Automation Will Not Fix a Broken Process

Is putting some data around it, it's not getting distracted by kind of all the shiny options out there, which is very easy to do. And then it's saying, what is the problem that we're actually trying to solve with this automation? So are we trying to reduce headcam? Are we trying to increase service level?

Are we trying to increase capacity so that we can acquire additional business? Hello and welcome to Speaking of Supply Chain, where meboch experts from around the world unpack the real stories, strategies, insights and innovations shaping the future of supply chain. I'm your host, Ellen Wood. Automation is one of the biggest topics in warehousing right now.

Everywhere you look there's talk of robotics AI fully automated sites, especially across the UK. It feels like we're on the edge of a major transformation. But here's the question we want to explore today. How much of it is real and how much is hype?

Because while the technology is moving fast, the reality of the ground can look very different. The investments are huge, the expectations are even bigger, and the outcomes are not always what people expect. So today We're going to cut through some of that noise and we're talking about where automation is genuinely delivering value, where it's falling short, and what businesses should be really thinking about before they take the leap. Joining me today is Sophie James from our UK office.

Welcome, Sophie, hi Ellen. It's great to have you back on the podcast. Thanks for having me. It has been a while.

It has been a while. I was checking it was episode number three, so it's it's been a while, far too long since you've been across the microphone. That's a hint to both of us, isn't it really so? From your perspective, what's actually happening with automation in UK warehousing right now?

I think a lot of this perception is that everybody is automated, and everybody's going full hal gone automation right and you know, you don't even need lights on in the site because it's so automated it's dust or But I don't think the reality is really quite as dramatic as that. I think a lot more people are looking at automation automation as a real short term venture, but it's not kind of necessarily big bang, it's more okay, what things could we automate within the site and small introductions of automation, tasters of it in terms of maybe packing or goods to person's solutions, rather than kind of let's automate everything and kind of a full change.

I don't think people are quite doing it as big as maybe the assumption maybe is. I agree. I think that the media tends to really dramatize the use of automation, and I think a lot of that's that's driven by the vendors that are out there trying to put out content. But it seems like there's so much more hype about it and that it's bigger than it actually is.

So why do you think that it's accelerating now? Yes, it's a good question. I mean, I think previously people have had automation on their kind of future plan, and at some point we will automate if we know we find the right topic. But there's some real problems and real constraints that are happening in the world.

You know, labor being availability and cost being one of them, but also the pressure from customers to accept perfection essentially and the threshold for how long it takes me to get something is a lot lower now than it used to be. So these kind of ah, we'll look at automation in the future at some point is actually now becoming let's look at it now. And it's also more affordable. I think not in every case, because we're still talking about some big ticket items, but I think there's ways now that there's different financing options and for automation, which makes it a little bit more accessible for people.

So I think there's probably an element to that now about why that's kind of accelerating the the want to look at it. So when you speak to clients, what results are they looking to actually deliver? You talked for a moment about, you know, customer service and the demand for you know, I want my I want my products, and I want it now and perfection is the baseline. And I think that there's there's a degree of truth to that that, you know, we do have customer service standards that that companies have to meet, But is that what their expectation is perfection?

Yeah? I think yeah, it's a bold expectation to have, really, isn't it. I think that the expectation is that there will be a return on their investment. Ultimately, I think the main point is to understand what that return on investment really looks like.

So typically the expectation would be that it's I get some financial payback within a certain window, but actually there's other benefits to automation that's not solely financial. So that is that kind of service level offering, and there should be the expectation that that will enable growth, for example, into businesses or enable increased services to their customers as well as potentially there will be a labor saving as well as a business resilience piece, So that kind of aspect of regardless of what labor force we've got, we can do what we need to do for our customers.

And I know that when we talk about labor savings it's always a touchy subject because you know, people need to be employed. But if if people are not looking for these jobs and these are tasks that can be automated, there's always that fear around job loss that when a company is going to put automation or automated material handling into a facility, that it's going to take away jobs. Is that what we're actually still seeing is that fear realistic. It would be naive to not expect automation to replace tasks that are manually done, because we would be assessing a manual solution versus an automated solution.

Automated solutions still need some minding and care and maintenance by people. So it's not necessarily that workforce is being eliminated, but the nature of the work that is being done is changing in reaction to what the automation is or what has been implemented. And there are more technical skills that are required to manage automation than potentially some manual tasks, which are typically the ones being automated. I can see that, and and I imagine when it comes to you know, when these companies are looking at these decisions that they have to make, you know, are is there going to be a reduction in force or is it simply repurposing that employee into a role that is necessary that does require a human brain that cannot be automated because there are so many there are so many tasks and processes and things within within a business, within a facility that that do require a human I mean, even a dark store is going to have humans in it at some point doing something.

It's not we're not living in the matrix exactly. Yeah, yeah, we're in the future, but not that far. Where do these go wrong? Then?

If it's if it's not you know, the labor issue that you know they're they're clearly able to find some return on their investment by by repurposing the workforce that they have, and they're going to be able to maybe achieve greater service levels or enable growth within their company. Where do the projects go wrong? Because that all sounds like it's win win win exactly. But I mean, we've all heard the phrase two get to be true, right.

I think the mistake that people can make is that if you put bad information in, you'll get bad information out. So if you are just putting automation in without thinking about the process itself as a bare bones process, there's likely to be some mistakes made. So the kind of thing that we see is we don't want to automate a bad process because then we're still automating waste. What we really want to do, and the advice that we would always give is, let's make sure that the process makes sense first, and we optimize what makes sense, and then we apply the appropriate automation for the optimized process.

Rather than let's just supersede everything that we do now with something that does it a little bit quicker and in a more technical way. So that would be the kind of thing I would say is one of the biggest parts. And the other part is actually the acceptance of automation. So as I said at the start, it's kind of not always just this big bang solution of let's just wipe clean and automate everything.

Automation is now being introduced in stages into operations that are already running alongside people who have been there for maybe a quite long time. So there's also an acceptance of the automation into the operation that needs to be thought about and introduced carefully, because ultimately you need the people that are still working in the operation to adopt it, work with it, make sure that it is maintained, and cooperate with it. And if they don't do that, then that ultimately the process doesn't work.

So there's a kind of two main things. One is making sure the process is optimal, and then the second is making sure that it's in introduced and managed and implemented in the right way with the right people on board. I can imagine that that could actually be a benefit when looking at automation when a potential solution is on the table and we're looking at to your point, you know, making sure that the process itself is first optimized, the people or the knowledge about that process, what it entails, you know, all the effort that's being produced, any exceptions to that process.

That is all information intellectual capital that exists and resides in those people who have been doing the process for so long, so they're integral to the decision in order to figure out, you know, what that process is and where automation is going to be helpful or useful or valid even I think. Are you finding those conversations, Yeah, absolutely, I mean it's really it's not just a few parties that need to be prevented to these conversations around what makes sense. It's it's a wider view.

It's not only operations, but it's it it's hr it's all of the kind of departments that have a play. But it's also okay, we optimize the process, but we also need a view on what is our ambition because there's change, you know, maybe we're acquiring new product, maybe we're going to change the whole size of our product. In the next few years. So we need to also be looking at what things do you want to achieve and what things are you planning to change or what might change to make sure that whatever the solution is is the right one, that's adaptable and flexible enough to be able to cope with that.

And the best people to get involved in that other people that are doing to do because they know it, and they know it better than anybody else because they're doing it day to day. So it would be really foolish not to get some input from operations team when assessing anything like any kind of operational change. When it works well, the entire organization is involved, the entire business is present and represented in the decision, and everyone understands how this change is going to affect their area of the business.

That's what that's the ideal situation for an automation transformation like this. On the other side, when they're not aligned or when an automation project does not get off the ground, is there some thread that is of similarity between those? Is it lack of understanding of what the organization needs? Is it those poorly executed processes in the first place?

What's causing these ambitions for automation to fail. I think it's really important that there's a clear objective as to why automation is being introduced, so that it's very alluring and very exciting to have something that's kind of shiny and new in a sight. But there has to be a reason for it. And I think if there's a reason for it that's built by fact and data, and everybody has agreed to the facts and data which drive that decision, then it's easier for people to get on board, and therefore that kind of discrepancy and disagreement is maybe not there because we've actually we've all gone through the relevant steps and we've all agreed to all of the assumptions and the data that is feeding this decision.

It's a lot easier to make a decision when it's based on fact, because it's really hard to disagree with black and white or hard numbers. Yeah, that's true, although you know so much in supply chain is not black and white. It's different shades of in between. You know, not every solution is the right solution, and not every application is the right application, so there's a lot of ambiguity there.

And yes, I think having that clear black and white yes, no binary of should this happen or should this not? Is it not ready? This is why it's so important to have so many parties involved, because they bring different viewpoints and can you know, if you have one person trying to make such a large decision, they only have their viewpoint and they're only looking at it one dimensionally, Whereas if you've got lots of parties involved, they bring different experiences, different requirements, different thoughts to the process.

Which then even if you are making a decision on one criteria, you've had the time to consider all of the other characteristics in criteria which should be considered whether ultimately they enforce the decision or not. They've been discussed and talked about, which is equally as important on that journey of implementation. You know what, that's a really interesting perspective on that, because I know from our point of view. You know, when we work with these copanies on their projects and we come to them and they say i'd like a concept design or i'd like you to help me figure out what we should do here, and then the decision is ultimately nothing, We're not going to do this.

This project is canceled. This is tabled. We're not doing that. It's a no.

That's not a bad thing. No. No. In a lot of cases, no.

And there'll be a reason for why it's a no, because you know, something might have been discovered and it may be that actually automation is not the answer, and it may be that a manual solution or a hybrid solution is actually the best way to optimize the process, because like I said earlier, you know, when you've got a process with fat in it, once you've stripped that away, you're then comparing your return in whichever criteria you compare it to this new, revised baseline rather than where you were.

And I think when people kind of strip that away, then they realize, actually, maybe there isn't quite a case for it than we thought. So exactly, do nothing can equally be as good an option as any other. And and that knowledge is something that they can walk away with and really better understand their business and their operation for sure. For sure.

I mean, if something comes up from one party which kind of throws a spanner in the works, if you like, but it's an it's a go or no go, then that's a valuable piece of input. One hundred yeah, absolutely. So for any companies or individuals out there right now that are considering automation, they're they're exploring their options, they're looking at where it could fit into their operation. Where should they start?

Should they should they start with that that process mapping and really understanding what's happening or you know, is is that something that happens further down? It's I would definitely say to start with the process. So start with what your process is and then look at how it's going to develop for the future. So we're looking and we need to be looking really at kind of five ten year window or bigger things that have a window that has a bigger impact on what might change.

So it's looking at the process, is putting some data around it, it's not getting distracted by kind of all the shiny options out there, which is very easy to do. And then it's saying what is the problem that we're actually trying to solve with this automation. So are we trying to reduce headcount? Are we trying to increase service level?

Are we trying to increase capacity so that we can then take on additional we can acquire additional business for example. So first is definitely to start with the process, and then it's to think about, actually, this is the future state we want to get to, and then thinking about how do we get there? So what are our steps that we need to enable this kind of implementation roadmap, So it's not kind of now until ten years, it's now ten years and then all of the kind of steps in between that give us those kind of building blocks to get to where we want to be, and considering in that as well, things like flexibility, scalability.

What if what I thought at the start is actually not happening. What if we're not going to acquire that amount of business, what if we grow twice as much as we thought, what is our what options do we have? And also kind of bearing that in mind as well when you're picking the automation that you want to use, is what is that flexibility and scalability element of it and how does that impact the solution that you're looking to implement. That's one reason why we push our involvement, and I know it seems it seems counterinto it to hire a middleman a consultant to just to come up with the concept for an automation project because all of these companies.

You know, they have an integrator, they have a salesperson who can explain what what capabilities this this particular technology has, or you know, what the return on investment can be, and they they have calculators for all of that and they can figure that out. But they're they're trying to sell their product and they're doing a great job of it. But they're not going to sit down with you and look at that process in depth. They're not going to do the time studies, they're not going to do the labor studies.

They're not going to to you know, sit and walk through a plant with you know, on the floor individuals and say, you know, are you following this process exactly or are you making exceptions throughout throughout your shift? And and that's where having that level of let's take a very granular look at your operation is so valuable before or you start talking you know, dollars and and actual you know sizing, does this fit, will this work here? Can we put this here? Do we go AGV or do we do something else?

You know, those decisions are so much further down the line that that company, that that technology company actually can't help you figure that out. And organizations often don't have the bandwidth internally to to do all of that work and still operate as normal. Yeah. Absolutely, And also it's it's there's a catalog of product, so sometimes a solution has to then be shoehorned into that catalog of you know, I have this, so therefore that's what we'll do.

But actually, our clients deserve better than that, and they should have the they should have the option to have what is right for them, what's the optimal thing for them, rather than just kind of something that somebody can provide. Doesn't mean they should. Well, or it doesn't mean that it's the right fit for them, because, as you said, there are so many vendors out there and so many products and variations of those products offered by different companies. So you know, finding that right fit is kind of a needle in a haystack, especially for someone who already has a job to do.

They've got their functions, they've got their responsibilities. Sometimes you know, you have a department, a procurement department that can look at those things more closely. But again to your point, looking across the entire organization, getting all of those business units involved to understand the implications of changing something this drastically is a lot more than a lot of companies have the internal bandwidth to take on. The Other part of it is that you know, these projects that are being implemented when whether they're kind of big or smaller in between, they're not projects that come along all the time.

They're projects that you wouldn't do every day. So there's a lot of trust that is being put in to a supplier or a vendor to tell the client or the occupier what is the right solution. And I think that's the benefit of having an impartial party is actually that you know, we want to find the right solution for the client. It's not it doesn't matter to us where they source the product from.

What matters to us is that the solution is correct, and then we can support the client. Because they're not doing it every day, there's some questions that maybe they wouldn't ask, that maybe they should ask, and that's something that we would be able to help with in terms of kind of advocating for them and being that technical person to say, well, actually that won't work, or I don't believe you know that throughput is achievable based on X, Y and z And it's really important to be able to challenge suppliers as well as have a good conversation with them about what you need.

So I think that's also the difference with when you're looking at it through with consultants rather than directly to vendors. You mentioned something a minute ago talking about the customer or the occupier, and so it made me wonder, because I'm not a consultant, I'm not out there doing the project work. Is this different when it is for an owned property or an owned situation versus the three pls, the logistics, the warehousing. You know, companies that rent out the space and they're looking for automation because a client is either asking for it or demands it or is part of their contract.

Does this conversation change when it's a third party? Yeah? I mean for us, we work on both sides, right, So we would work with clients who occupy three PR sites, but we also support three pls in their responses to occupiers. So, and there's different criteria depending on which side of the table that you're sat on in the kind of occupy a sense, maybe your or the kind of end client sense if you like, there may be an assessment of should we should we use a three PL at all or should we do it ourselves in some kind of way.

So there's that question, and in which case your level of automation may be different because you're it's your business and it's under kind of your financial sheets. But the kind of from a three PL side, it would then be, well, how long are we looking to have this client in for and how long are they going to commit to? And therefore, if they commit to longer, we would likely implement a higher degree of automation if appropriate. Right, But if it's a short term contract, the likelihood would be that it wouldn't.

It wouldn't be a kind of a fully automated solution unless they had space in an existing site to put somebody in. But it all has to be the has to be right for the scenario, which is why it's not a kind of clear cut yes, do it, don't do it. It's more of a what do you need? What's the longer term goal?

Does it make sense? Now? That's interesting that it's it's a very different perspective, even from that technical aspect, depending on who that end user really is. Yeah, exactly do we see these automated solutions mainly in the distribution and warehousing or are we seeing a lot of automation creeping into manufacturing sites too.

There's definitely a lot of manufacturing automation out there. I think for us, predominantly, our focus is on kind of logistics automation and finished goods handling or feeding to and from the line, so kind of raw materials handling, receiving finished goods and storing that in a certain way. But definitely, I would say the kind of experiences that the on the logistics side, it's very rare. I mean, there's a perception that everyone's going for automation, but actually that's where we're seeing this kind of drip feed of implement implementing bits of automation, testing the waters, and it's kind of implementing partial automation and then seeing what the future could look like if there was more to be implemented.

So, if there's one thing you want listeners to take away from our conversation today, what would that be? It's a good question. I think the thing for me would be to think about the bigger picture. So think about before automating anything, think about what the process should look like and what changes are expected, and from there you'll you'll open up all kinds of conversations which then allow the solution to kind of become clearer and clearer.

It will be muddy, it'll get muddier before it gets clearer. But I think it's not just it's not just automating. It has to have it has to have a purpose, has to be part of a strategy, and it has to make Okay. I like that.

So listeners, you need to be you need to have your zoom ready. You need to be able to zoom out to see the whole picture, and then you need to be able to zoom really far in to look at those processes very closely and ensure that they are ideal at the beginning, before any actual conversation about what solution makes sense can be had. Absolutely, automation is absolutely transforming warehousing, but not always in the ways that people expect. It's not just about the technology.

It's about making the right decisions at the right time for the right parts of your operation. Because the goal isn't to automate everything, it's to build a supply chain that actually works today and in the future. Thank you so much, Sophie for bringing some clarity to this topic that's often oversimplified. Thanks for having me.

It's been a pleasure and we must not wait another seventy seven episodes to do this again. Absolutely, as always to our listeners. If you found this valuable, share it with someone in your network who's navigating these same types of decisions, and hit that subscribe button so you don't miss out on future insights. Thanks for tuning in to Speaking of Supply Chain.

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