10/03/2022

Logistics automation: the end of the traditional warehouse?

No to standardization, yes to tailor-made!

For manufacturers, the time has come for automation. But adding a few machines to the warehouses does not guarantee success.

Faced with the rise of e-commerce, the logistics sector needs to adapt: flexibility has become a priority. Many companies, startups or large groups have invested in new technologies to meet this demand, with the same question: how to automate warehouses efficiently? How can you be sure to rely on the right facilities? ROI constraints or short deadlines often require a tailor-made design.

Do you want to adapt your warehousing and order tracking solutions to your business?

Why automation is required for e-commerce and manufacturers

From an external point of view, the warehouses have hardly changed in recent years. But on the inside, the picture is quite different: they have continued to evolve. To meet new needs in terms of flexibility, they have been modernized and automated. If pallets, racks and forklifts still have their place and retain a certain value, these traditional systems are now adjacent to connected sensors, artificial intelligence or robots.

The strong growth of e-commerce has largely influenced this trend. In the first quarter of 2021 alone, online sales reached $ 876 billion worldwide, up 38% from the previous year.

In some countries like France, nearly one in six tangible goods is now purchased online, and slowdown is not in sight. In the United Kingdom, Japan and the United States, studies show that a growing number of consumers prefer online shopping, including for their groceries.

The outcome is that warehouse managers sometimes need to develop new solutions and completely overhaul their organization in 7 to 12 months... or even in less than 3 months in exceptional circumstances.

In an industrial context, too, there is a need to better control the logistics workflows. Other objectives include reducing the number of errors, better inventory control or simply increasing productivity.

Automation is one of the preferred solutions to meet these new needs. It is even more popular as it also helps manufacturers gain productivity, helps them respond to HR issues such as difficult recruitment, or reduce the level of hardship of employees by supporting them on the most repetitive or difficult tasks such as goods packaging. Faced with the massive growth of orders, it also makes it possible to optimize and limit storage volumes.

What is warehouse automation?

Warehouse automation covers a wide range of applications, from order processing, which it makes faster, to transportation, storage, which can increase capacity, and shipping of goods. It also concerns workstations, by improving their safety or ergonomics.

Companies in the sector have understood this well: startups and large groups have invested in research and new technologies. New solutions are constantly emerging (robots, conveyors, Warehouse Management System software, etc.).

Data management is among the most popular IT solutions. Collected in real time using sensors installed throughout the logistics chain, live data enables manufacturers to be particularly responsive. Combined with artificial intelligence systems, it becomes even more useful: algorithms are used to better manage the warehouse and its variables on a daily basis.

Poor forecasting of warehouse inventory can have serious consequences. It has an impact on the company's income in the short term, but it also weakens the bond of trust established with consumers in the longer term. Thanks to new technologies, it is possible to better anticipate peaks in orders, for example at the approach of major commercial events (Black Friday, end of year celebrations, etc.). Any anomalies are identified faster, and therefore corrected faster as well.

On the robotics side, several noteworthy inventions have also emerged. AMR (Autonomous Mobile Robot) and AIV (Autonomous Intelligent Vehicle) are among them. The AMR market is booming: according to a report published by Allied Market Research, it could grow from $ 5.21 billion in 2019 to $ 13.52 billion in 2027.

"Autonomous mobile robots have definite advantages, allowing rapid deployment procedures, for instance. Conversely, we implement more complex systems whose study and installation times require many years. For us third party logicstics, this sometimes makes the project complicated, within the deadlines requested by our customers. You need to find the perfect mix using the available solutions according to the specificities of each one."

Antoine PRETIN, Director of engineering for GEODIS group

Tailor-made for each customer, for a successful automation

Good automation is above all tailor-made automation, which adapts to the specific needs, industry and finances of each client. The setup time, but also the type of machines or the space needed to install them will vary depending on these criteria.

In the e-commerce sector, the deadlines are shortening: setup time is less than a year, and the projects have a rapid ROI. The devices must be adapted to the workflows which can be variable and very sustained at certain periods of the year.

In the industry, lead times can be up to 10 years. The machines will be more complex: stacker cranes for pallets, mini loads, etc.

Beyond that and as stated earlier, tailor-made automation also makes it possible to respond to specific HR challenges. In some companies, it is difficult to recruit enough staff, or to ensure that everyone has a suitable workstation, or enough space to move around or park. While humans retain an essential place in warehouses, a few technical adjustments can help to mitigate these effects.

Corporate social responsibility aspects are also considered: a tailor-made approach is also a guarantee, for example, of optimization of packaging volumes or the filling rate of trucks.

"We devise a new system every month, and it is not easy to navigate as a logistician", explains Antoine Pretin.

For Antoine Pretin, responsible for developing the mechanization offer for GEODIS customers, the integration of new technologies and robots in a warehouse must be carried out in a supervised manner.

"At GEODIS, we support our customers in defining their needs until the adequate solutions are implemented. We have a strong belief in tailor-made solutions: even once the project is completed, we must be able to adapt it if and when the needs evolve. Our customers do not have a flat 10-year evolution, and the system must adapt at all times."

Antoine PRETIN, Director of engineering for GEODIS group

This finding does not necessarily mean the end of the traditional warehouse, which is usually poorly automated, quite the contrary: when a project for a client requires only a few months setup, the traditional warehouse with racks, pallets and teams will be the more effective in responding to a sudden increase in demand, which cannot wait for the implementation of more complex solutions.

It becomes obvious that logistics are not as standardized as they were ten or fifteen years ago. Now is the time for adaptability, which requires first and foremost defining the right degree of automation. To reach your company’s goals in terms of finances and ROI, it is better not to go blind in the modernization of your warehouses and to call on an expert company with experience in this field...

Do you have a project to adapt your logistics warehouse? We can study your needs together and define a tailor-made solution.

Philippe de Carné

Managing Director Business Development, Innovation & Business Excellence at GEODIS

Philippe de Carné began his career in the food industry (R&D and industrial management) then joined the world of consulting where he led projects for the implementation of information systems, improvement of operational performance and transformation of organizations. He joined GEODIS in 2010 as HR Director of the Road Transport business. Since 2018, he has been Director of Innovation & Business Excellence and took the responsibility of Business Development and Marketing.

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