, in the United States, 250,000 manufacturing plants and warehouses support the activities of 4 million retail stores and e-commerce websites. And even though all of these operations carry inventory, less than 10% are using automated storage and retrieval systems to help with inventory management.

The writer argues that there is an opportunity to add value in every warehouse or retail store. One way to do so is to use robotics and drones that provide payback within three to six months (versus five to 10 years for AS/RS systems).

As such, many smart companies are overlaying pieces of advanced technology in existing facilities. This way they can add more value and the end result would be positive, irrespective of what environment they operate in or what market challenges are confronted with.

Although embracing automation in supply chain organisations is not going to be easy, in polling the executives that work across various industries, logistics provider PINC found that two-thirds of logistics spending in America is allocated to transportation and the remainder to warehousing. This is likely why so many companies are focused on adopting innovations such as self-driving vehicles.

According to the same article, transportation only moves 10% of the average firm’s inventory, while 90% is sitting on the shelves or trailers at manufacturing plants, distribution centres, or out in a store.

This tells us that many companies inventory management is not at optimal levels and that they are still carrying too much inventory. They are also struggling with out-of-stocks, poor accuracy, inventory shrinkage, and other problems associated with ineffective inventory management.

Since human beings can visually scan the inventory that is in a warehouse or store, a robot can be trained to do the same thing. However, robots can do more than humans. They are able to operate 24/7, about three hundred times faster than humans, and robots provide accuracy levels way higher than human beings.

Relating the issue back to Singapore’s manpower challenge and labor shortages, automation can help to play a big part in the supply chain industry. According to an article by The Straits times, Singapore’s labour supply is expected to shrink by 1.7 percentage points in the 10 years through 2026 and by 2.5 percentage points in the decade after that. What Singapore could do is to move into automation and leverage on its advantages to help with this challenge they are facing.

One such facility that has heavily adopted automative technologies is the recently opened Toll City, operated by Japan post owned Toll Holdings. The S$228 million, next-generation logistics hub is home to new technologies such as driverless vehicles, smart-city telematics to track and optimise road fleet in real-time,3D-printing, and Smart RFID cabinets for real-time inventory accuracy and accountability.

Within Toll City is a Healthcare Logistics Hub with state-of-the art systems supplied by global intralogistics provider SSI Schaefer. The next generation warehouse is equipped with smart warehousing and advanced control tower system such as the SSI ORBITER® Shuttle System, Very Narrow Aisle, High Bay Shelving, LOGIMAT® Vertical Lift Module and Automated Guided Vehicles.

With these systems, the Healthcare Logistics Hub is able to achieve space efficiency of 40% and a combined manpower efficiency of 30%.

These warehouses of the future help address Singapore’s urban logistics challenges and offer an integrated solution that is prepared for surge periods, and potential disruptions to the supply chain management process.

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