Warehouse robot in e-commerce

Kiva warehouse systems help Amazon save up to 20% of its operating costs at each of the corporation’s warehouses, which is about $20 mio per annum in the aggregate. In Russia warehouse robotics has not become a feature trend for online stores yet. Nevertheless, some companies have started testing foreign and domestic solutions for automation of warehouses operation. The first pilot projects are expected to be launched next year by Russia’s startup Cybersklad [cyberdepot]. At the moment the company is negotiating contracts with Wildberries and Eldorado stores.

Goods-to-man system

A warehouse employee needs 40 to 60 seconds at best to get to a shelf and to pick up a good for order batching, Sergei Simonov, Cybersklad co-founder and Marketing Director, says. An automated system the startup invented and is now developing for online stores, only needs 6 seconds for such an operation, as instead of a worker inventory moves around a warehouse will be made by a swift and accurate robot.

“There is a demand for such a solution now. If a human is replaced by a robot to deal with the least skilled labor, the economic advantages are quite evident”, Sergei Simonov explains.

Cybersklad system is installed on a turn-key basis and includes a mobile robot, an order batching station, shelves, fencing with a perimeter control system, and a computerized management system. In fact, it is not intended to completely exclude a human being from the process. The final batching will still be done by people, but the goods for that will be delivered from the shelves by robots (goods-to-man format). This way, a warehouse worker will not have to move about a warehouse which consumes up to 90% of work time. Batching process will also be automated. For that, pick-by-light technology will be employed, when a bay where respective items are stored is lit to accelerate and simplify the search process. Cybersklad computerized control system will help rationalize goods positioning on the selves. That will ultimately increase a robotic warehouse efficiency by over 50%. Besides, employing robots is unquestionably cheaper than employing humans.

“Operating our robot (including its depreciation) will cost RUR 150K ($2.4K), whereas respective employees salaries are at least RUR 500K”, Sergei Simonov says.

Betting on e-commerce

The project founders Vladimir Sokolenko and Sergei Simonov have been developing Cybersklad system since 2016. In 2017 the company got a status of a Skolkovo Technopark resident. Vladimir Sokolenko, Cybersklad CEO, had had a relevant experience of warehouse rototization for Utkonos [Platypus] online hypermarket. The project was a participant to Telecom Idea accelerator (by MTS, Russia’s largest mobile operator) and to the largest national accelerator, GenerationS, launched by the Russian Venture Company.

For now, the startup plans to approach online shops, but in the future its technology can be employed for logistic purposes. The team is also considering use of its system in the manufacturing industries. Such an idea was the result of participating in GenerationS. At the moment, a technical assignment from United Engine Corporation Saturn is being finalized to design a storage and retrieval system for its computerized production site.

The startup has got a computerized warehouse simulator which can identify the best suitable algorithm and system composition for a customer, as well as costs involved and possible saving rate. A robot prototype is also available. It can move at 2 meters per second along special signs on the floor and has a payload of 500 kilos.

The project’s future is certainly dependent on investments. Within the next three years about RUR 150 mio ($2.4 mio) of investments will be required. The founders of the project have already invested some RUR 10 mio and received some grants, including one from Skolkovo (of RUR 1.5 mio).

At the moment, the project has got an investor and conducts negotiation with a Russian investment fund. If everything goes smooth, by the yearend a Cybersklad sustem’s prototype will be available, and pilot launches are anticipated in the first half of 2019. It is expected the production facilities will be located in Tver Region. The price of a system may range between RUR 20 mio and 25 mio for a warehouse which handles two to three thousand orders a day. It should pay off in 2.5 to 3 years.

High costs, high prospects

Warehouses robotization and employment of analytic IT systems for items placement optimization is an inevitable trend for the sales and warehousing/logistics industries, Oleg Gaidenko, Director of Mobile Solutions for Business at Panasonic Russia, believes.

“Both B2B and B2C customers expect that suppliers will continuously improve the service quality, lower prices, reduce delivery terms. They also want to be able to trace each order at every stage of its processing”, Gaidenko says.

To stay competitive, companies will have to improve warehouses operation by using IT systems and robots. He admits though, that it is the case of companies with significant turnovers, where such optimization can produce a visible economic effect in the medium and long term.

“Technology warehouse solutions are necessary as they help streamline and accelerate processing while minimizing expensive manual labor”, Maxim Tolstobrov, Marketing Director at SDEK logistics company, agrees.

He notes that foreign players already employ such solutions, whereas China’s Shentong (STO) Express has completely replaced workers at its warehouses with robots which helped reduce costs by about 50% and speed up cargos processing and dispatching by 30%. Some isolated robotization solutions may be found in Russia as well. Still, Cybersklad’s solution is too expensive for companies to buy it instead of hiring a worker, Tolstobrov thinks. Besides, Cybersklad system is yet to be further improved and finalized.

Andrei Shevtsov, Director of StreetStory retail chain, disagrees with arguments of low cost labor availability.

“For a business, it’s more efficient to invest in a technology instead of constantly paying for unskilled yet not-so-cheap labor”, he says.

At the moment, the Cybersklad solution may only be discussed theoretically, Denis Ivannikov, Chairman of the Board at MaxiPost courier company, notes. Yet the direction of efforts is right and promising, he believes.

Cybersklad representatives agree that a warehouse system must demonstrate very high efficiency in Russia in comparison to its foreign analogues, namely because of the cheap labor availability. The company is now developing a totally new solution which will increase the system’s productivity. The developers intend to come up with new principles of robot’s orientation at a warehouse. That will increase its movement speed. The details of the technology are not disclosed now. Lidars may possibly be employed for it. Besides, robots will have a life cycle of about ten years. They will have a system for monitoring their key elements’ residual operation time. That will allow performing maintenance works before any failures occur.

“Once the system is seen in operation, the customers will certainly make up their minds. And they will not have much of a choice since foreign players can come to our market in a very distant future only” Sergei Simonov resumes.

By Olga Blinova