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Systems based on small AGVs or mobile robots, like Swisslog’s CarryPick, will be more adaptable to small spaces and more flexible in dealing with volatility

Scale, flexibility and the need for automation – By Martin Kohl

What will the warehouse of 2030 look like? As technology advances and society changes, consumers are demanding faster and more readily available service.

Current warehousing and distribution practices won’t be sufficient to keep up with market expectations. Forward-thinking businesses are already investing in flexible, scalable and automated solutions to future-proof their operations.

Impacts on distribution

The supply chain of the future will need to include some key capabilities. 

Storing products closer to consumers

Many of the trends lead to the same conclusion: more people living in cities and ordering products online will increase demand for same-day delivery. At the same time, cities will be battling increased congestion and air pollution. 

Small, self-driving vehicles and local delivery robots could be part of the solution. However, these systems are typically short range, which will require that distribution centres (DCs) are located in cities close to consumers. 

Yet this presents its own set of challenges. The number of SKUs is already in the thousands or tens of thousands in many warehouses. With space constraints in most population centres, how can an urban DC support the needs of the market it is positioned to serve?

Customised production
As seen with the new Adidas factory, products that are custom-made for one consumer are sent from the manufacturing site directly to the consumer. While this minimises the requirement for storage space, it will require fast transport and sortation networks, and potentially some ultra-short storage to synchronise product flows with customer schedules.

In 2030, customised production will most likely be limited to luxury items, spare parts or fashion products. Basic essentials will still be produced to stock and require some form of warehousing. 

Omni-channel support
Supporting omni-channel retail requires providing consumers with options that extend beyond traditional delivery. By enabling options such as instore or curbside pickup, retailers can give consumers more control over how they receive products and eliminate some of the frustrations with home delivery, while shifting the cost of the ‘last mile’ to consumers.

These impacts are all addressed through the development of urban DCs that bring distribution closer to consumers, support custom production, and fast efficient delivery based on consumer preferences.

The urban DC of 2030

Urban DCs bring key logistics capabilities close to consumers.These will likely be shared-service facilities that optimise all logistics flows for the community they serve, including the following core functions.

Inventory and order picking
Similar to many warehouses today, the urban DC will need to hold some inventory. However, space in cities is limited while product ranges are likely to continue to expand.

In principle, smaller items and popular products would be held in stock. Inventory size would be minimised through 3D printing and use of big data to predict behaviour and distribute items to the urban DC just before they are ordered. An order picking process, using automated picking systems, would also be required. 

Because the urban DC will support multiple sellers in a shared-service model, this creates the opportunity to consolidate articles from different sellers into one shipping carton to reduce costs and enhance the customer experience. 

3D printing
The urban DC is an ideal location for large, sophisticated and fast 3D printers, reducing inventory requirements and providing for personalisation.

Parcel consolidation
In today’s networks, companies like DHL, UPS and FedEx do their own sortation and last-mile transport. The urban DC of the future will consolidate pre-picked parcels coming from multiple sellers or parcel companies into one last-mile delivery to the consumer. 

Key enabling technologies

Urban DCs will need to incorporate a number of advanced technologies to meet the distribution requirements of 2030.

For picking, intelligent robots with advanced grippers could pick individual products, assemble products from several parts produced inside the warehouse, and consolidate orders from multiple sellers into one shipping carton. Robotic goods-to-person or fully automated picking solutions, such as Swisslog’s AutoPiQ, would support the high pick speeds required by the urban DC.

Swisslog’s ItemPiQ can pick single items efficiently from a source bin into target bins or cartons

Big data and smart self-learning analytics will minimise inventory by predicting what consumers will be ordering. However, the predictions will not always be perfect, and that will create additional product movements. 

For products that can’t be printed or predicted, new means of fast long-distance transport could support delivery of products not stored locally, such as a Hyperloop or long-distance cargo drones. In addition, automated storage and retrieval will maximise the amount of product that can be stored in the available space.

Online marketplaces would need to be employed to manage supply and demand among sellers vying for space in the DC, allowing sellers to balance their costs against the need for delivering quickly.

New means of fast long-distance transport could support delivery of products not stored locally, such as a Hyperloop

Last-mile delivery options

Many different solutions will exist for last-mile delivery and the urban DC will need to interact with a multitude of delivery options. 

A significant percentage of parcels will still be delivered in a multi-delivery vehicle. Most likely, this will be an electric, and potentially driverless, version of the familiar delivery van. Loading such a vehicle efficiently requires that a high number of parcels are loaded in as short a time as possible. 

For this, we can imagine standardised loading modules where parcels can be staged before the vehicle arrives. Inside the vehicle, there may be a form of automated handling, presenting individual parcels to the driver. The Daimler Vision Van is an early example of this concept. 

The urban DC will also need to support customer pickup, such as a ‘parcel station’, with automatic loading of individual lockers from which consumers would retrieve their purchase, and a network of mobile pickup points. These would be filled quickly with multiple parcels at the local DC and then driven to a location closer to the consumer (e.g. shopping mall parking lot). 

Some parcels may need even more individualised transport methods, such as parcel drones or small autonomous vehicles. These methods will require different loading processes and the warehouse will need a series of small ‘docks’ for these, with a way of automatically loading them. 

Another potential scenario is that consumers will send their own self-driving vehicles to collect their packages. For that, the DC could use mobile robots to place the goods in the car. It is not difficult to imagine a next generation of KUKA’s Mobile Robot (KMR) doing this.

The need for automation

Distributing warehouse capacity across multiple small centres within a city that directly interact with consumers does introduce the challenge of increased volatility on DC demand. At the same time, the ageing population, labour shortages and new labour regulations will all require a higher level of automation.

Traditional automated systems have not proven to be well suited to deal with volatility or small-scale implementation where project cost is not directly related to size. Newer automated solutions will, however, address these challenges. 

Systems based on small automated guided vehicles (AGVs) or mobile robots will be more adaptable to small spaces and more flexible in dealing with volatility. With these mobile systems, it will be easy to change routing or logic to adapt to changing demands. One could even imagine that robots would be moved from one DC to another, based on demand, by the very same vehicles that supply products. Much of that is already possible today with solutions like Swisslog’s CarryPick system. 

Self-learning software and peer-to-peer communication make these vehicles ‘plug and play’, eliminating much of the fixed front-end costs required for traditional automation systems. This will deliver the flexibility needed while making small-scale automated systems feasible.

Warehouse management software is already evolving in this direction, with platforms such as Swisslog’s SynQ integrating multiple functions, including automation control, into a modular architecture that more easily adapts to changing technology while also providing the business intelligence that supports predictive logistics.

A question of ownership

A key question to answer, considering the shared nature of these urban DCs, is who would own and operate them? The essential characteristic is that these centres will consolidate the flow of goods from many different sellers, and may consolidate transport with many different means by different providers.

This could be delivered by large ecommerce platforms such as Amazon, by parcel companies that already deliver for multiple sellers, or perhaps cities could control their own local DCs to reduce traffic and pollution, putting operations out to tender. 

Conclusion

Supply chain managers are already dealing with a myriad of technology and market changes as they implement modular automated solutions to increase productivity and throughput in their warehouses. 

However, the changes occurring in society, with more disposable income and higher consumer expectations, may stretch existing distribution networks beyond their ability to adapt. 

This article presents a vision for the future warehouse that assumes the need to move products closer to consumers, support individualised production, and provide same-day delivery through multiple channels. By implementing intelligent software to control automation, companies can have precise control of movement of products through to full management of inventory in and out of the warehouse.

Swisslog’s Industry 4.0 capabilities enable the company to transform big data into predictive decision-making, which will optimise storage, transport and delivery efficiencies in ways previously unimaginable.

The solutions emerging today in terms of AGVs, automated picking, and intelligent modular software provide the speed and flexibility to support these core capabilities and will continue to evolve to meet the demands of the future.

The introduction of newer and more flexible technologies, combined with data-driven robotics applications, makes the possibility of meeting ever-increasing consumer demands a reality.

This article is the second in a two-part series. The first article, featured in the February/March edition of FTD, examined the trends and technologies that will shape the warehouse of the future.

Martin Kohl is a senior sales consultant, warehouse and distribution solutions, at Swisslog Australia, where he is responsible for Swisslog’s food and beverage segment in Australia and New Zealand; for further information, visit www.swisslog.com



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