Some will call it inevitable tech-driven evolution, others will point to the pandemic as an expediting factor, but the fact remains that automation has almost become – whether it be in small elements or high emersion – mainstream in business.
As the concept of Internet of Things continues to expand across all areas of everyday life and technology enables customers to demand more, better, faster, the business world has had little choice: adapt or… well, lose.
And now, a year into the new world that has formed due to the pandemic, we further see how automated processes and technology have allowed businesses to not only continue their manufacturing and workflow during difficult periods, but in many cases accelerate it.
Take beverage company Lion Australia, for example. Eyeing a voluminous amount of product to be produced – daily – through a supply chain and manufacturing set-up at the Tooheys Brewery in NSW, Lion was looking for a way to streamline their operation. They decided to implement Automated Guided Vehicles (AGVs) in the brewery, a strategy drawn up with Dematic, one of the world’s leading automated system solutions companies.
The AGVs helped optimise Lion’s manufacturing supply chain to support the production of 2 million litres of beer, 120,000 cartons of product per day, and 300 million litres of beer per year. The AGVs work 24/7, allow for consistent product picking times, eliminate wastage, plus lower inaccuracies that can come by human error.
That is but one example of industrial streamlining capabilities that can come with automation. Businesses and customers around the world have long seen its growing prevalence. It’s now here… and it’s undeniable.
Dynamic Business sat down with Michael Jerogin, Chief Executive Officer at Dematic Asia Pacific, to discuss the growth of automation, the areas of high adoption, and, in general, where it stands now.
From what Michael has seen, the increased adoption rate was already in play. The unfolding world events, however, did fast-track the move towards automation even further.
“For a lot of our business, those decisions and the projects we were working on last year were made, perhaps, the year before – before COVID was even on the radar.
“It came as a real shock, I think, the speed and the reaction to the pandemic outbreak in January, February 2020. But it certainly impacted the markets and, in particular, retail consumer behaviour. It accelerated underlying trends already in play within the adoption of automation and the supply chain industry. It drove them a lot quicker than perhaps would have otherwise occurred.”
As for what business areas have seen a climb in automation, Michael points to the 3PL and e-commerce spaces – particularly related to grocery, food and beverage sectors – and the healthcare space. Ultimately, it’s the world of online retail that Michael says is seeing an obvious gravitation to automation, fueled by not only the convenience sought out by customers as pandemic-caused limitations continue, but by urbanisation, the growth of populations in city centres, and the adoption of mobile technology.
“Look, I think if you look at it, in some respects, automation is an enabler for people to execute their business model. And the sheer demand that comes through an online presence and the fact that most people who click now are expecting a response same day,” Michael says.
“The expectation of immediate response can’t be dealt with in traditional ways. You can’t just throw more bodies into a warehouse and get more product out. It becomes completely unworkable. Automation really is an enabler – whether it’s the physical automation or whether it’s the software systems and the control systems that lie over that automation.”
Automation in Australia
Australia, as with many countries across the world, is experiencing a slow-but-steady economic recovery. Employment numbers are showing promise, with February’s season figures showing total employment at just 1,800 below pre-pandemic levels, and we also saw a retail trade year-on-year rise of 8.7 per cent from Feb 2020.
Naturally, Australian businesses are now looking to both capitalise on opening doors, such as relaxed domestic borders and international trade paths, and streamlined workflows.
Furthermore, business eyes are – and should be – on where customers are congregating. It’s quite clear that, despite Australia’s seemingly trepid approach to online retail over the years, this sector is exploding – and fast. There was a 41 per cent year-on-year rise on online purchases in 2020 alone.
“The growth in that online business is just going to continue,” Michael says. “I think Australia – and I might be generalising a bit – we are a reasonably traditional people. We enjoy our brick-and-mortar retail therapy, but for us, [a jump in e-commerce] was coming. We’ve all got a taste for it now.”
Dematic, Michael tells Dynamic Business, is perfectly poised to help Aus businesses manoeuvre during this evolving climate. Dematic holds a strong local presence and has seen sturdy growth, even during the pandemic, landing major contracts with giants such as the Woolworths Group and aforementioned Lion Australia.
“We have a number of locations around Australia and New Zealand. Plus, we have undeniable global experience, with the likes of major players such as Amazon, Walmart out of the US, and PepsiCo. These organizations are scaling up at an incredible pace, and so we can bring some of that knowledge, standard subsystems, standard tools and processes, to our customers in Australia and help them to meet their solution requirements in a more risk-controlled way than perhaps if they were out trying to do it themselves or pull it together through different consultancies.”
Michael says Australian businesses need end-to-end support when moving onto automation – to not only adapt to and function with new processes, but to also see the opportunities automation provides.
“As an example, in the fresh food market, by installing automation for our key customers, we’ve been able to reduce the time that they can get their product from, let’s say, the killing floor, to packaged, to ready for delivery, to the end customer,” Michael explains.
“And reducing the time that that takes, which is in some cases two or three days, means they can reach a market now with another two days shelf life of fresh produce. This might add six or 700 million people they can reach in an export market. It shows that, in this example, we can help food processors and other operators in Australia to extend their reach by improving internal processes.”
Automation is still a cause for uncertainty and high precaution for many, which is understandable and common with mass shifts in the technological and business landscape. And yet, it is here, it is evolving, and it is helping business thrive across the world.
“As we push the boundaries of science and we have access to smaller, faster, cheaper technologies, it’s only natural that it’s going to be adopted and used if it can drive a competitive advantage for a particular business,” Michael says.
“But technology also makes life better for society, in general. Better health, better quality food, whatever it is that sets our standards of living. Technology’s playing a role in that… and we’re part of that development process.”