While automotive manufacturing paused during the novel coronavirus crisis, affecting demand for industrial automation, e-commerce order fulfillment experienced a spike in demand. Robotics developers and suppliers should prepare for a long-term increase according to several industry observers.
“Some of the forecasts for digital grocery demand for 2024 to 2025 — we’re seeing those numbers now,” said Scott Gravelle, CEO of Attabotics Inc., which supplies robotics for goods-to-person storage, retrieval, and real-time order fulfillment. “Some brick-and-mortar retailers are still hurting, but the future is getting here faster when it comes to e-commerce.”
“Everybody is trying to figure out the future,” he told The Robot Report. “The COVID-19 pandemic shows traditional supply chains can’t support modern consumer behavior, and it accelerated the transition.”
Robots as a tool for employee retention
Despite some studies claiming that robots will displace jobs, the reality is more complex, said Gravelle. “Before the pandemic, the biggest constraint was the tight labor market, with Amazon having to hire 100,000 people seasonally,” he said. “Now, there are strains because of the demand on essential businesses and the need for social distancing. That’s where automation can help.”
“Attabotics created a COVID-19 handbook, originally just for ourselves, to keep people as safe as possible in the office, in the factory, or in the field,” Gravelle said. “When we started talking to customers, we recognized that it could help them and started sharing it.”
The Calgary, Alberta-based company moved as many of its 230 employees as possible to work from home, but its product development and manufacturing teams accessing their equipment with a lower density of people, he said. In addition, business-development work continued, with multiple contracts coming in, Gravelle said.
“While our restaurant supply business got dramatically slower, essential services such as digital grocery and supplying food to hospitals were exceptions to shelter-in-place orders in Canada and the U.S.,” he said. Attabotics this week announced a partnership with Food-X Technologies for online grocery fulfillment.
Attabotics raised $25 million in Series B funding in July 2019. How has the pandemic affected the startup’s finances?
“The stock markets had knee-jerk reactions, but we’re in a reasonable capital situation right now,” responded Gravelle. “E-commerce companies that are looking ahead are investing in robotics, and the Canadian government has helped keep everyone working.”
Robustness and transparency for e-commerce
“We’ve seen that offshoring a lot of production to single-source locations or companies demonstrates the fragility of centralized supply chains,” said Gravelle. “We hope this understanding leads to more robust supply chains for food, critical medical equipment, and manufacturing.”
“Robotics and automation can provide greater transparency, connecting supplier data with needs in a timely way,” he added. “That would enable networks to be more useful for both retailers and consumers.”
Attabotics worked with Microsoft Corp. on developing Azure IoT Edge, which combines private networks with edge compute services to provide “timely, transparent, and trusted data,” Gravelle said. “We have group of robots on LTE networks now, and they’ll soon be on 5G.”
“With more bandwidth and edge GPUs, you can use machine learning micro-services to analyze data and look for outliers with individual robots, like, ‘Why is one motor warmer than another, and why?’ This enables predictive analytics,” he said. “For IoT [the Internet of Things], you need a shared ecosystem with trusted transactional data.”
Micro-fulfillment and big data
Attabotics and other companies have expressed interest in micro-fulfillment, in which distribution moves from large warehouses at the edge of urban areas closer to consumers.
“We know micro-fulfillment is the future of e-commerce, but we don’t want to do induction there,” Gravelle said. “A micro-fulfillment network can serve many retailers. The key is to understand where to put inventory to meet expectations quickly. What goods you push will depend on applying artificial intelligence to data lakes to analyze market trends.”
“How many Size 9 black adidas Gazelle shoes need to be in Boston in 10 days? That’s a perfect question for quantum computing,” he said. “We’ve had conversations with Microsoft and Honeywell about how to evaluate these technologies so it’s not just-in-time inventory but really using data for digitally enabled supply chains.”
“Attabotics isn’t the inventor of these technologies, but the goal is to use our automation and data tools to meet or exceed customer expectations without flooding the supply chain with inventory, which historically was just a buffer,” explained Gravelle. “Now, too much inventory ends up being put on sale, and retailers can lose out to e-commerce competitors.”
“There’s a massive transformation coming, and innovation is not just coming from historic places,” he said. “It’s not just about e-commerce flexibility but also resilience. The pandemic has created a real awareness of how offshoring, centralized supply chains, and a lack of transparency can hurt business.”
“We’re encouraged that people are starting to take a different look at e-commerce and where people and governments fit into responsible supply chains,” Gravelle said. “We’re getting a lot of inbound inquiries as people look for a better future and not just efficiencies.”