By Robbie Whelan
WILMINGTON, Mass. -- When Target Corp. decided to revamp one of
its biggest California distribution centers, it had a choice. It
could build a new warehouse, it could install established
technologies for picking products off shelves or it could take a
risk on a new breed of robots from a reclusive billionaire.
Target went with the billionaire's bots.
Target's new automatons are from Symbotic LLC, part of a grocery
empire run by New England billionaire Rick Cohen. Mr. Cohen,
through his own national distribution network, and deals with some
of the nation's biggest retailers, aims to show that robots can
overturn the business of storing, handling and hauling the cases of
goods that retailers truck to their stores by the millions each
year.
His sales pitch to grocery chains and retailers, including
Target, Coca-Cola Co. and Wal-Mart Stores Inc. is simple:
Symbotic's automation system includes autonomous robots that can
travel untethered among storage racks in a distribution center.
They can move up and down aisles to stack and retrieve cases. They
coordinate with more-conventional robots that perform simpler
tasks.
That is in contrast to many other warehouse-automation systems,
in which the robots tend to be bolted down or limited to fixed
routes or tracks and are less flexible in what they can do.
"What we're doing with autonomous bots is not that dissimilar
from what Google is doing with autonomous cars," Mr. Cohen said in
an interview at Symbotic's Wilmington headquarters. "I think within
five years, it'll change distribution."
For retailers, the objective in automating warehouses is
controlling the three big costs of conventional human-staffed
distribution centers -- labor, time and real estate -- to meet the
demand of the high-cost, low-margin industry.
"Every project we look at, we look at automation as a potential
part of it," said Frank Bruni, Kroger Co.'s vice president of
supply-chain operations. The grocer has bought warehouse-automation
systems from Germany's Witron Logistik + Informatik GmbH, a
Symbotic competitor.
About 6% of Kroger's distribution centers are fully automated,
Mr. Bruni said, and a warehouse-worker shortage, rising wages and
other factors are driving the company to look at more robotic
systems. "Twenty-five, 30 years ago, there were a lot of folks who
made careers working in warehouses. Today I don't think that
dynamic exists as much."
Target in 2013 wanted to expand its Woodland, Calif.,
distribution center to keep up with rising Southwest sales. It
considered building a new center, then went with Symbotic in
2014.
"Target was going to have to build a new facility in California,
which is horrendously expensive," said Larry Sweet, a Georgia Tech
robotics professor who was Symbotic's chief technology officer
until last year and worked on the Target project. "They wanted that
facility to handle more volume, but they couldn't do it. Symbotic
was able to put a system in the building that helped that."
Until now, consumer-products retailers have found it hard to
automate even simple procedures such as picking products off a rack
and assembling odd-shaped containers on a pallet. Such tasks were
performed by about 867,300 people in warehouses across the U.S. as
of August, according to the most recent Labor Department data.
Food, in particular, has resisted robots. In the
food-and-beverage sector, where Mr. Cohen got his start, just 8% of
distribution centers owned by the 75 largest North American grocers
are partially or fully automated, according to supply-chain
consultancy MWPVL International Inc. Food wholesalers and
distributors operate on thin profit margins -- typically 1% to 2%
-- making them reluctant to invest in automation, which can cost up
to $100 million for a warehouse.
That attitude is shifting as rising labor and land costs
threaten profits. And they face increased competition from
Amazon.com Inc. and other technology firms that are overturning
longstanding practices.
Labor impact
The International Brotherhood of Teamsters, representing 122,000
grocery-warehouse workers, has been put on the defensive by the
rise of automation, said Steve Vairma, head of the union's
warehouse division. "Employers are looking to move more and more
into automation," he said, "and I think we're going to be faced
with those challenges in contract negotiations in coming
years."
Mr. Cohen's Symbotic approach is ambitious because use of
autonomous industrial robots is still in its infancy. Developing
robots that can work untethered has been something of a crusade for
engineers at manufacturers such as Boeing Co., which are spending
heavily on them. A robot that knows its way around a factory, the
argument goes, can do assembly tasks more efficiently than its
fixed-in-place ancestors.
It is still difficult for robots to perform precise tasks in
chaotic environments, said Martial Hebert, a Carnegie Mellon
University professor who specializes in vision and recognition
systems for autonomous robots. Advanced sensors and software are
bringing down some of those barriers, he said.
"The areas in which automation moves the fastest are the areas
where the environment is the most structured, things like factories
or warehouses with limited amounts of products," Mr. Hebert said.
"We're getting to the point where the technology is really moving
to the real world."
Mr. Cohen is carrying out his experiment through C&S
Wholesale Grocers Inc., the country's largest wholesale grocery
distributor by sales, of which he is the third-generation chief
executive.
His strategy has two prongs: Install robots in C&S
warehouses to serve grocery chains, and sell them to companies that
have their own distribution facilities. Over the net year, Symbotic
plans to roll out nearly a dozen fully-automated food warehouses
across the country from Pennsylvania to California, serving grocery
chains.
He has reached an agreement to supply robots to Target and
Coke's distribution facility in South Brunswick, N.J.
Wal-Mart said it is testing Symbotic's system for use in up to
two of its large distribution centers. Wal-Mart is interested in
how the robots allow it to store more products in its
warehouses.
Symbotic said its system allows food retailers and wholesalers
to cut distribution-center labor costs by 80% and operate
warehouses that are 25% to 40% smaller.
The company faces competition in the U.S. market from companies
such as Atlanta-based Dematic Corp. and Austria's Knapp AG, which
have installed systems that use robots to store and retrieve cases
of food and consumer products. A number of smaller companies are
working on ways of using autonomous robots to pick and pack
individual items to fulfill online-shopping orders directly to
customers.
For evidence robots work in food warehouses, U.S. distributors
can look to Europe, where land and labor costs are higher and
automation in food distribution is more common.
"In the long run, if you don't automate, eventually...it will
really limit your supply chain," said Norman Leonhardt, head of
sales for Witron, the German automation firm. "America is moving
towards it. There aren't enough young people coming into the
workforce who really want to work in warehouses."
Witron has installed automation in more than a dozen
distribution centers in North America run by companies such as
Kroger, Target and Meijer Inc. Witron says its systems don't use
autonomous robots.
Symbotic demonstrates its robots' potential in a C&S grocery
warehouse in Newburgh, N.Y., where they are juxtaposed with
humans.
On one side, a team of about 20 human "selectors" lined up
around 9 p.m. to stretch. A manager gave a motivational speech
about safety and efficiency as they prepared for an overnight shift
using forklifts to retrieve cases of paper towels and canned
vegetables, loading them by hand onto pallets. Warehouse pickers
can walk up to 20 miles and lift 50,000 pounds during a shift,
according to occupational-health studies.
Bots in 'The Box'
On the other side of the warehouse, more than 100 Symbotic
robots, resembling driverless go-carts, whizzed freely among racks
before driving onto ledges along narrow aisles in a multi-leveled
metal enclosure company engineers call "The Box." They can travel
at 25 miles an hour in the dark and use mechanical extender arms to
stow and retrieve cases. The bots communicate using sensors and a
wireless network.
They are limited at this point to ferrying objects of regular
sizes and solid surfaces, such as cardboard boxes. The occasional
spill or cracked container can throw the robots off until fixed by
a human.
The autonomous bots delivered products to less-mobile cousins in
the warehouse. A fixed-in-place robot separated individual cases of
canned tomatoes and macaroni-and-cheese from pallets by loading
them on conveyors, from which a lift transported them into the Box,
where other robots waited to grab them and store them in racks.
At the other end of the Box, robots ferried the cases to another
area, where two fixed robots arranged them into pallets up to 9
feet high, then shrink-wrapped them to be trucked to
supermarkets.
Unlike in conventional warehouses, where cases of a given
product tend to be stored in the same section so humans can find
them, Symbotic's robots can put any product in any spot on the
racks -- mayonnaise rubs elbows with peanut butter and coffee --
allowing for denser storage. The robots' software notes where each
product is stored, and the bots can then find them to construct
"perfect pallets" organized in sequence according to individual
supermarkets' floor plans.
Each of Symbotic's autonomous robots can drop off and retrieve
one case of products a minute, about five times as fast as a human
can on foot. The robots are 28 inches wide and the aisles they
travel only slightly wider, compared with the 10-to-12-foot aisles
of a conventional warehouse.
Mr. Cohen said he became interested in robotics because of a
lifelong passion for cutting fat at his family business. His
grandfather, Israel Cohen, founded C&S in Worcester, Mass., in
1918. Mr. Cohen became CEO in 1989 and is sole owner.
Over the years, he said, he has experimented with warehouse
robots in C&S facilities, building on an earlier hobby of
making computers from kits. He said his allergy to waste led him to
invest in Symbotic in 2007 and later buy the rest of it.
"Taking waste out is fascinating to me," Mr. Cohen said. "I walk
through a warehouse, and everyone sees what's happening, and I see
what's not happening."
One limiter on Symbotic's growth is cost. Its systems can run
between $40 million and $80 million for equipment, according to
MWPVL, the consultant, an investment big enough to make some
distributors blanch.
Still, labor costs are "going to hit the grocery industry really
hard," MWPVL founder Marc Wulfraat said. "Most young people would
rather work at a desk than hoofing cases around."
Write to Robbie Whelan at robbie.whelan@wsj.com
(END) Dow Jones Newswires
September 20, 2016 11:05 ET (15:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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