The robots are coming, Part III

Robotics is one of the most exciting emerging technologies in the materials handling industry. Over three blogs, I’ll take a look at the development of a new mobile piece picking robot by a start-up with roots at Carnegie Mellon, and a pilot test at a pharmaceutical and medical supplies distribution facility. The columns aren’t meant to be an endorsement of any one company or its solution, but a look at one project.

Much has been written lately in the mainstream press about the future of robotics. Both the New York Times and the Wall Street Journal  have noted how robots are growing in the workplace, as has the Boston Consulting Group.

The trend is also notable in the materials handling industry, where piece picking robots represent the next frontier. In Rochester, New York, startup firm Iam Robotics and Rochester Drug Cooperative are testing a new piece picking robot that, if commercialized, could be a harbinger of things to come. In this third of three blogs, I talk to Larry Doud, CEO of Rochester Drug Cooperative, about why he is interested in becoming an early adopter. Click on the link to read Part I and Part II.

“The technology is here. We just need people to step up and adopt it.” 

So says Tom Galluzzo, CEO of Iam Robotics, a Pittsburgh-based startup developing autonomous piece picking robots for distribution centers.

Larry Doud, CEO of Rochester Drug Cooperative, could be one of those early adopters. Founded in 1905, the cooperative describes itself as “a marriage of a traditional drug distribution company, a buying cooperative, and a private long-term investment structure formed for the sole benefit of pharmacist-entrepreneurs.” With over $1 billion a year in sales, RDC provides pharmaceuticals, health and beauty care products and home health care supplies to over 900 community retail pharmacies, long-term care pharmacies, and home health care stores in the Northeast. It currently ranks as the 8th largest full-line distributor in the US.

It is a competitive business where the big are getting bigger, says Doud. “There are not many full line health distribution companies left and our top three competitors control about 80 percent of the market,” Doud says. “We turn our inventory every 13 or 14 days and we have to run our business very efficiently.”

At present, RDC operates just one 55,000 square foot distribution center in Rochester; while light on automation, the facility does feature voice-directed picking technology augmented by ring scanning for accuracy, and a conveyor and sortation system.

Fast-moving items are picked from flow racks on the floor level, while slow-moving SKUs are picked from a 19,000 square foot mezzanine with about 200 aisles. A second facility is under construction in Fairfield, New Jersey, with a materials handling design from Schaefer Systems that will feature A frame dispensers, carousels and conveyor.

Doud first heard about Iam Robotics from a family friend – Galluzzo’s father. He was intrigued for two reasons. The first is accuracy. Despite using ring scanners to confirm voice picks, RDC still has errors. “One of our competitors had a reputation as being difficult to deal with but the best pick, pack and ship distributor in the business,” Doud says. “We’re easy to do business with and I’ve had the desire to also have a reputation for being the best at picking, packing and shipping.” He believes the discipline of automation can deliver the accuracy he’s looking for and result in a real competitive advantage.

More importantly, much of the work in the slow-moving mezzanine is done on an afternoon shift that runs from 5:30 PM until 2:30 AM. “The turnover on the night shift is significant,” Doud says. “Too often, we have people who are scheduled to work and don’t show up or go out for a meal and don’t come back.” Robots, on the other hand, don’t care what time it is. Based on the results of the pilot, Doud estimates he could handle all of his throughput requirements with four robots. “If the solution delivers, I think our accuracy and speed can be improved and we can solve the turnover problem on the second shift,” Doud says. “That’s a major win.”

There’s one other major advantage to the solution piloted at the facility: While Iam Robotic’s machine is not designed to work side-by-side with people, it is designed to work in existing aisles and requires no modifications to infrastructure. It’s easy to swap out associates and swap in a robot. 

In fact, that’s pretty much what Iam Robotics was able to do in the pilot. The robot was shipped in the middle of the snowstorm that shut down Buffalo last fall, which meant rerouting the truck after it got stuck. Galluzzo and his colleagues came separately with the scanner. They uncrated the robot on a Thursday, set up the scanner and began scanning in a set of SKUs chosen for the test in one aisle. Rather than integrate with RDC’s WMS, Iam Robotics ran a dummy WMS. By mid-day on Friday, the robot was moving up and down the aisle, identifying items it had never seen before, and picking from the rack to a tote. You can watch a YouTube video of the robot in action here.

Galluzzo describes the test as a proof of concept. The robot picked from about 40 items and operated at about 40% speed. “The robot is still missing some features for a go-to market product, but it did what it was designed to do in a warehouse,” he says. “This proved it in our minds.”

The next step is a pilot with a third party logistics company. In this next one, the robotic software will integrate with the 3PLs WMS. From there, Iam Robotics will look to commercialize the product. The design uses off the shelf components to reduce costs with proprietary software to guide the robot as it travels and picks. Iam Robotics is working on a robot that can change aisles; the team is also exploring the ability to pick to a cart.

For his part, Doud is waiting for the next step. “After seeing the robot moving up and down our aisles picking product, I’m excited about the technology,” he says. “I think it’ll be 2016 before the technology is commercially ready, but we’re looking forward to it. I want to have that reputation as the pick, pack and ship leader and I think this can get us there. ”

The robots are coming – Part I
The robots are coming, Part II