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The Rise of the Warehouse Machine – Exotec and the Future of Warehouse Robotics

A bunch of robots working in a warehouse

In 2014, the global warehouse robotics industry generated over $2.7 billion in revenues. Likewise, over the next five years, the expected annual growth is projected to be 8.4 percent. As the demand for greater warehouse automation and efficiency grows, so does the interest in warehouse robotics. Therefore, it’s not surprising that a number of new startups are making headlines with new innovations in this sector. And one of the most intriguing companies to enter this burgeoning field is Exotec, a French startup based on Lille.

Of course, Exotec is not the only company in this sector. However, it has received attention lately because of its capacity to allow warehouses to scale to their expanding needs. Understanding that technology in this area is rapidly changing, adaptability is key. Warehouse automation systems that facilitate this need are among the ones likely to excel. And combined with major shifts in social behaviors, the potential for business success is tremendous.

“In logistics warehouses, they are supplementing their workforce with robots that sort and transport items to different areas of the warehouse. This helps alleviate worker density and follow social distancing guidelines. This not only helps with worker’s well-being but ultimately improves capacity to support the increased volume.” – Jeff Linnell, CEO of Formant

A Push for Warehouse Automation

The appeal of warehouse automation is not something that just appeared. For well over a decade, warehouses have sought to enhance their logistics and operational capacities. For example, Amazon has been utilizing its Kiva robotics system for roughly a decade. But since then, several other drivers are advancing the level of interest in warehouse robotics. There is a notable shortage of skilled labor, which makes warehouse robotics attractive. Likewise, new technological developments like AI, machine learning, and the Internet-of-Things (IoT) have similarly advanced the field.

A bunch of robots handling packages in a warehouse
The prevailing theory of warehouse automation is that robots will always be better at Tetris than humans. Always.

Certainly, these developments are ample to increase the demand for warehouse automation. However, consumer shifts have been more powerful as of late. Consumer use of e-commerce has fueled tremendous demand for delivery systems. Also, consumer expectations of rapid delivery times from the time of order push warehouse systems to be highly efficient. And with COVID, these already present trends accelerated to an even greater degree. In essence, this has ushered in the “Come-to-Me Economy”.  All of these drivers have created a perfect tsunami making warehouse robotics and automation extremely attractive.

“There is a global need for robotics solutions in warehouses, but logisticians are often concerned about investing in traditional fixed automation in this fast-changing world. We offer a new generation of warehouse robotics.” – Romain Moulin, Co-founder and CEO, Exotec

A Demand for Scalable and Safe Warehouse Robotics

While these drivers should encourage warehouses to invest heavily in robotics systems, there has been hesitation. A major drawback has been investing substantial funds into a robotic system that only meets present needs. Many such systems are poorly adaptable. Even Amazon, which has been an innovator in supply chain automation, struggles with scalability at times. It now employs over 100,000 robots. But when additional infrastructure and robots are required, this can take months to realize. This has been even more challenging for other warehouses and businesses.

That is where Exotec offers a notable advantage in warehouse robotics. Exotec’s small robots, called Skypods, operate in 3-dimentions while using laser scanner navigation. Their navigation is guided by logistics software that optimizes route efficiency. Skypods then travel up to 4 meters/second along tall racks of standardized bins where they collect orders. The bins are then taken to a packaging station where employees complete the order. And if expansion is needed, all is required is a quick addition of more racks, bins and robots.

Naturally, the major advantages of Exotec’s warehouse robotics is its efficiency and scalability. But it also offers other benefits. The Skypods operate in their own portion of the warehouse where employees do not work. This markedly improves worker safety in the process. Given that other warehouses like Amazon continue to struggle with robotics safety issue, this is a huge plus. This explains why Exotec has recently expanded operations throughout North America and Asia. It also explains why they recently received another $90 million in Series C funding.

“Brands and retailers are seeing tremendous surge in e-commerce, accelerated by the current pandemic. They must now transform their supply chain to gain competitive advantage.” – Rudi Lueg, Managing Director of North America, Exotec

The Warehouse of Tomorrow

Recent shifts in consumer behaviors are expected to continue toward e-commerce. This will continue to drive a need for greater warehouse automation to improve efficiencies in both operations and logistics. Warehouse robotics are well positioned to serve this need. However, one of the concerns continues to be human labor displacement in the process. With more robots performing various tasks, some suspect that the need for human labor will diminish. However, it appears this view is a bit shortsighted.

Most experts in warehouse automation actually anticipate the demand for human labor will increase not decrease. The specific skills required are likely to change in terms of these positions. However, the incredible growth in volume of warehouse operations supports the perspective that jobs will increase. This has been the case for Amazon, which had to hire large numbers of individuals when the pandemic struck. The large increase in fulfillment requests necessitated more human labor, not less. Therefore, it’s likely the warehouse of tomorrow may be much larger in size or number. But they probably won’t have fewer employees.

At the present time, most of the growing demand for warehouse robotics appears to be in North America and Asia. These regions have the geographic capacity for developing warehouse networks for global distribution networks. But in the future, these networks will likely expand into other continents. Developing a template of warehouse automation will make this expansion more practical. And scalable warehouse robotics that are easily integrated into distribution workflows will facilitate these efforts further. Exotec just happens to be one of the companies leading the way toward this rather intriguing future.


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