Robotic warehouse risks for business

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Chris Sheedy By Chris Sheedy, CA Today

27 May 2019

As Australian supermarket Coles gets set to introduce robotic warehouses, what risks need to be mitigated for a tech success story?

In late 2018, a media story about an event in a warehouse managed to capture the concern that people have about working alongside robots.

Just before 9am in an Amazon warehouse in New Jersey, USA, an aerosol can of ‘bear spray’ (intended for use in the wilderness when a bushwalker inadvertently comes face to face with a bear) was punctured by one of the warehouse’s robots.

Up to 54 staff in the warehouse were exposed to the gas. They experienced a burning sensation in their eyes and throats, and some had difficulty breathing. A total of 24 staff were hospitalised.

Not only are robots taking our jobs, they’re also trying to kill us, readers likely thought.

More recently Australian supermarket giant Coles – locked in a battle against Woolworths and Aldi for reputation as well as profit – announced what has been described as a ‘billion-dollar gamble’.

Their ‘gamble’ is centred around warehouses manned mainly by robots. On March 26 this year, Coles announced an agreement with British online supermarket Ocado to bring its futuristic warehouse robots to Australia and set up, by 2023, automated fulfilment centres in Sydney and Melbourne.

As sales-related profit becomes more difficult to boost, Coles is now turning the focus back onto itself to cut costs. Worth $130 to $150 million, the deal will double Coles’ home delivery capacity.

But what new risks and rewards does this strategy introduce?

The rewards of automation

A focus on warehousing efficiency and other logistical matters is a wise move for a supermarket chain looking to increase market share in a competitive environment.

Ocado appears to have done stellar job of automating its warehouses so that they are populated almost entirely by robots. One Ocado warehouse in Andover, south-west of London, is run by over 1000 robots that can process 65,000 orders (a total of 3.5 million items) each week. It accounts for 10% of Ocado’s delivery capacity across the UK.

It is typical of robotic warehouse to include humans to do some picking and packing – apparently, robots have a terrible time attempting to pick up bags of fruit or vegetables, such as oranges or potatoes.

And, of course, humans are also required to carry out technical and IT-related work, including robot repairs. But the humans are peripheral. The ‘heart’ of the operation is the realm of the robot.

Keeping up with technology risks

Over a month before Coles’ announcement, the Andover warehouse suffered a catastrophic fire that last almost four days and severely impacted deliveries as well as their supply chain. The company lost £1bn in market value before shares rallied again.

It was bad news for a company that is scaling and selling their impressive technology to multiple companies across the globe.

Mark Wrack, General Secretary of the Fire Brigades Union in the UK commented: “Fire safety planning... has not kept up to date with emerging landscapes, such as robotic warehouses… there has been virtually no mechanism for researching and preparing for emerging risks, such as those posed by technology.”

Risks for human workers

Amazon is undoubtedly the current king of robot warehousing, but the technology has not always played well with its human counterparts. In fact, the organisation has had to answer to numerous calls to improve its workplace health and safety practices.

Prior to last year’s bear spray event there was, believe it or not, another bear spray accident. That time, in 2015 and in a Texas warehouse, a wheeled robot ran over a can of the noxious gas, resulting in the local fire department being called out.

The National Council for Occupational Safety and Health in the US produced a ‘Dirty Dozen’ report for 2018, a list of the employers who put workers and communities at the greatest risk.

“The Institute for Local Self Reliance estimates that as of 2015, Amazon’s operations have caused a net lossof some 149,000 US jobs, by squeezing out small businesses and other competitors,” the report said.

“Work in an Amazon warehouse, says the Institute, ‘resembles labour’s distant past more than a promising future, with many workers performing gruelling and under-paid jobs, getting trapped in precarious temporary positions, or doing on-demand assignments that are paid by the piece’.”

“In January 2018, Amazon received a patent that will allow even more intrusive monitoring of its workforce.

“The new ultrasonic wristbands – not yet in use – can record each worker’s hand movements and ‘buzz’ a worker’s wrist if he or she makes a movement in the wrong direction. ‘Amazon’s new idea,’ says the tech blog Gizmodo, ‘goes to extremes to treat employees like fleshy robots.’”

Embracing technology and mitigating risks

Forward-thinking global insurer Zurich released an article that outlined methods to mitigate robot-related risk. They included:

  • Upskilling staff, whose roles will likely change once robotics are introduced.
  • Where possible, using cages and guards to prevent interaction between robots and humans.
  • Anticipating not only how robots will behave, but also how humans might react to the robots in different scenarios.
  • Developing new health and safety rules for human/robot interaction.
  • Limiting speed at which robots can operate in areas that they can come into contact with humans.

“As we move towards greater and greater automation, we are going to see increasing use of robots in all sorts of workplaces,” said Jim Wilkes, Commercial Propositions, Zurich. “That is going to change the dynamics of risk and so it’s a trend that companies should certainly be aware of.”

About the author

Chris Sheedy is one of Australia’s busiest and most successful freelance writers. He has been published regularly in the Sydney Morning HeraldVirgin Australia VoyeurThe Australian MagazineGQIn The BlackCadillac, Management Today, Men’s Fitness and countless other big-brand publications. He is frequently commissioned to carry out copywriting and corporate writing projects for organisations, including banks, universities, television networks, restaurant chains and major charities, through his business The Hard Word.


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