The future of automation in ASEAN

The material handling industry has come a long way since the days of manual hand pallet trucks. Today’s modern material handling equipment and systems are fully automated with minimal human intervention, and some even utilise artificial intelligence (AI) to manage various tasks.

Indeed, automated material handling systems is gaining momentum across all ASEAN states. Popular automated solutions include Automated Storage and Retrieval Systems (ASRS), Automated Guided Vehicles (AGVs), order fulfilment systems (e.g. sortation and picking solutions), and the latest trending solution, Autonomous Mobile Robots (AMR).

Pallet lifter (Photo: Consoveyo)

Ensuring business growth

Across the food and beverage industry and other industries, automation and technology are the key drivers behind the significant growth of numerous well-established companies. With improved supply chain strategies, companies can expect greater customer satisfaction levels and higher customer retention rates. The following few factors have also influenced the shift towards automation:

Increase in throughput With solutions like the ASRS, companies are able to store more within smaller warehouses. For example, ASRS-equipped warehouses and fulfilment centres have the capacity to store two to three times more products within the same footprint than if conventional storage methods were in place.

Better performance The efficiency and reliability of material handling systems often determine the productivity, accuracy, and traceability of a warehouse or fulfilment centre. Manufacturers want the ability to scale up and ship increased quantities of products to customers relatively quickly. With automated material handling systems and technologies in place, warehouses and fulfilment centres will be able to do more with fewer resources, and see an increase of at least 10-40% in productivity.

Ease of operations Automated systems ensure that operations are carried out with practically zero interruptions. These automated machines are also more predictable, unlike their manual counterparts, which require human operators. Furthermore, companies do not have to worry about a lack of human resources due to scheduling issues, or about human operators not being available around the clock, all of which might result in unexpected downtime.

Safety and security Warehouses that handle special products such as cold products, chemicals, or even currency notes, present very harsh environments for employees. For example, cold store warehouses operate at low temperatures, sometimes as low as - 28^oC. Warehouses that store chemical products are typically dangerous and hazardous environments, as the products are toxic, flammable, and corrosive. Automated solutions help prevent safety hazards — such as contamination, spoilage, and combustion — and even security issues like theft as in the case of currency notes.

Automated storage and retrieval system (Photo: Consoveyo)

Benefiting from automation

The popularity of automated material handling systems can also be attributed to a host of benefits that manufacturers reap from installing such systems. These benefits include:

• Improved labour management. The moving of goods from one area to another is not a highly valued activity in most warehouses. With automated solutions in place, employees can be redeployed to higher-value roles that require more specialised skills, knowledge, or ability to handle complex tasks.

• Increase in worker satisfaction. Employees are exposed to fewer safety and health risks, and manufacturers can expect lower employee turnover rates.

• Increase in accuracy. Automation makes tasks easier to complete, and reduces the risks of order inaccuracies.

• Increase in food safety. Specific to warehouses with cold storage facilities¹, food freshness, safety, and hygiene can be very much improved due to the minimisation of temperature variations and cross contamination that is enjoyed with automation.

• Savings in energy cost. The elimination of manually operated equipment like forklifts, and the reduced need for human labour, can help to lower energy consumption.

• Savings in long-term operation costs. Automated systems require less manpower, and advanced technologies typically provide significant return on investment (ROI).

Automation in ASEAN

ASEAN is home to more than 640 million people ². Traditionally, in highly populated countries where the manual labour force is abundant and cheap, automation was thought to have robbed people from their jobs. However, with wages increasing in emerging economies, ageing workforces, and low unemployment rates, ASEAN countries have been rapidly integrating automation into

manufacturing processes. Also, a new generation of tech-savvy employees are demanding safer and better work environments, causing companies to pay even more attention to automation.

Rapid advancements in technology and increasing improvements in manufacturing techniques have also made automated material handling equipment more accessible — both in terms of availability and affordability — to the broader market. The investment costs associated with automated material handling solutions have decreased to a point where it is considered feasible and practical, making it easier for businesses to justify upgrades.

In addition, the cost of manual labour will rise with time, due to the increasing requirements for better health and safety standards in work environments. For these reasons, businesses in ASEAN states are now quickly recognising that adopting automation makes good business sense. As manufacturers continue to adopt modern technologies, the logistics industry will see a higher level of acceptance for fully automated warehouses and fulfilment centres in the coming decade, paving the way towards a bright future with automated logistics handling systems.

References

¹Consoveyo, The 5 Key Benefits of Automating Cold Store Warehouses, 9 May 2019. 

²Statista, Total population of the ASEAN countries from 2008 to 2018 (in million inhabitants), 29 May 2019.