Pictured: Artist’s stereoscopic impression of robotic workers. Of course, Cohisio robots don’t look like that. It is small and block-like and can fit under a range of moving products. Graphic: By Shutterstock.
Körber Logistics, the investment and logistics arm of technology conglomerate Körber in Hamburg, Germany, has acquired a majority stake in consulting firm Cohesio, which specializes in installing autonomous logistics robots for warehouses.
FreightWaves asked Nishan Wegemann, CEO of Cohesio, and Chad Collins, CEO of Körber Logistics Software, about the acquisition. Unfortunately, neither of them revealed the price paid nor the size of the stake acquired.
Cohesio, based in Melbourne, Australia, is targeting the North American and Asia-Pacific markets with “autonomous mobile robots,” which will be deployed in warehouses and distribution systems.
Goods to person
Wijemanne explained that Cohesio is targeting the goods-to-people segment.
There is a huge inefficiency in storage and this is the problem of finding products and goods on the shelf.
The picker then has to take it off the shelf and then return it to an appropriate person or place, such as a consignor in a fixed office.
The time-consuming and expensive solution until now has been to employ humans to walk up and down the aisles in warehouses to find the product and bring it to the dispatch office.
Wijemanne explained to FreightWaves how Cohesio is targeting this space.
“You’ve seen robot vacuum cleaners, right? Well, they look like this. The robot goes under the fixed shelves and picks up the entire shelf. It brings the product to the operator, who takes the packaging and the shelf is removed,” Wegemann said.
Amazon and Kiva systems
If this sounds familiar, it’s likely because online retail giant Amazon adopted what appears to be a very similar system several years ago.
Amazon bought Kiva Systems for a significant sum of money, reportedly in the region of $775 million in 2012. Taking into account inflation between 2012 and 2019, $775 million is worth about $866 million now.
According to Weegmann, Kiva originally planned to move its robots and systems into the distribution center market; However, it appears that the internet giant has rebranded Kiva as Amazon Robotics and kept the technology for itself.
This has created a gap in the market for companies like Cohesio. There are a lot of companies in this field.
Counseling and understanding are essential
Cohesio’s strength lies not so much in the nature of the technology, but in the understanding, advice and support it can provide to its customers, Wegemann said.
“Robots are robots. It’s really about workflow and understanding the customer’s business. We design workflow optimization, like how to place shelves. Consultation and discovery are key,” Wegemann said, adding that customers can’t just call in and install the system.
“We go through discovery with clients. We need to understand the client and the challenges. We have a number of consultants on the team who can go through this process.
Although robots replace humans in the task of finding a product and bringing it to a distribution office, for example, Wegemann noted, humans do not lose their jobs when a Cohesio system is installed.
Don’t waste jobs
“No one really loses their job. On the contrary, we help people improve their skills to work with automation and we develop a high-value proposition.
He gave the example of fast-moving luxury consumer goods, such as handbags. Pickers stop wandering the warehouse aisles and, instead, are hired to spend time adding value with more touches to the finished product like extra luxury packaging or spritzing a handbag with fragrance.
The added value, Wegemann explained, is that it helps online retailers make delivering and opening a package an “experience” that an online consumer might miss out on when compared to an in-store shopper.
Autonomous robots
Robots are autonomous. Cohesio fences off a designated space for safety purposes and the robots roam that space on their own. They use QR codes to help with navigation. They also have an array of sensors, which means they can detect other robots and people in front of them and will stop if necessary.
The batteries are also programmed to operate at between 100% and 80% of their power reserves, and when they reach the operating point, “they will go and charge themselves,” Wegemann said, adding that the company will perform preventative and regular maintenance as part of the service contract.
There are cost benefits from robots doing work that would otherwise be done by humans. Not having to pay wages is an obvious benefit, as is the fact that robots will pick larger quantities of product faster and more accurately.
Scalable and portable
There are other savings too. Because the Cohesio system is flexible, mobile and modular, it is relatively quick and easy to install – as well as dismantle. If a company needs to move, the Cohesio system can be packed up and trucked to its new home. It is also scalable.
There is also the potential to save distribution center space and associated logistics costs, such as trucking. Wegemann said he is aware of one system in the Philippines that is spread across three levels.
“Distribution centers tend to be far from CBDs (central business districts) and some customers are talking about putting them in stores,” he told FreightWaves.
There is an artificial intelligence component and the system generates data for business intelligence analysis purposes. Cohesio also helps connect data systems.
“There’s more to it than just shipping more products more quickly,” Wegemann said, adding that the optimal benefits depend on why a customer is using the technology.
Costs and pricing
Determining comparative pricing is difficult because exact prices will vary depending on a wide range of factors, such as customer productivity.
Wijemanne gave a rough example that if a fixed system (conveyors, racks mounted on floors, walls, etc.) would cost, say, $20 million, a Cohesio system could be installed for $1 million to $5 million.
“It’s a completely different value proposition,” Wegemann told FreightWaves.
Market by market
Sectors targeted by Cohesio include retail and e-commerce. Third-party logistics operators are also “joining in,” Wegemann added.
Geographically, the US and Europe were the largest markets, but Wegemann said the company was seeing a lot of interest in Australia, New Zealand and Southeast Asia.
“There’s a lot of technology going to Thailand even though labor costs are cheap. Sometimes low labor costs mean (management) tries to throw people at them, but that’s not always the best solution,” Wegemann said.
Labor is a major stressor in the distribution and supply chain
Collins, CEO of Körber Logistics Software, explained to FreightWaves the appeal of the Cohesio system.
“The big pressure we’re seeing is labor in the distribution center and supply chain. Labor costs are increasing around the world. Fewer people are willing to do that work. Companies are looking to do more with software or mechanical solutions,” he said.
He noted that companies can literally pay hundreds of millions of dollars to install a fixed system, while robots are cheaper, more flexible, and reduce costs. He added that robots may work in parallel with fixed, capital-intensive systems, but they replace humans during the peak season of labor demand.
Looking to the future, Collins sees “tremendous growth” for logistics robots in e-commerce and Asia.
Collins said Asia has “very congested” cities and there is a need for fast last-mile deliveries, which will boost demand for logistics solutions that can take place in central business districts.
Meanwhile, in the US the focus on markets has been done manually. However, he said, “Robots will be a way to go mechanical.”
