Consultants in Logistics

Automation in the Supply Chain

The robotics article in the previous issue of Logistics Update was one of many technology related articles to be found in the logistics and general press recently. Supply chain technology covers a broad range of applications: order picking, final mile delivery, autonomous lorries, driverless cars, systems integration. Most of these affect labour intense parts of logistics.

The drivers who use these technologies can be grouped in three areas and are supported by a number of catalysts.

Demand

  • Customer expectations are changing in terms of order lead times, minimum order quantities and timed services.
  • Retailers passing fulfilment onto their suppliers.  For example a supplier will dropship products to an end user on behalf of the seller. As a result wholesale operations need to adapt to retail order profiles, moving from B2B to B2C or a mixture of both.
  • Recruitment of HGV drivers and warehouse operators is increasingly challenging.
  • The changing demand patterns affect resource requirements by day and hour. For example, online retail demand peaks over the weekend, requiring Sunday and night shifts to fulfil the orders, which is at odds with the more cost effective patterns of weekday daytime shifts. Automation can provide more flexible capacity at a fixed cost.
  • The traditional daily order cycle of most logistics operations is increasingly replaced by more frequent, or even continuous, cycles due to the introduction of multiple service offerings such as same day and evening deliveries.
  • These changes in demand patterns encourage logisticians to rethink how their processes are performed.

Technology

  • Reduced costs and increased performance of technology has been ongoing for decades and is continuing.
  • A more recent development is the use of autonomous equipment, such as material handling equipment, robots and at an experimental stage - road going vehicles. This allows machines to operate independently in a mixed user environment, requiring less control by humans.
  • Many components that enable autonomy are commonplace in modern vehicles such as radar based distance control, lane control and collision avoidance.
  • Autonomous machines interact with each other to avoid collisions and are managed by control systems to optimise traffic flows and task allocation.
  • Modern production technology including 3D printing has led to reduced product development lead times and allows for more efficient production of smaller batches.  As a result the technology life cycle is reducing in length.

Integration

  • The internet of things; the networked interaction between devices allows for data to be collected and used in different ways. For example, sensors on racking can be linked to a mobile phone app to immediately notify warehouse managers of significant impacts and potential structural damage - avoiding the need for periodical manual checks to detect damage. Technology enables management by exception rather than continues monitoring of all information.
  • Websites or apps can create a market place by connecting users with providers of resources, using a common browser or mobile application.  Well known consumer examples include Uber and Airbnb.
  • The above matches supply and demand without the need for bespoke software or systems integration.

Catalysts

  • Game changers have challenged existing markets and even helped to create new ones e.g. Amazon in book retail, and Tesla in electric cars.
  • Technology crosses and blurs sector boundaries.  Using its technical expertise and geographic data, Google is a major proponent of self-driving cars, rather than the major automotive companies as may have been expected.
  • The distribution of power in the supply chain changes through vertical integration.  Amazon has set up its own parcel delivery service.  Lorry manufacturers offer combined chassis and bodyworks, hire, finance, fleet management and driver training.  The major MHE manufacturers follow a similar pattern.
  • One traditional obstacle to automation is the capital investment required.  Software as a Service (SaaS) and Manufacturing as a Service (MaaS) are examples of “servitisation” where software and equipment are offered on a pay per use basis.  Thus providing users access to resources and the flexibility to adapt to changing needs without the long term financial commitment.  The financial risk transfers to the supplier, but at increased margins.  Third party logistics is in effect a well established example of this trend.
  • Despite the recent political tendency to put individual nations first, globalisation of products and services increases both market places and the number of potential competitors.  Automation is an enabler to offer flexibility in capacity and to manage demands across multiple time zones.

The futuristic world portrayed in many articles may appear too big a change from our current operations.  Organisations are unlikely to risk a wholesale change, but available technology should challenge the way we use and design future operations.

Subtle differences in technology can have a major impact.  For example, vertical carousel systems have typically been used to store and pick slow moving items.  Retrieval rates can be low when an operator operates a single machine and waits for the required product to be retrieved. 

The visually similar vertical lift system only retrieves the relevant shelf using a fast-moving lift mechanism.  Thanks to the advanced control system the next shelf is retrieved and buffered whilst the operator picks the first item.  As a result the vertical lift has proven to be very productive way to pick fast moving products, especially when combined with pick to light and batch order picking.

Both the carousel and lift systems apply the goods to man principle, quoted as key benefit of robotic pick operations.

Conclusions

Major changes are taking place in demand, technology and integration. A number of catalysts drive these changes in the supply chain.

These developments bring challenges to meet increased customer demands and resourcing issues. They also offer opportunities to reassess the way we currently operate and explore new opportunities.

To quote one of the major Indian robotics providers:  "Ten years ago, every person did not have a computer, today every person has one computer. We look at robots in that sense: as everyone has one computer, in the future they will have one robot with them to help them do their work better.” Mr Kohli cofounder of GreyOrange.

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