By Peter Johansson, Managing Director at Tellus Systems Limited
In the manufacturing world, Thailand has traditionally relied on labour. The low costs and surplus of labourers have driven this trend into the modern age. But times are changing. And in 2018 and beyond, more and more companies are likely to consider a more futuristic approach to the storage and distribution of goods.
Quietly, outside of the public eye, a revolution is happening in the manufacturing industry. Warehouses that were once staffed with dozens, or even hundreds, of human labourers are disappearing. In their place are fully automated facilities where not a single human voice or footstep is heard. But why is this? And how is this automation revolution helping Thai manufacturers operate more efficiently?
The age of e-commerce
A quick look around the BTS, a Bangkok food court or shopping mall, and you’ll notice a common theme: everyone is glued to their mobile. Today an estimated 70% of the Thai population has access to the internet. The digital world is booming in Thailand. And as such, e-commerce has become increasing popular.
The Thai population is now realising the joys of ordering products online. Instead of wasting hours commuting through traffic to purchase a product at a store, it can all be done at the comfort of your home with a few clicks of a button. While this new world of e-commerce is convenient for shoppers, it’s been a challenge for retailers. Traditionally retailers received a small amount of large orders to stock store shelves. Now, they receive a large amounts of small orders, oftentimes of just a single item. To adapt to this change, they need to operate faster and more efficiently than ever before.
Thailand’s dawn of fully automated warehouses
With e-commerce growing year-on-year, Thailand retailers are now forced to adjust rapidly. They’re now becoming familiar with new technologies—such as pick directed systems, AGVs (automated guided vehicle), Cloud Connect, and automated conveyor and sorting systems, to mention a few. A quick tour around some of Thailand’s most advanced warehouses and factories reveal facilities empty of human staff. Instead, these “smart warehouses/factories” are outfitted with an advanced system of cranes, conveyors and robots (AGVs) carrying pallets of goods around the facility.
Some people are uneasy about replacing people with automated systems. But from the perspective of a Thailand warehouse operator, the gains are well worth the investment. While the old model of traditional labourers is cheap, it isn’t efficient. Automated systems can reliably operate 24/7, with uncanny accuracy and speed—picking, packing and sending orders to customers. They can work in less desirable environments, such as cold stores at -25 degrees, or facilities that store dangerous goods. What’s more, automated systems utilise space more efficiently, thus storing more products in a smaller area. All these benefits help the manufacturer be more cost efficient and competitive.
We strongly believe that in 2018 (and beyond) the Thai retail and manufacturing industry will become more competitive and thus rely more heavily on automation. The government also supports this movement, as automation is in line with the Thailand 4.0 strategy.
While traditional warehouses will always be an option, the way of the future likely belongs to the automatons. Just like Netflix replaced video stores, smartphones replaced flip phones and keyboards replaced typewriters, people chose the new solution because it performed better. The future of storage and warehouses will be for the same reason.