Is fully contactless automation the future of supply chain technology?

The pandemic reaffirmed the need to automate, but fully-contactless supply chains could still be a long way off.
3 August 2020

There’s another reason to automate in a pandemic. Source: Shutterstock

  • The pandemic has re-affirmed that logistics and manufacturing sectors’ need to automate
  • In the medium-term, businesses could gain an advantage in committing to technologies that reduce human contact

The events of the last three or so months have revealed just how delicate our reliance on complex production and logistics really is and how, despite advanced technology seeping into them, how they are still very much dependent on a healthy, mobile and human workforce. 

But what the crisis confirmed is that the years-long quest automate supply chains, leveraging technology from robotics, data analytics and IoT, will make these systems more reliable, resilient and less prone to downtime and disruption in any kind of crisis. But this isn’t the first time the sustainability – or survivability – of status quo will have been brought into question among business leaders and supply chain gurus, just look at political factors such as the US-China trade war, United States-Mexico-Canada Agreement (USMCA), and Brexit in the UK

Now, organizations of all sizes which rely on production, warehousing and logistics are in urgent discussions around how they can enact damage limitation strategies moving forward and regain traction. Automation technology holds the key.

Business leaders in the manufacturing and logistics sector will have little doubt today that their investments into automation will be money well spent, and we can expect investments in Industry 4.0 technology to be expedited and the pace of innovation to ramp up further as vendors eye the forthcoming boom in interest from new stakeholders. 

But the interest in automation is manifold; not only can it optimize evermore data-driven logistics chains and reduce downtime, make supply chain systems more resilient to disruption, and save ultimately save costs in terms of human labor – making supply chains ‘contactless’ from production to delivery could become a vital ingredient to kindling business again in the wake of the pandemic. 

Ensuring businesses and customers feel safe handling goods might just become a significant medium-term business differentiator, demonstrating that those businesses are prudent and forward-thinking as we emerge from a health crisis and must continue to keep transmission down. 

While we can already see plenty of examples of technology in action in supply chains today which omit humans from the picture, such as Alibaba’s robot-powered smart factory, making the entire supply chain contactless remains a staggering challenge. 

In Japan, the need for automation is especially prevalent, particularly as its aging workforce is driving a very real need for alternatives to human labor on the production line. But the complications of the pandemic, and the pressure caused by a subsequent surge in e-commerce, has led to an increasing interest in the country’s supply chain automation companies. 

As reported by Bloomberg, Tsubakimoto Chain Co. is seeing a rise in demand for its sorting and conveyor systems which help companies move products around, unmanned, in warehouses and factories. Startup Hacobu is confident in the prospects of its online and paperless platform for trucks to exchange information as they load and unload goods at facilities. 

According to researcher Fuji Keizai, the market for next-gen logistics systems is set to hit 651 billion yen (US$6 billion) by 2025, double its worth in 2018. That’s rapid growth in any technology market.

“Demand for humanless systems will keep growing,” Masafumi Okamoto, division manager at Osaka-based Tsubakimoto, told the publication, as e-commerce and the need for contactless supply chain technology combines to drive demand.

It’s not just under the cover of factories and warehouses where this automation technology will play a leading role. The area of last-mile delivery is ripe for disruption, and has led to a competitive market in technologies like fleet management software and even the race to deploy autonomous vehicles, including automobiles and drones. 

In the US, carmaker Daimler last year announced ambitions to put autonomous trucks on the road, investing US$573 million in the technology. Faced with a drastic shortage of long-distance drivers, autonomous trucks are estimated to save 45 percent in operating costs (between US$85 billion and US$125 billion) for the US for-hire trucking industry.

A fully-contactless supply chain – where equipment is operated remotely with edge computing and deliveries are made by self-driving vans – remains a distant ideal for now. But the current spike in demand, driven in part by a need for assurance over transmission of the virus, has only added fuel to flames of innovation taking place in the arena.