NEED FOR IMPLEMENTATION – AUTOMATION

According to operations experts, while storage and inventory management comprised 60%
of the entire supply chain cost, warehouse operations constituted 25% of the entire supply
chain cost. Most Indian e-commerce companies seemed to be unaware of the importance
of supply chain management, especially warehouse operations management, in efficient
cost management. Moreover, the use of technology in Indian warehouses was dismal with
most basic operations such as sorting, picking, storing, and documenting done manually,
resulting in inefficiencies and errors.

MOVE TOWARDS AUTOMATION

Flipkart learnt that AI (Artificial Intelligence) coupled with the robotics process of
automation increased delivery output by almost 200%, made efficient use of existing space
in the warehouse, reduced lead time, lowered operating costs (OPEX) , streamlined revenue
processes, and eliminated errors...

THE BUTLER SYSTEM

The Butler system was an automated inventory storage, replacement, and order picking
facility that was usually deployed at warehouses, fulfillment centers , and distribution
centers. It consisted of an advanced autonomous mobile robot called Butler; Mobile Storage
Units (MSU) or racks; pick-put stations; and Smart Charging Stations. .

THE SORTER SYSTEM

The Sorter was an advanced robotic sortation system that automated the sorting processes
in warehouses and fulfillment centers. Two double-deck and five single-deck sorters of
capacity 6,000 sorts/hour each, apart from four sorters of capacity 3,000 sorts/hour each
were installed at Flipkart’s Hyderabad fulfillment center and eight transport centers...

RESULTS OF AUTOMATION

Though automation was a costly affair requiring heavy investment, it was expected to
provide a host of benefits. GreyOrange estimated that the typical return on investment (RoI)
for warehouse automation was usually achieved in around 18 months of operation. The life
of the system was estimated to be around 10 to 15 years, while actual savings would begin
from the third year. .

THE GREY AREAS OF AUTOMATION

Though automation was a costly affair requiring heavy investment, it was expected to
provide a host of benefits. GreyOrange estimated that the typical return on investment (RoI)
for warehouse automation was usually achieved in around 18 months of operation. The life
of the system was estimated to be around 10 to 15 years, while actual savings would begin

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from the third year. .

ROAD AHEAD

As of 2017, GreyOrange was one of the top 50 robotics companies in the world in the area
of automation technology. It had a near monopoly and held almost 90% of market share in
India’s warehouse automation market. Apart from Flipkart, other e-commerce companies
like Myntra, Jabong , and DTDC had adopted its automation technology, resulting in the
company growing 300% year-on-year during the five years of its existence.