This post comes to us from Adam Robinson of Cerasis, a top freight logistics company and truckload freight broker.
Imagine a world where automation comes together with technology to deliver products without human intervention. An order is placed by a consumer. 3-D printers pick up the details and print the finished product. It’s then picked by robots from the shelves, packaged and placed into a self-driving truck. The trucks leave the facility, and drones are automatically dispatched from the truck to deliver products while moving. The truck never stops until arriving for reloading.
This example generates a huge amount of data that can leverage in the supply chain. But, the same data can have a drastic impact on transportation planners and agencies around the globe. While this example may still be a few years off, it is important that you understand how the top emerging trends in automation will shape supply chains and transportation processes in the coming years.
The Standard Definition & Components of Automation
Today: There is a standard definition of automation in the supply chain. Anything that can be handled via today’s computer systems can be automated. This includes billing, generation of bills of lading, compliance reports, and even movements throughout a factory or warehouse floor.
Historically, automation has been applied to virtual processes, like order auditing or customer service reports. However, the trends in automation are changing to reflect actions that function more like artificial intelligence, not just a search and locate program on the computer.
Additive Manufacturing
What is it?
Additive manufacturing includes all actions in the supply chain that can enhance existing factory production, if not replace it entirely. Additive manufacturing may be handled manually, but automating this process is as simple as turning on the power and connecting to the Internet of Things (IoT).
For example, additive manufacturing might involve the use of 3-D printers to create replacement parts at the store for consumers.
Today’s status: Unfortunately, the capacity of 3-D printers remains in infancy, capable of only producing simplified parts out of liquid polymers.
Virtual Reality Comes to the Forefront.
Meanwhile, Google Glass and other virtual reality tech are changing how customers complete their orders. In addition, the same technology can be overlaid with augmented reality to give repair technicians and individuals greater resource access when making repairs, checking order contents and fulfilling orders.
For example, augmented reality glasses will soon detect package dimensions and classify the package according to dimensional pricing models.
Today’s Status: Today, this technology is limited to automated identification and data capture (AIDC) applications. Advancements in virtual reality over the past year indicate its future might be much closer than “meets the eye.”
Additive manufacturing will gradually move products from warehouses and distribution centers to be closer to end-users. As a result, the amount of last-mile traffic may increase.
Robotics Enhance Inbound and Outbound Logistics for Shippers.
Another trend in automation involves robotics. By definition, robotics are the icons of automation. They perform functions at the request of a system or person, but more of today’s robotic systems are performing duties upon request from an order fulfillment system.
The order process automatically notifies robots in warehouses and triggers the flow of processes as seen in the opening example.
Robotics Improve Inbound and Outbound Logistics.
Robotics are not isolated to warehouse pulling for outbound logistics. They can be used to manage inbound and outbound processes and strategy. Through trends in automation and robotics, supply chain companies will have the tools and resources necessary to ramp up throughput and decrease product cycle from order to delivery. Therefore, more trucks and drivers will be needed, but the looming driver shortage and capacity crunch will trigger another automation trend.
Autonomous Vehicles/ Trucks
Automation begets automation. With advances in technology and the IoT, most major companies, including Uber, Facebook, Google, and Amazon, have launched autonomous vehicle and truck pilot programs.
These driverless vehicle programs will give supply chains access to a new inexhaustible resource for moving products, overcoming the challenges inherent in the driver shortage and capacity crunch.
The driver shortage and capacity crunch are likely to come to a head in 2017, as consumers demand more product, at lower costs and faster than ever before.
Some setbacks have occurred, like the first self-driving car wreck earlier this year. With each setback and challenge, companies have pushed back to overcome the obstacles.
In response to increased interest in driverless vehicles and trucks, the National Transportation Safety Board (NTSB) has issued recommendations and created an advisory panel to review ongoing driverless vehicle advancements and maintain public safety.
Transporters and supply chains will respond to this direction by leveraging the trends in automation and power of data to ensure compliance with increased government oversight, through the agencies you represent.
Companies have already tested cross-country driverless trucks, albeit with a person ready in the cab to take over in the event of a system failure. However, the wide-scale deployment of this level of driverless trucks is far from implementation.
In the interim, more automated vehicle systems will work in tandem with drivers to enhance safety and maintain vehicle control. Similar systems are already deployed in crash and pedestrian detection systems, automated braking and tracking control in today’s vehicles. It is not difficult to apply today’s technology and automated features to the fleets and drivers of 2017.
Trends in Automation: Whats the Potential?
The potential applications of this type of technology can include real-time traffic condition monitoring and warnings, redirecting traffic before pile-ups and accidents occur, similar to Google Maps’ capacity to show traffic congestion in real-time.
Data through such systems can automatically feed back into transportation planners’ systems to automatically change signal phase and timing and enable immediate rerouting or adjustment of traffic flow on a broader scale.
Our series by MBA students and graduates at Peter T. Paul College of Business and Economics highlights some of the most pressing issues in supply chain management today.
A few years ago, the Wall Street Journal called supply chain management the “hot new MBA.” Many universities have been introducing related degree programs, majors, and concentrations in response to a growing demand for new hires with supply chain expertise. Graduates of these programs are heavily recruited by employers, which is helping to attract ambitious, young talent to the industry.
Fronetics had the opportunity to collaborate with some of these rising stars by inviting MBA students from the University of New Hampshire Peter T. Paul College of Business and Economics to author guest posts on our blog. They covered a variety of pertinent topics, from the Internet of Things and Big Data to pet food and Chipotle. Their pieces are summarized below.
In the coming weeks, we’ll be partnering with another MBA class at UNH to author a second series of posts covering some of the most pressing issues in supply chain management today. Make sure you receive our blog e-newsletter (sign up to the right) or follow us on social media so that you don’t miss out.
Steve Mondazzi writes about how the Internet of Things is now being used to improve factory workflow, increase material tracking, and optimize distribution to maximize revenues. Everything from turning lights on and off to security systems can be controlled from your smartphone, and that technology is moving to the manufacturing industry. Mondazzi examines Mark Morely’s theory that the IoT will impact the industry in three main ways: pervasive visibility, proactive replenishment, and predictive maintenance. He also explores hurdles to implementation — such middleware and a common protocol for businesses regarding IoT. Read article
Mikayla Cadoret focuses on the barriers to entry in the pet food industry. New brands have three options: manufacture product themselves, choose a co-packer who uses a private label, or choose a co-packer who will manufacture the food to the specifications of the brand. She discusses the challenges of those choices as well as high-profiles recalls resulting from co-packer error. She recommends strategies that companies implement to keep tabs on co-packers’ sourcing and manufacturing. Read article
Nicole Brooks explores Amazon’s mission to be earth’s most consumer-centric company. The e-commerce giant not only offers low prices, it also exceeds consumer expectations and shifts industry standards with benefits like same-day shipping. Brooks examines Amazon’s biggest technological assets, and looks forward to up-and-coming innovations like Kiva robots in warehouses, drones, Prime Air, and Amazon Business. Read article
Corey Ducharme discusses the traditional four-step problem-solving method and how it isn’t effective in solving needle-in-a-haystack issues resulting from limited business resources. Six sigma can address these issue with its six-step process. With the addition of an analysis phase, solutions become more effective, leading to better results and higher revenue for businesses. Read article
David Chadwick explores whether advances in radio-frequency-identification technology (RFID) will render humans obsolete in the supply chain. RFID could dramatically improve efficiency and accuracy in warehouses by reducing the need for human interaction. But it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. Read article
Dario Cavegn discusses how increasing size and complexity of global supply chains open them up to increased risk. Supply chain disruptions can vary from insignificant to extremely threatening. But regardless of disruption size, supply chains can remain resilient with a business continuity plan, which acts as a road map to continue operations during or after a disruption. Cavegn outlines the development process from analysis to feedback. Read article
Josh Hutchins explores the limitations of big data. The real value lies in the analytics applied to the data. As an example, Solid Gold Bomb drove its prospering t-shirt business into the ground from an oversight and misapplication of data. Hutchins concludes that companies must have an intimate understanding of big data applications to avoid a similar fate. Read article
Michael Hickey discusses third-party logistics providers as a resource for a company’s operations arm. 3PLs offer an outsourcing opportunity for order fulfillment, inventory and warehouse management, as well as transportation of finished goods. But businesses should ask themselves these questions when determining whether a 3PL is a good fit for their needs. Read article
Sarah Hebert discusses Chipotle’s high-profile pork-supplier conundrum. The chain cut their pork supply by a third due to a supplier’s violation of their animal welfare standards. While this affected sales by 7-8%, Chipotle embraced the situation as a strategic PR opportunity. But behind the scenes, the company was scrambling to address long-term supply concerns associated with its rapid growth. Hebert asks, “At what point do you scale back the growth for the sake of maintaining brand integrity?” Read article
Connor Harrison discusses GM’s recall of 2.6 million vehicles. The company’s faulty ignition switches were linked to 13 deaths and 31 front-end collisions, but the company managed to contain the crisis. Harrison examines the root causes of the issue, including faulty ignition switches from GM’s supplier Delphi, a strained business relationship, and legal complications. Read article
Having a modern, flexible supply chain is important to finding the way out of inventory dilemmas.
Imagine your irritation when you try to place an order online and are greeted by the message: “We apologize for the inconvenience, but this item is out of stock.”
However, even if the item is in stock, your mood is likely to sour if delivery will take more than a few days — and, even worse, you also have to pay for shipping. If you’re anything like me, you will quickly find an equivalent product that’s available immediately and ready to be shipped that same day.
It’s in the light of this hyper-competitive environment that the current inventory crisis should be seen. To sum it up from the perspective of warehouse owners: these are good times. Warehouse rents are hitting new highs as vacancy rates sit below five percent in many major cities.
From the viewpoint of retailers, on the other hand, it’s a significant challenge. Excess inventory is building even as consumer demand remains relatively high. Well aware of the consequences of not meeting ever-rising consumer expectations, retailers have felt compelled to stock up to — at all costs — avoid that irritating “out-of-stock” disclaimer. On the other hand, a chock-full warehouse is not necessarily good for business or speedy fulfillment.
Modernity and flexibility are key
This is when the importance of having a modern, flexible supply chain really comes into play:
How quickly can the supply chain adjust to changes in demand?
What’s the visibility up and down the supply chain?
How aware is each link of what others are doing?
How fast can inventory be refocused?
Some companies like Nordstrom have invested in cloud-based supply chain services. In Nordstrom’s case, the acquisition of a minority stake in DS Co., a supply chain software firm, which links inventory management between retailers and suppliers, was designed to facilitate direct shipments from vendors to customers, thereby circumventing the need for more inventory space. When suppliers and retailers track the inventory of one another, the risk of out-of-stock disappointments is reduced and risk is shifted up the supply chain.
Put to practice, it means that an order placed on the luxury retailer’s website is routed to the manufacturer, which then ships the item directly from its warehouse to the buyer. The Wall Street Journal noted Nordstrom’s investment comes “as retailers are racing to compete with e-commerce companies such as Amazon.com Inc. to provide convenience and speedy delivery to customers while keeping costs down.”
J.C. Penney is also shifting gears to avoid inventory gluts. The new business model essentially turns part of the store into a showroom for one of its suppliers, Ashley Furniture. Instead of keeping inventory in store or in distribution centers, all orders will be shipped straight to the consumer from Ashley Furniture.
Drones are not surprisingly part of solving the inventory dilemma. Walmart, for example, is testing the use of drones to catalog inventory, finishing in one day what it takes employees a whole month to get done. The intent is partly to make the giant retailer’s supply chain more efficient.
Clearly, traditional retailers are exploring new territory to meet consumer demand.
What do you think is key to solving the inventory crisis?
Supply chain leaders must be ready to implement big data in order to continuously improve.
This guest post comes to us from Adam Robinson, director of marketing for Cerasis, a top freight logistics company and truckload freight broker.
Supply chain leaders are enthralled with the idea of using big data, but they tend to fail to understand how to disseminate big data in their organization properly. True, they may know how to roll out big data in a single warehouse, or they may have heard their competitors used branded systems for implementing this new technology. However, the fundamental problem remains.
Supply chain leaders must be ready to implement big data and leverage it to improve their companies without any delay or inhibition. This may sound impossible and frightening, but they must only understand how big data always goes back to these two, simple principles of measurement: review and action.
Ask traditional questions, and let big data provide answers.
The most common complaint of newer companies using big data analytics capabilities tends to revolve around traditional questions of business strategy. Consider the following elements explains John Richardson of Inbound Logistics, that impact business strategy.
Increasing order efficiency.
Demand forecasts.
The quantity of each product.
Inventory location and management.
Raw material suppliers and logistics.
Transportation modes used in procurement and shipping.
Distribution of goods prior to purchase.
Demand fluctuations.
Each of these elements more traditionally handles by outsourcing analysis of processes to supply chain consultant. This is actually where the concept of third-party logistics providers involved. However, rapid growth and diversification of products are making shippers, manufacturers, and suppliers rethink their business strategy. In other words, consumers can get practically anything they want at a moment’s notice, and more consumers are expressing a willingness to wait for a product a few days if free shipping is a possibility. So, this need to adapt operations reflects the common concerns of traditional customers and supply chain entities. However, there is a distinction.
Previously, these entities only needed to focus on their local demographic for ensuring continued stability. But the rise of the internet has given consumers and everyone else the ability to access any product from any seller and any place on the globe. This is a traditional business strategy, and it is essential that the modern supply chain is willing to use big data all operations to create a more positive result than consumers, stakeholders or government organization ever needed before.
Performance measurement and management.
As explained in a previous blog post, continuous improvement in an organization can be achieved through the use of performance measurement tools via big data. Mostly, this reflects the skills and actual working capacity of employees. Since employees represent one of the largest expenses an organization may face.
Having the best staff members available can mean the difference between success or failure in a company. Furthermore, big data can help employees understand what they do and do not need to do in order to improve their performance scores. This will also help to prevent oversight from managers and keep all employees on track to complete their responsibilities as assigned.
Performance measurement does not have to be limited to the performance of employees either. It can be expanded to identify poorly performing machines, or it can be used to isolate inefficiencies in collaboration with suppliers or vendors. Ultimately, performance measurement is a metaphor for tracking any metric in the course of the supply chain, but it’s key to being effective is found in transferring the insights gleaned from big data into actionable results.
For example the operational efficiency of a given loading is directly related to how quickly pickers are able to fulfill orders and move them onto the dock. Obviously trucks can only be loaded so fast; what is the number of pickers appropriate for the current workload, or which route through the factory is adding an extra 20 minutes to each worker’s duties?
These questions illustrate that the most insignificant details can be driving forces of inefficiency in the supply chain. But they represent opportunities for continuous improvement. Changes in the design or layout of the warehouse or alterations to the truck schedule may require changing the duties of a certain worker at a moment’s notice. Essentially, the worker must be able to access continuous data measurements on all factors affecting his or her responsibilities.
Supply chain leaders need to focus on continuous improvement.
Continuous improvement is a complex notion. It is based on hundreds, if not hundreds of thousands, of individual metrics from various collection points and analyzed in real time. All of this reflects a very large volume of data. It can be digested and broken down into usable bits, much like the biological processes of the stomach making it essential to surviving the coming season.
This comparison is much more than a metaphor; it is the real issue being faced by supply chain entities and their leaders. Supply chain leaders must use big data to gather insight and create quantifiable measures of performance and functionality across their enterprises on a recurring, frequent and immediate basis.
The evolution of driverless robotic vehicles continues unabated. But what will it take for them to overtake certain warehouse tasks?
A lucky few have already experienced it — the thrill of taking their hands off the steering wheel and letting the car take care of the driving. As a reporter from the Guardian rode in the driver’s seat of a multi-million euro research vehicle “Jack” by Audi on the autobahn, she observed it carried out maneuvers so smoothly “it felt like the car was participating in a courtly dance with others on the road.”
Despite such glowing reviews and the unabated evolution of driverless vehicles, Jack and many its counterparts will not be available for mass consumption for another decade or so.
AGVs and today’s warehouse
In the world of material handling, the notion of driverless has been around for 60 years since the first Automated Guided Vehicle (AGV) appeared in a grocery warehouse. High-tech warehouse operations are already used to the sight of AGVs performing tasks, such as the vertical storage and retrieval of pallets and the loading and unloading of pallets onto outbound trailers.
Driverless robotic vehicles, on the other hand, have generally been assigned to low complexity and repetitive horizontal movement of materials, as well as assisted order picking that involves a high degree of machine and human interaction. Although it may sometimes sound as if driverless vehicles are about to phase out forklift drivers altogether, Toyota Material Handling, which has developed an Autopilot AGV driverless forklift range, notes in a blog post that “there is still value in human operators in an automated warehouse. Human operators are far more capable of identifying issues in the immediate environment and any problems with picking orders. The role of the human operator in an automated warehouse will be more dynamic and varied as the ‘grunt work’ is now tasked to the automated system.”
This argument echoes the challenge that makers of driverless automobiles have expressed: In order for the technology to reach the next level of effectiveness, it has to assume “human” qualities. While the driverless car comes to a complete stop at the sight of a yellow light, the human driver is more likely to speed up to beat the red light, a fact that has been blamed for a number of collisions during testing of a Google autonomous vehicle prototype.
The potential of driverless vehicles
That being said, driverless robotic vehicles hold enormous potential. In an interesting webcast on DC Velocity — which addresses the technology’s role in distribution operations that include horizontal transport and full-case picking applications — two experts tout ROI and productivity gains.
DC Velocity Senior Editor David Maloney and Marc Wulfraat, president of global supply chain and logistics consulting firm MWPVL International, estimate a three-year ROI is possible and that 20-25% productivity gains for order picking are realistic, as long as certain obstacles are overcome. For example, old legacy applications rarely integrate well with newer real-time technologies. If the two are forced together, it may happen at the expense of speedy processes, thus negating the effect of why the driverless technology was introduced in the first place.
Maloney and Wulfraat explain: “In high-density full-case picking environments (e.g., grocery distribution), an order selector can pick 175 – 200 cases/hr or one case every 18 – 20 seconds. If a 5-second delay due to system latency is introduced, then this would result in a major decrease (19 – 24%) in order selection productivity to 141 – 157 cases/hr. In a facility shipping 1 million cases/week with labor cost of $23/hour fully loaded, this would add around $1.6 M of warehouse labor expense to the operation. Clearly, this type of technology cannot add any system latency, which suppliers are working hard to guarantee.”
Another challenge arises when multiple vehicles have to pass within the same operating aisle. Considering the minimum clearance that it takes for a robotic vehicle to pass another without safety sensors bringing it to a halt could pose a problem in distribution centers with narrow aisle widths.
Still, in the big scheme such challenges pale in comparison to how far the technology has already come. When it comes to automating the horizontal transfer of products in a warehouse or distribution center, driverless robotic vehicles are undoubtedly the answer.
What do you consider to be the main challenges to full-scale adoption of driverless robotic vehicles in the warehouse or DC?
Fronetics is conducting a survey to determine the benefits and challenges of social media for companies in these industries.
Two years ago, Fronetics surveyed a number of individuals working in the logistics and supply chain industries, including those employed by manufacturing, warehousing, and transportation companies. The survey’s goal was to find out how these companies were using social media, and if they were realizing any benefits or encountering any challenges by participating.
Interestingly, 100% of respondents reported having used social media for 5 years or less. Despite this relatively short implementation period, the majority (68%) said that their companies had already realized benefits from participation — primarily increased engagement with customers, increased market intelligence, and increased business intelligence.
As things go in the technology space these days, social media looks quite different than it did two years ago. What’s more, companies in these industries have, presumably, been using these tools for longer. Have a better understanding of social platforms and more opportunities for businesses impacted the benefit to users?
Fronentics is conducting a new survey to find out. We invite individuals working in the warehousing, manufacturing, and transportation industries — or those in other supply chain and logistics fields — to participate.
The survey takes about 3 minutes to complete. Responses will be reported in aggregate, and no identifiable information (individual or company) will be shared.
We look forward to hearing about your experience with social media!
