The eCommerce boom has transformed manufacturing, retail and 3PL. Driven by growing customer demand for faster delivery times, added convenience and a seamless multichannel experience, organisations face unprecedented pressure to gain efficiencies, improve accuracy and reduce costs at every stage of the supply chain. With customer expectations continuing to rise, businesses are at a crossroads: investment in automation is becoming essential to remaining profitable and competitive.
But what does this mean in practice? Steve Richmond, Director – Logistics Systems, Jungheinrich UK, explains the importance of moving beyond siloed operations: it is now imperative for logistics managers to adopt a holistic approach to operations, where man, machine and software work in harmony to unlock the next level of efficiency gains.
Customer experience led
In the retailer race to deliver the ultimate customer experience, many organisations are living or dying by their management of delivery, returns and customer service. Logistics practices can make or break the business model and an efficient supply chain is arguably now as important as the commodity it is producing and distributing.
As customer demand for greater convenience continues to grow, the pressure is mounting to further drive efficiency, improve accuracy and reduce costs at every stage of the process - pushing demand back through the supply chain. Not only is logistics now integral to an organisation's business model but in the drive to meet customer demand for a documented journey of deliveries and returns, the supply chain is blurring, with a far less distinguishable beginning and end point.
As a result, organisations are looking to automation both to manage escalating volumes and to ensure required data is automatically accessible and ready to integrate with the rest of the business. But what does this really involve? In essence, it requires new thinking. The depth and innovation of automation solutions now available are compelling but organisations will not drive the sea-change in operational performance by considering any solution in isolation.
Simply adding faster forklift trucks or equipment to a warehouse, for example, is not going to address the inadequacies of out-dated technologies and processes. Just extending existing conventional storage mediums is not going to help an organisation meet the fast growing demand to pick individual items. To face up to the challenges of a new, customer experience led business model, organisations require an end-to-end, holistic and business led approach to intralogistics solutions.
Open mind drives innovation
Significant improvements in efficiency and cost reduction will only be achieved by process and technology combined. In today's warehouse, distribution centre or factory environment, everything interacts. There may be small incremental gains to be had from specific new systems or solutions but by linking everything together holistically, considering systems and processes, those small gains are multiplied – enabling organisations to meet the new customer service driven business model.
While, in many cases, organisations may have similar business challenges and objectives, every organisation will have its own idiosyncrasies – from product range and service delivery, to customer expectation and company vision. As a result, there is no one-size-fits-all logistics model – and, as such, no one-size-fits-all automation solution. So, businesses must stop looking for one.
While a fully automated solution might well be ideal for certain operations, others require a more manual, people led approach, and vice versa. Organisations must therefore adopt a business led approach to intralogistics, and look to consultative suppliers that share this ethos. What is required is an intelligent consideration of business objectives combined with an end-to-end intralogistics solution – from trucks to racking, warehouse design and process change to software, systems integration to customer service.
When considering automation, logistics managers must first ask: what are the key business objectives, how can value be added to the customer proposition, what are the constraints to achieving new levels of responsiveness, and what are the business aspirations for the future?
Business demands can change significantly within the life cycle of a standard product and it is therefore critical to look at every aspect of the logistics model, from ergonomics to productivity, serviceability, scalability and flexibility. In today's ultra competitive eCommerce climate, businesses that do not consider solutions in the context of their end-to-end operations run the risk of perpetuating inefficiencies that they are running out of time to address.
As organisations across manufacturing, retail and 3PL work to extract even more efficiencies from their processes, automated solutions are now a critical component to remaining competitive. And there is no doubt that incremental gains can be achieved by opting for new racking or state of the art voice operated equipment. However, such point solutions alone cannot deliver the accuracy, responsiveness and efficiency required today. It is those organisations that embrace a holistic and business led approach to automation, creating synergies between man, machine, software and the individual application, that will lead the way.