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Machinery that stores, transports, or lifts objects from one location to another is known as
product handling equipment. This equipment helps with the internal storage and management of
goods as well as the relocation of heavy loads. The equipment used may be manual or
automated, and while automated product handling may initially cost more, it improves safety and
efficiency by lowering errors, waste, and accidents. In almost every company for a very long
time, product handling has been essential, but due to globalization and the increase in online
shopping, it is now becoming increasingly vital.
How to Use Industry Applications
When providing answers for a case study exam, it can be helpful to use real-world examples
from your industry to support your reasoning and justify your decisions. These examples can
help to provide context and show that your proposed solutions are relevant to the company's
specific situation.
However, you should be careful not to use industry examples just to make your answer look
longer or more impressive. Instead, use them to make your argument stronger and to show what
you know.
Other than that following are some important factors you can follow when providing answers for
the case study exam.
• First, read and understand the case study question carefully. This helps you figure out the
main problems the company is facing and any important information or data.
• Next, think about all the stakeholders involved in the case study and what they want. This
helps you come up with a good solution that takes every relevant stakeholder’s interests
into account.
• Finally, explain your solution clearly by addressing the three parts ‘what’, ‘how’ and
‘why’ for the given solution.
The global product handling equipment market is expected to witness a significant rise during
the forecast period. The growth of the global product handling equipment market is primarily
attributed due to the rising use of the goal of employing material handling equipment to improve
customer service by making it easier for clients to find, transfer, and send any product they want.
Utilizing material handling equipment helps speed up the process of moving objects from one
place to another. There is a chance of damage occurring when products are handled physically
during transit and transfer. Employing product handling technology to transport products safely
and easily can lessen the risk of product damage.
Additionally, a lot of automation is required due to the global e-commerce industry’s growth.
During the projection period, it is anticipated that the global market for product handling
equipment would expand due to large retailers like Amazon, Walmart, and others gradually
integrating automated technology into their operations to make them more accurate, efficient,
secure, and cost-effective.
However, one of the key factors that might hinder the market from growing is the expensive
initial cost of buying and maintaining product handling equipment. Small and medium-sized
businesses are unable to compete with global giants because of the high investment requirements
for installation, procurement, programming, integration, and other services. In the upcoming
years, high maintenance expenses will also be a barrier to market expansion.
Market Drivers
• E-commerce growth - E-commerce sales are growing rapidly, and this is driving
demand for warehouse product handling equipment to support the efficient processing
and fulfillment of online orders. For example, Amazon is using automated conveyor
systems and robotic picking systems to process millions of orders each day.
• Globalization of supply chains - Companies are increasingly sourcing goods from all
over the world, which is creating a need for more efficient and reliable warehouse
product handling equipment.
• Advancements in automation technology - Warehouse operators are increasingly
adopting automated warehouse management systems (WMS) and robotics to improve
efficiency and reduce costs. This is driving demand for warehouse product handling
equipment that is compatible with these systems. For example, many companies are using
automated guided vehicles (AGVs) to transport goods around their warehouses.
• Enhanced visibility - Warehouse product handling equipment can help to enhance
visibility into warehouse operations. For example, warehouse management systems
(WMS) can track the movement of goods through the warehouse in real time. This
information can be used to improve efficiency and identify bottlenecks.
• Increased productivity - Warehouse product handling equipment can help to increase
productivity by automating tasks that would otherwise be done manually. For example,
automated conveyor systems can transport goods from one part of the warehouse to
another more quickly and efficiently than human workers. This can help warehouses to
process more orders and meet customer demand more quickly.
• Labor Shortages - Many regions are facing labor shortages in industries that rely heavily
on manual material handling. This has prompted companies to invest in automation and
robotics to fill the labor gap and improve overall productivity.
Market Restraints
• High initial costs - The initial costs of purchasing, installing, and maintaining product
handling equipment can be high, especially for large or complex systems. This can be a
barrier to entry for small and medium scale businesses and can also make it difficult for
businesses to upgrade their equipment as needed.
• Lack of awareness - There is a lack of awareness among businesses about the benefits of
using product handling equipment. Many businesses are still using manual methods of
handling products, which can be inefficient and time-consuming.
• Technical complexity - Some product handling equipment can be technically complex to
operate and maintain. This can require businesses to invest in training and technical
support, which can increase the time consuming and add to the overall cost of ownership.
• Volatility of raw material price and technology upgradation - The prices of raw
materials used to manufacture product handling equipment and the new technologies
used to create automated product handling equipment and systems can fluctuate, which
can affect the cost of the equipment or the system. This can make it difficult for
businesses to budget for product handling equipment purchases.
• Regulatory Compliance – when using product handling equipment in warehouses there
are certain regulations have to be complied to ensure the safety of the premise and the
workers. Failure to comply with these regulations can lead to fines, reputational damage
and legal action which will hinder the growth of this market.
Warehouse Automation
Warehouse operations are traditionally labor-intensive. Startups leverage advanced
robotics to reduce manual processes in warehousing. By integrating automated guided
vehicles and autonomous mobile robots, warehouses lower the need for labor in handling
materials. This avoids human errors and improves the safety of both workers and
inventory safety.
Ware and Peer Robotics are two US-based startups that are using robotics and AI to
digitize warehouses and automate inventory tracking. Ware develops autonomous drones
that fly within warehouses to create a digital twin of the inventory, while Peer Robotics
develops collaborative mobile robots that learn from human operators to enable material
handling and movement in close and clustered environments. Both startups' solutions can
help warehouses to improve their efficiency and productivity.
Inventory Tracking
With a large number of items moving in and out, warehouse managers need to track all
goods to avoid inventory loss due to spoilage, damage, or theft. Inventory tracking
solutions eliminate the possibility of human errors and provide transparency in the supply
chain.
Octorite Technologies develops a tunnel-based RFID scanning system that uses its
proprietary antennas. The system automatically starts the reading procedure with the use
of sensors when a trolley or a pallet is in the correct position. Additionally, it develops an
iTrack software system that communicates to the RFID hardware and reads 1000 tags per
second. OCTORITE enables warehouses to automate and proceed with the high number
of tag scanning faster
Internet of Things
Warehousing startups are developing IoT solutions to control and optimize processes.
Connected sensors track assets across the storehouse and monitor temperature, moisture,
lighting, and other conditions. IoT enables inventory management and analytics by
leveraging real-time data from beacons. Smart shelves broadcast stock information and
determine when the products need to be replaced.
Another implementation of IoT technology in warehouses, digital twins extract data from
the warehouse network and warehouse management systems to create a real-time model
of the warehouse. These enable warehouse managers to visualize operations, search
inventory, or simulate changes to layout and workflow.
Indian startup ScratchNest provides a compact IoT beacon with a long battery life for
user location tracking. Equipped with Bluetooth low energy (BLE) technology, the
wireless transmitter sends signals to smartphones or tablets, making it easier for operators
to track the location of both inventory and personnel.
Immersive Tech
Fast delivery of the right products to the right destination within a warehouse depends not
just on the equipment but also on personnel skills. To maintain employees’ efficiency at
the highest levels, warehouses are integrating immersive reality solutions. Virtual and
augmented reality (VR/AR) simplify the implementation of new procedures, warehouse
expansion planning, predictive modeling, and designing delivery processes.
Virtual reality enhances employee skills with immersive training in warehouse tasks.
Augmented reality finds use in the process of searching for a product, showing the
optimal route to the item. Immersive reality technologies improve decision-making
processes through operations visualization.
Sustainable Warehousing
As warehouses produce tonnes of waste during operations, minimizing the environmental
impact is at the heart of the sustainable warehousing trend. To move towards green
warehousing and curb the carbon footprint, startups are using automated handling in the
operational processes. Such equipment emits fewer emissions and is able to operate
without lighting, reducing energy consumption.
Fleet Management
Efficient and safe interaction between equipment and workers contributes to productivity
and prevents hazards. Fleet management optimizes warehouse layout, minimizes forklift
accidents, provides real-time asset monitoring, and enhances drivers’ safety and health. A
fleet increasingly features diverse warehouse vehicles such as hand trucks, AGVs,
conveyor belts, forklifts, and mobile robots.
When physical activities are replaced by vehicles and robots, a fleet management system
is a solution that is capable of collating all types and brands of robots and forklifts onto
one platform. It enables traffic control, empowers interoperability, and facilitates
automated task allocation, providing full control of the machinery.
Latvian company forkNAV offers forklift management software that organizes and
optimizes the forklifts’ work in warehouses. It saves forklift operators time on finding
items, shipping, and work orders on paper. The solution eliminates the need for an extra
tagging or labeling system and provides automatic work order distribution, enabling
automation. Further, it provides inventory tracking and analyzes forklift utilization for
process improvement.
https://business-review.eu/tech/mobile-industrial-robots-autonomous-mobile-robots-staff-
shortage-246616
According to recent data, around 20% of warehouses have used some form of robotics. Amazon
alone has over 500,000 active robots operating within its facilities. These numbers show that
warehouse robots are not a thing of the future, but a reality for the supply chain of today.
Why are automated warehouse robots becoming more popular in modern warehouses?
Automating warehouse processes with robots helps reduce reliance on human labor, leading to a
more cost-effective, productive, and safe facility.
Robotics can greatly benefit the warehouse workflows. Warehouse robots have the ability to:
Reduce costs: You must pay warehouse workers salaries and benefits. Robots, on the other
hand, don’t require wages. The cost efficiency of robots makes them an excellent solution for
reducing warehouse operating costs.
Boost efficiency: Warehouse robots are tireless, while human workers get tired and may make
mistakes. Studies even show that human error is the leading cause of problems in 46% of
warehouses, costing businesses trillions of dollars. With warehouse robots, you can automate
repetitive or complicated tasks to reduce errors and improve efficiency and productivity.
Improve safety: Autonomous mobile robots can handle storing, picking, and packing heavy
goods without human intervention. Fewer human workers handling dangerous equipment or
heavy items will reduce the risk of costly or deadly accidents within your warehouse.
Provide real-time data and insights: Automated robots can provide actionable insights for
improving warehouse operations without much delay which leads to improve the efficiency of
operations by less time consumed.
“Amazon warehouse robot uses AI to handle millions of items” – Technology
https://technologymagazine.com/articles/amazon-warehouse-robot-uses-ai-to-handle-millions-of-
items
Amazon has revealed its latest intelligent robotic system, Sparrow, which it says streamlines the
fulfilment process by moving individual products before they get packaged.
Amazon says Sparrow is the first robotic system in its warehouses that can detect, select, and
handle individual products in its inventory. The company says Sparrow represents a significant
advancement in the state-of-the-art technology of industrial robotics, leveraging computer vision
and artificial intelligence (AI) to recognise and handle millions of items.
Currently, once items are boxed up by employees, the company’s existing Robin and Cardinal
robotic arms redirect packages to various locations in the warehouse before they begin their
delivery journey. Last year Amazon says its employees around the world picked, stowed, or
packed approximately five billion packages—or over 13 million packages per day.
Amazon began using robotics in its facilities in 2012, and since then the company has added
more than one million jobs worldwide while simultaneously deploying 350,000 mobile drive unit
robots. Last year Amazon announced it was testing and developing new technologies in order to
help to make employees’ jobs safer, including technologies that help move carts and packages
through its facilities.
Amazon says the design and deployment of robotics and technology across its operations have
created over 700 new categories of jobs that now exist within the company.
“Tompkins Industries Reaches New Heights with its Vertical Lift Automation
System” – MANUFACTURING TOMORROW
https://www.manufacturingtomorrow.com/story/2023/08/tompkins-industries-reaches-new-
heights-with-its-vertical-lift-automation-system/21083/
Vertical Lift Modules (VLMs) are a “goods-to-person” picking solution that allows users to pick
orders very efficiently while optimizing space utilization within a facility. Its internal software
allows this seemingly complex machine to be one of the most user-friendly tools in your
warehouse. VLMs are capable of delivering one or two trays at a time to the picking area and are
often used to store and pick smaller cube, slower-moving items.
VLMs are also great with space utilization, condensing 5,000 square feet to about 150 square
feet for the machine, a 90% decrease in your footprint. They can also utilize either inside
picking, where the trays stay entirely inside the device, or outside picking, where the actual
picking bay comes out 3 to 4 feet. VLMs offer user-friendly interfaces for many functions
making it the perfect customizable addition to your facility.
Tompkins a major manufacturer and distributor of hydraulic and pneumatic products and
accessories moved to a new facility two years ago, doubling its footprint due to the company’s
steady growth over the last 13 years. Unfortunately, the larger warehouse space slowed their
order-picking process because of the extra footsteps required to complete orders. This new
challenge and the difficulty of hiring labor to accommodate the company’s continued growth led
Tompkins to consider Modula's automated vertical lift (or “tower’) to increase the number of
lines picked daily at its headquarters in Olathe, Kan.
Warehouse automation plays a pivotal role in achieving efficient inventory management for
businesses across various industries. By integrating cutting-edge technologies such as robotics,
RFID systems, and automated inventory tracking software, companies can streamline their
warehouse operations, reduce human errors, and optimize inventory levels. Automated picking
and packing processes significantly enhance order fulfillment speed and accuracy, ensuring that
customers receive their products on time. Moreover, real-time data analytics and reporting tools
enable businesses to gain valuable insights into their inventory turnover rates, demand
forecasting, and inventory holding costs. This data-driven approach empowers organizations to
make informed decisions, minimize excess stock, and allocate resources more efficiently,
ultimately enhancing their competitiveness and profitability in the dynamic marketplace.
AGVs and AMRs increase order accuracy to 99.99% or above!
AGVs (AS/RS) have the potential to increase order accuracy levels to above 99.99%. These
vehicles ramp up the storage and retrieval process.
These industries are already reaping the benefits of using next-generation automated material-
handling equipment:
• aerospace
• agriculture
• automotive
• construction
• manufacturing
• e-commerce
• retail
• pharmaceutical.
Managers in the auto and pharma industries are using these retrieval systems to improve process
flows. The systems also increase safety levels and help in better shelving.
The AS/AR systems must integrate with the other tech solutions for efficient output. They can
also connect to a company’s network. This makes monitoring their load handling easier.
Automated guided vehicles feature sensors and detectors and can move on preset pathways.
Robots are useful on an assembly line and for doing repetitive tasks.
A news report says that there were roughly 60,000 orders for warehouse-ready robots in 2020. In
2021, these orders jumped to 100,000. Amazon and Walmart already have robots operating in
their fulfillment centers and warehouses. They are possible answers to the present labor crunch.
Amazon has recently come up with a new robotics arm called Sparrow. It also announced a $1
billion investment in automation and robotics. One more big player started using advanced
technology. Walmart deployed robotic solutions and software automation platforms. Their
partner for this upgrade was Symbiotic.
Drones in inventory management or product delivery tasks can boost work efficiency.
Companies also used drone deliveries for curbside pickups during the pandemic.
Henceforth, Walmart started using drones to deliver wellness and grocery products during the
pandemic. Amazon launched its own Prime Air Drone delivery service. It has autonomous robots
named Scouts on delivery test runs.
A study by McKinsey said that the rate of automation in global deliveries would reach nearly
80% in the next decade.
There are several advantages of partnering with AI product manufacturing company. Having
latest technology readily available is one of the main advantage which can have since there can
be shortage of modern technology knowledge in the material handling equipment production
industry. Having this knowledge readily available will lead to achieve competitive advantage in
the industry.
With partnering with AI based company helps to reduce cost on research and development and
labor cost related to technology usage aspect in the company as it will be provided by the
partnering company. Further customer reliability on the automated products produced will
increase as they know the products are produced under the guidance of expertise.
KNAPP, technology partner for intelligent value chains, and Covariant, a leading global AI
robotics company, strengthen their partnership to further develop AI-powered robot solutions
and expand their market presence. So far, KNAPP and Covariant have successfully implemented
multiple projects together, with KNAPP’s picking robot – the Pick-it-Easy Robot – at the
forefront of their endeavors. The robot’s ability to handle a wide range of items and suitability
for various sector applications have proven their value in improving warehouse efficiency across
numerous industries.
Answer Point
Currently we are producing forklifts, hand trucks and shelving in our Darrland Factory and we
have a reasonable demand for these products there. But currently many large warehouses tend to
use more autonomous equipment to manage their inventory. For example, Amazon has recently
come up with a new robotics arm called Sparrow. It also announced a $1 billion investment in
automation and robotics. This would indicate that the demand for mobile robots will increase in
the future and it is viable to produce more of mobile robots compared to non-automated
products.
Automated product handling equipment can largely reduce time spent on managing inventory
and they can reach the places where humans find hard to reach. Further safety is also increased
when automated handling products are used. Hence many warehouse management companies are
interested in moving from manual handling equipment to automated equipment which will result
in higher sales. For example, Murata Machinery Ltd increased their revenue by approximately
$300 million within one year by investing in large scale automated equipment production.
The selling price of automated product handling equipment is higher than manual handling
equipment as the production cost is high. Although the current trend is to use more automated
equipment the inflation in the world economy has restricted companies to make the transition of
moving from manual product handling equipment to automated handling equipment. Hence the
demand for the automated product handling equipment can be reduced and expected sales will
not be able to achieve.
Example Trigger – As you are aware board of directors of Robobryce are interested in
acquiring NextGen a software company which primarily provides automated warehouse
management systems. Provide your advice on suitability of acquiring NextGen.
Answer Point
Currently Robobryce provides customers with extensive consulting support in the design and
installation and ongoing support of warehouse systems. The company employs 800 business
advisers who can assist at all stages of the design of a new warehouse or the upgrading of a new
facility. If we acquire NextGen we will get the opportunity to create warehouse management
systems which are mainly compatible with our automated products. Hence this will not only
generate revenue from providing services on creation of warehouse management systems but
also increase the demand for our automated products as well.
Due to this acquisition we can fulfill the expertise of hardware as well as software side related to
product handling equipment production in Robobryce. This is because currently we are more
competitive at providing product handling equipment part only. By acquiring NextGen we can
get the support of their experienced employees when providing services to our customers related
to warehouse systems. And also we will be able to use the knowledge possessed by NextGen in
producing our autonomous products as well.
Recently, Ferag AG, a renowned family-owned Swiss company with over 65 years of experience
as a global market leader in material flow systems, and dereOida, an Australian pioneer in
warehouse automation software with their revolutionary doWarehouse system, united their
strengths to offer an unparalleled intralogistics solution to businesses across various industries. It
is believed that the merger of these two industry innovators presents a transformative offering for
businesses seeking to optimize their warehouse operations. By combining Ferag's unparalleled
expertise in material flow systems and design with dereOida's state-of-the-art software solutions,
customers can expect an end-to-end solution that addresses every aspect of intralogistics with
unprecedented quality, reliability, and support.
But on the other hand, it is important to get the opinion of our shareholders about this acquisition
as they might play a key role when raising funds for the acquisition. Further it is advisable to
check the recent financial statements of NextGen, new services they offered and also the
working culture of the company before communicating our interest in acquiring them.