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Top 10 Solutions for Common Warehouse Problems

warehouse

Top 10 Solutions for Common Warehouse Problems

Warehouse Engineers attended the Modex Conference looking for low-cost solutions to improve warehouse operations. As a previous warehouse manager, I understand traveling isn’t always an option because you have to get orders out the door. No reason to fret, Warehouse Engineers has you covered with 10 solutions to common warehouse problems.

Problem 1: Cycle counts

We’ve all been there… the quarterly cycle count or worse, the full annual. Ware eliminates the cycle counting dilemma. Yes, that’s right, Ware deploys fleets of drones, powered by machine learning, to perform cycle counts. Ware creates the software and analytics that lets the drones do the work, saving time and money.

Problem 2: Tracing orders

Ever had an order delayed by the rail or carrier?

Me!!! I’ve been on the phone with the carrier asking where is my order?

Pallet Alliance developed a platform to track individual pallets from end to end of the supply chain with IoT connectivity. Intellipallets integrate with existing wooden pallets providing efficient tracking of shipments. Once the pallets become “intelligent” they provide information like transit location or stationary time. Now you will know when your order is stuck in a rail yard.

Problem 3: BOL Paperwork

Why does the customer call for the BOL that you can’t seem to find?

BOLs are a necessary evil. You must get the driver to sign for the order, then store the order for years. The process creates so much paperwork, and it’s even harder to track individual BOLs. I hate when the customer calls for a BOL from 3 months ago. The smart people at SMART BOL developed an automated solution for bill of lading signing and document retention. Yes, there’s an app for drivers to sign the BOL and the signature magically goes into the cloud.

Problem 4: Communication Boards

I’ve struggled with outlining a whiteboard for daily huddles. The magnets are not straight, the markers start to fade. Sometimes I spent more time preparing for the meeting than the actual meeting itself. Visual Workplace is a source for Lean & 5S Supplies. They have great templates for KPI Tracking and daily huddles. Visual Workplace can also print dry erase board overlays for kaizen events and root cause analysis.

Problem 5: Workstations

We all know the value of 5S, “a place for everything, and everything in its place.” But what if you don’t have a place for everything? Literally, while you are setting tools in order, you are missing a place for a tool. With PioneerIWS, you can easily build a custom workflow to meet your needs. Their Flexturs can be transformed into mobile workstations, shelves, and packaging stations. Setting and Sustaining workstations are a lot easier with PioneerIWS.

Problem 6: Shifted Rail Cars

Ever been nervous about opening a box car?

I’ve been there, crossing my fingers hoping that the pallets are still upright.

Of course, the pallets have shifted and spilled over. Have you ever seen a rail car full of spilled tomato paste, yuck! Shifted cars are a no-win for everyone involved. Filing a claim with the rail line is so difficult, most people don’t bother. The rail always points the finger at the packaging and swears they never hump cars. Next time I have this problem, I’m calling Southern Bracing Systems (SBS) for a solution. SBS manufactures a patented Ty-Gard 2000® approved by the Association of American Railroads (AAR) to keep orders in tack. They also provide expert training for AAR-approved cargo securement equipment and cargo restraint systems uniquely designed to prevent damage in transit.

Problem 7: Missing Labels

In wet or grimy conditions, labels just won’t la

I’ve had to label entire warehouses: entry doors, ramps, racks, etc… Sometimes a label just doesn’t work. The Patmark 1533 provides a solution for quick, custom permanent applications. MarkinBOX is the world’s most compact portable marking machine system. Combined with a carbide pin, you can mark on a vast range of surfaces like racks and bins. I wish I had the Patmark 1533 when I 5S’d a battery storage room.

Problem 8: Data Overload

We’ve all heard the phrase “big data” but what do we do with it?

Big data creates value when leaders can make data-driven decisions. With all the data coming from the WMS, ERP, and time clocks, who has time to consolidate the data for reporting? Easy Metrics solves the big data problem by providing custom reports and KPIs for your team. I know tracking labor can be burdensome, at times requiring a full administrator. Easy metrics make it easy for everyone.

Problem 9: Packaging Dimensions

Length, Width, Height…. And where is my tape measuring?

We’ve all had to answer those questions when preparing parcel for delivery. It’s so frustrating when you have a large or heavy box that you need assistance with to get all the dimensions. Sizensor designed an app to instantly capture parcel dimensions. Sizensor has a lot of benefits around the warehouse-like planning a load diagram for new products. Consider how easy the app is to install and use, it’s a win.

Problem 10: Warehouse Space

We need more space.

No warehouse manager wants to tell their president or sales team those words. I’ve lead tens of projects to increase density and utilization. We go vertical, we consolidate, move things around, but sometimes just need more space. When you literally need to pop up a warehouse, ClearSpan is your solution. ClearSpan warehouses can be custom designs or turnkey solutions for the appropriate storage solution.

There you have it, ten solutions for common problems within a warehouse. I hope this information is useful and please share with your colleagues. Collaboration and networking is another benefit of attending conferences. All the companies listed above have great salespeople Warehouse Engineers interacted with. If these are great ideas, and you don’t have the capacity to manage the project contact Warehouse Engineers.
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Brandon Ashby, the managing partner, is a certified Project Management Professional who can manage the project for you.
warehouse

MAN AND MACHINE ARE KEY TO CREATING COMPETITIVE ADVANTAGE IN TODAY’S SUPPLY-CHAIN WAREHOUSE

When it comes to warehousing and the use of robotics to manage and maintain a competitive supply chain, the conversations usually begin with the potential for these powerhouse machines to replace workers and eliminate the need for humans in the facility. As this might be the case in some situations, the bigger concern surrounds how to successfully create an environment where both humans and robots are able to safely collaborate, creating more efficiencies within the warehouse sector while at the same time optimizing the processes many still operate manually.

This is the concept of interconnecting the mind and abilities of these machines to support human workers, not replace them. The truth of the matter is, there are some things humans can do that robots simply cannot do, and the fear of robots replacing humans is backwards compared to what is really going on in meetings between warehouse managers and creators of autonomous solutions.

Dan Khasis, founder of Route4Me, a unique route optimization software platform, takes a deeper look at the emerging relationship between robotics and warehouses and dissects the reality of what is really going on when managing the supply chain inside the modern warehouse. “There’s this perception and risk associated with the subjects of robotics and job security,” he concedes. “It is very common to see a lot of warehouses that are based on the location, the retailer, the company, where their worker population is unionized. Many times, the situation starts with C-level executives who discover the technology that can drive efficiencies in the warehouse, save money and that work very well.”

“However, word gets back to the union workers that the expectation is for them to work twice as much in the same amount of time and they quickly realize it isn’t realistic or possible,” Khasis continues. “At that point, technology adoption is eliminated because people cannot be replaced. At that point, they accept the inefficiencies and turn to loopholes to deal with the issues that are clearly present. It is not the worker’s fault, but there is a struggle with getting warehouse workers onboard with these new technologies in addition to the long hours that are required to keep up.”

Khasis goes on to explain that the ability to do the picking and packing in the warehouse is still one of the biggest pain points in the warehousing sector. An example he cites is weight restrictions and what makes sense in terms of safety and simplicity. Can one send a robot to pick up a fridge that weighs 800 pounds versus utilizing someone in a forklift to lift the fridge? Sure, but some would question how a robot could prove to be more beneficial than a forklift in situations like these.

“There are basic and common risks associated with robotics, such as employees getting injured, and the technology exists to avoid such accidents,” Khasis says. “In terms of a hybrid model, you’re able to have things such as augmented reality where if one is driving through the warehouse, there’s clearly the safety component in question. There are heavy items throughout the warehouse that are elevated and there needs to be a population of properly trained employees to minimize these risks along with the technology to support it.”

Heavy lifting comes into play with this pain point and Khasis emphasizes that well-trained individuals are more favorable over advanced technology in these cases. With every advancement comes risk and it’s about measuring the risk against current and potential resources that determines the best way to optimize operations while mitigating these risks. The warehouse sector is aiming to operate optimally and safely as that is where competitive advantage is ultimately found.

“The hybrid warehouses that are half robots and half autonomous are still an open question regarding the interaction between human workers and robots because there will undoubtedly be issues with how they collaborate together,” Khasis points out. “For example, will there be a specific area for robots and one area for the workers, how we will address collision avoidance, and how they will actually collaborate are the bigger questions still in the process of being solved?”

Leadership in the warehouse sector is experiencing a technological disconnect as well. While many news headlines boast the latest big-name companies adopting a new form of advanced technology, there are still many large companies operating the good old-fashioned way: via Microsoft Excel or another manual process and dismissing the option of advanced technology completely. This isn’t a bad thing, but Khasis emphasizes that these companies could maximize their bottom lines by adopting technologies that aren’t incompatible with emerging technology.

“There’s a generational shift in the warehouse,” he says. “For example, the VP or director in today’s warehouse might not have faith in the modern technology approaches available. We sometimes have friendly arguments with our own customers explaining how something might not ‘look’ better but mathematically and in terms of optimization, it is paramount in comparison and when broken down. There are both trends and realities that differ from what people are talking about versus what’s actually happening.”

Khasis continues: “Many warehouses out there are still using legacy software and there’s a significant amount of big industry players who still have not modernized their systems. Part of that modernization is moving stuff to the cloud and as they move things up to the cloud, opportunities will open up for them to take advantage of newer technologies. These newer technologies on the market are not backward compatible with the relatively obsolete systems that are closed off and still very much in use. They simply do not interact well with other systems.”

For warehouses, proactive measures through advanced technologies are phasing out antiquated systems that require a retrospective approach to the process. Processes Microsoft Excel are still very much part of the manual process Khasis says breaks the dynamic between the adoption of technology and the desired bottom-dollar impact.

“Few companies actually understand what they need to have in each warehouse and when they need it,” he says, “and the way to successfully identify what consumers are demanding is best found through reliable and integrated e-commerce data. In some cases, the warehouse directors will project certain time frames for specific items based on the previous year rather than analyzing data revealing search activity increases within the e-commerce sector.”

These data predictions and trends monitoring can give matchless insight on upcoming and unpredictable events that other manual processes simply cannot accomplish. Weather changes, for example, and alerting warehouses of what to keep in stock versus assuming patterns in spending can make big differences in gaining that advantage over competitors. E-commerce monitoring through this data can give ample information in real-time without the need of someone else providing trend forecasting. This brings extra work costs down for the warehouse worker and increases time savings overall, all while driving the bottom dollar up.

Khasis emphasizes the importance and role advanced technologies will have in providing more opportunities in optimization and human-robot collaborations. With advanced technologies, warehouse managers can better predict what types of deliveries are on the horizon and prepare their warehouse more efficiently, streamlining the process and interactions between automation and warehouse workers.

“The warehouse does not live in a vacuum and it must be able to adapt to upstream and downstream systems. For example, if a shipment is coming in and you have the capability of knowing what is on that vehicle and where it needs to g—assuming you have the technology available to share that information—you can then have the human workers and robots collaborate to make room for that to go smoothly. This can include advanced space allocation, unloader coordination and advanced warehouse space preparations.”

Autonomous vehicles will soon have to adapt to the warehouse as well. The issue of inter-compatibility will undoubtedly be of question.

“One cannot send a delivery vehicle or any other type of truck with a different height from the warehouse because the robots can’t access it,” Khasis notes. “The concept of inter-compatibility between internal robotics and external autonomous systems will be particularly important in the near future. We believe that in order for there to be efficiencies, there must be integration, and everything needs to collaborate.

“Our patent–called Autonomous Supply Chain, and the point of this is to reiterate that a warehouse can have the best software on the market but if it isn’t compatible or the timing isn’t right, then it doesn’t matter. That brings up the question of timing and what determines the right time and how it impacts planning which is very important.”

Without the key element of integration, the most advanced technology simply will not present the results sought for competitive advantage in the warehouse, negating the desired effects from the dollars spent on adopting them. For companies seeking to redefine the warehouse, they must consider in what ways integration is possible and affordable.

“We look at all the assets including the people, the vehicles, the potential shipments on the way in and out of the country, the warehouse and its capabilities and location, and figure the best way to optimize routes,” Khasis says. “For some of the biggest global companies, this is still being done with manual interpretations, which includes reporting analysis after the fact. There is little preventable action with this type of process, and it takes more of a retrospective approach.”

The option of accepting inefficiencies is simply not going to cut it anymore. Processes are changing, technology is becoming the new standard, and people are needed that are open to learning and adopting methods of work that increase productivity while supporting long-term and short-term goals in the supply chain.

“The goal of Autonomous Supply Chain is to get in front of the problems and decisions rather than behind them while utilizing an advanced technology that can collaborate across the board,” Khasis says. “By incorporating all techniques across different business units and different business entities, the process is streamlined. When this is all put together, we are estimating anywhere from 25 to 50 percent value creation, savings and profit increase mainly because a lot of this process is currently human dependent.”

More than ever before, the concept of synchronization in the supply chain is needed. Customer demands will continue to rise and become more complex as time goes by. In the age of Amazon and next-day delivery, the warehouse simply cannot afford to operate with one or the other–being robots or humans. Both are a crucial part of the bigger picture that have a significant impact on business.

“The warehouse location is equally important, and the industry is extremely behind in understanding warehouse site selection,” Khasis says. “If you have a warehouse in the wrong area–even with 100 percent support from the union with the best robots on the market—it is going to be difficult because now you need different people fulfilling roles that weren’t accounted for, such as drivers. Sure, you might have a cheaper warehouse but if the location isn’t carefully considered, your savings are quickly dissolved in other valuables that weren’t modeled into the original budget. This process is also still manually done throughout the industry and can be optimized using our software.”

Each element in the process will undoubtedly impact the success and outcome of your warehouse, beginning with site selection to worker population to technology integration. In an age where business goes to people instead of people going to businesses, ensuring all parts are synchronized is a critical part of the bigger picture of gaining and maintaining competitive advantage and keeping up with an evergreen marketplace.

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Dan Khasis is a technology entrepreneur and the founder and CEO of Route4Me, a unique route optimization software. 

modex

MODEX Day Three: Robotics & Automation Continue Maturing

In typical Modex fashion, robotics and automation were among the hot topics discussed by keynote speakers, exhibitors, and attendees. A vast array of capabilities, sizes, and industry-specific robotics could be found throughout the show floor, each showing off a new capability. It’s clear that robotics continue to evolve and show no signs of slowing down progress in meeting demand within warehouses and distribution centers.

Mike Futch, President of Tompkins Robotics made this point very clear during his session on Wednesday afternoon titled, “The Lights Out DC/FC: How Close Can We Get?”

Futch addressed the use of various technologies to address workforce constraints while improving the effectiveness and performance of the supply chain.  He identified what advancements will assist in solving bottlenecks such as facility constraints, space issues, and the current situation in unemployment. As these challenges persist, robotics continues to mature.

“There’s a limited workforce, a limited number of people that can drive the distance to enter the immediate geographic region, and these larger buildings are competing for that workforce that’s already at a low unemployment rate along with offering increased wages and siphoning workers off of others. This is a real challenge for some markets.”

“Labor is scarce and we have record-low unemployment, typically to expand capacity from a volume perspective and companies are turning to more shifts. If you already have a tight labor market and you’re adding shifts, where are the workers coming from? And this creates a bigger problem.”

The workforce is a key constraint and while workforce rates are lower than others in some places, Futch states that companies are competing to stay ahead of demand through increased wages while solving the best approach to a limited workforce.

Machines continue to do the same things a human can do but without interruptions with repetitive, difficult, or taxing work that inevitably fatigues the human body. That being said, the industry still requires a skilled workforce and robotics should not be purchased for their appeal. It’s becoming clear that a blend of workers and robotics is a more common theme for integrating such advancements over the idea that robotics will “overtake” worker’s jobs. In fact, robotics is providing a way to re-establish worker tasks rather than eliminating the worker.

“Robotics has matured tremendously from where they were a few years ago. About 5-10 years ago, the pick-and-place robots at the show could not do the things they are capable of doing now. Two years from now, they’ll have the capability to do twice as much as now. Robotics is maturing and meeting the three R’s: improve rate, improve reliability, and improve the range of products and items,” he explained. ”

In terms of a fully automated DC, Futch added that about 60-85 percent of manual tasks can be automated realistically rather than a “lights out” center.

“Beyond the pick-and-place robots, other robots are doing the same thing: creating a blur of separation between what a human can do and what a machine can do.”

disruption

He Disrupted The Travel Industry; Now He Advises Others On Surviving Disruption

When Terry Jones began his business career as a travel agent 50 years ago, he booked his first reservation by telegram, making him feel as if he had time traveled to the Old West.

“My boss was a Luddite who refused to consider upgrading even to a teletype machine, which were in widespread use at the time,” Jones says.

It was a humble beginning for a man who would someday use technology to disrupt the entire travel industry and, as founder of Travelocity.com and co-founder of Kayak.com, dramatically change how we make travel plans.

These days, Jones talks a lot about disruption, not only as it applied to what he did with online travel booking, but also how all companies are at risk of being disrupted right out of business if they don’t adapt to changing times and changing technology.

Jones shares his thoughts on the subject in his new book Disruption OFF: The Technological Disruption Coming for Your Company and What to Do About It (www.tbjones.com).

That subtitle might make “disruption” sound foreboding – and rightly so – but Jones says within every disruption exists a silver lining of opportunity.

“You call it disruption, I call it innovation,” he says.

In other words, those competitors who upend the business landscape do so by being innovators and risk-takers, something that becomes anathema for too many large corporations that choose caution overexposing themselves to potential loss.

But caution, Jones says, can be the riskiest business move of all.

“You may be afraid to disrupt your organization because you’re afraid it will fail,” he says. “The irony is, your organization will fail if you do not disrupt it.”

Indeed, there exists a mounting casualty rate of once profitable companies that saw their market share dwindle as daring, savvy and previously unheard of competitors emerged to claim their thrones.

Blockbuster, Kodak, Radio Shack and Borders are among those that fell prey to changing times and advancing technology over the last decade. Blockbuster famously turned down an opportunity to buy a small, niche business that rented DVDs to customers by mail. Blockbuster executives failed to recognize the seemingly insignificant Netflix as a disrupter in-waiting.

“It’s unlikely your largest competitors will be your undoing,” Jones says. “The problem is those 5,000 to 6,000 new startups per year that are attacking the traditional world. You need to put their ideas to work and become a disrupter yourself.”

Not every corporate juggernaut ends up tossed on the business ash heap, though.

“There are a surprising number of 100-year-old companies out there,” Jones says. “And most of the ones I’ve talked to seem to have mastered the ability to shed their old skin and renew themselves when required, often quite painfully.”

One that gets a mention in Jones’ book is American Express, founded in 1850 not as a financial services company but as an express shipping business. For more than a century and a half, the company has proven itself open to change and innovation, and it boasts on its website that it has developed many new digital tools and continues to enhance its digital offerings.

“Your company may currently be strong and it may be run by intelligent executives,” Jones says. “But the question is: Are you adaptable enough to change? Even more importantly, are you proactively preparing for change? If so, you and your company are more likely to survive and maybe even thrive.”

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Terry Jones (www.tbjones.com), founder of Travelocity.com and founding chairman of Kayak.com, is author of the new book Disruption OFF: The Technological Disruption Coming for Your Company and What to Do About It. For the last 15 years he’s been speaking and consulting with companies on innovation and disruption. Jones began his career as a travel agent, jumped to two startups and then spent 20 years at American Airlines, serving in a variety of management positions including Chief Information Officer. While at American he led the team that created Travelocity.com, served as CEO for six years, and took the company public. After Travelocity he served as Chairman of Kayak for seven years until it was sold to Priceline for $1.8 billion.

automation

Automation Won’t Destroy Trade – It Might Even Boost It

Alarm bells are ringing

Many industry observers are sounding alarms about the looming impact of automation, robots and 3D printing, which they fear will destroy jobsdisrupt value chains and maybe even reduce the need for international trade. Developing countries are particularly concerned because trade has been an avenue to economic development and growth for them. But a recent report released by the World Bank shows that the data and evidence don’t support the hype. Instead, automation, robots and 3D printing might actually increase trade as trade costs continue to fall.

Some business analysts have warned that automation and robots could disrupt and shorten global supply chains. The thinking behind the concern is that, if a computer can design it and a 3D printer can make it, then we won’t need to source it from countries abroad that have more abundant low-cost labor than we do. Instead, companies will drastically shorten their value chains, which could reduce international trade.

The anxieties have gotten the attention of development economists and developing countries. Trade and economic growth go hand-in-hand, both in economic theory and in practice. Multiple studies have shown that firms in developing countries that participate in global value chains outperform their local peers that solely focus on domestic markets. If robots eliminate the need for global value chains, this important avenue for economic development could be threatened.

Anxiety over automation may be overblown

Scare tactics about economic change are attractive because they get our attention. About 15 years ago, we saw headlines about “white collar outsourcing” (once attorneys were added to the list of jobs that could be moved offshore, the panic even spread into boardrooms). Some lawmakers called for restrictions on offshoring, and some of those calls are still alive today. But the mass exodus of white collar jobs did not occur.

The World Bank is a multilateral development agency that makes grants and loans to support capital projects and economic growth in the poorest countries. Anything that reduces the need for trade and global value chains would hit those developing countries hard, putting the automation concerns squarely on the World Bank’s radar.

In its annual World Development Report, the latest released on October 8, the World Bank does not take a definitive stance on the overall effects of automation, and it does not make any bold predictions. But it does make one thing clear: The anxiety over automation hindering trade is not supported by the data and evidence. In fact, the authors show that sectors with the largest increases in automation have also been those with the largest increases in trade. Yep, that’s right: We’re experiencing the opposite phenomenon to what so many are worried about.

Automation actually helping to expand trade

Specifically, the report shows that the percentage change in imports of parts from developing countries from 1995 to 2015 is higher in industries that are more automated. Agriculture and textiles are among the least-automated industries and have the smallest change. Metal, rubber and plastics, and automotive sectors have the highest rates of automation and the largest increases in trade.

Automation in industrial countries has boosted imports from developing countries

Why? Because automation, like robotic assembly and 3D printing, leads to an expansion in output and demand for material inputs. Automation can also lead to the creation of new tasks. So while it brings labor market adjustment pains — like technology and progress always do — automation will not necessarily reduce trade or shorten global value chains.

Meanwhile, investments in digital technologies continue to lower the costs of coordinating across long distances. These lower trade costs are expected to promote trade and lead to a continued expansion of global value chains, particularly for developing countries.

The big picture

Here’s the big picture: Change is the one thing in the economy you can count on. Improvements in how we make things and advanced production technologies are likely to continue, and workers and firms that adapt and embrace these changes are likely to outperform those that do not. But a wide-sweeping elimination of trade and global value chains due to automation and robots? Don’t believe the hype.

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The original version of this article was published in The Hill.

ChristineMcDaniel

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article also appeared on TradeVistas.org. Republished with permission.

Takeoff Technologies Puts Robotics in Grocery Orders

Retail grocers including Albertsons, Stop and Shop, and Sedano’s are a few of the brands that have partnered with Takeoff Technologies, tapping into its innovative technology and robotics-focused strategies to more efficiently fulfill online customer orders.

Through the partnership, Takeoff’s Automated Micro Fulfillment Centers put AI-enabled robots to work to quickly gather and assemble large customer grocery orders, ultimately reducing time and cost compared to manual assembly. It’s reported that these robots can prepare as much as 60 items in a matter of minutes.

“The time is ripe for eGroceries,” said Jose Vicente Aguerrevere, co-founder and CEO of Takeoff. “Grocers have been dipping their toes in eGroceries for years. Now it’s time to jump in with both feet. Our automated, hyperlocal fulfillment centers enable grocers to do so with minimal operational costs.”

The company is encouraging grocers in urban and suburban regions to consider their Micro Fulfillment Centers once launched. These Micro Fulfillment Centers can be made out of existing space and extend market reach through a hub-and-spoke model.

“Takeoff is a win-win for grocers and consumers across the board,” said Max Pedro, co-founder and president of Takeoff. “Our eGrocery automation is a turn-key solution that uses robotics to unlock ultimate convenience for shoppers without need of charging fees or a price premium.”

About Takeoff:

Takeoff is an eGrocery solution that empowers retailers to attain profitable online growth by leveraging automation at a hyper-local scale. Orders are placed online through established retailers (whether using their existing eCommerce platform or Takeoff’s customized UI solution) and Takeoff’s automated technology fulfills the order using robots in Micro Fulfilment Centers.

The company’s robotics technology is proven and ready to deploy thanks to Takeoff’s exclusivity agreement with Knapp, a leading global provider of automated warehouse solutions. By leveraging automated Micro Fulfillment Centers, Takeoff’s innovative model operates at a much lower cost-to-serve than other eCommerce platforms, solving for both the cost of assembling the order and cost of the last mile. This results in savings for both shoppers and retail partners. For more information visit www.takeoff.com.

global logistics

Smart Logistics: Catalysts Changing the Logistics Sector

The logistics industry is watching closely as United States and China negotiate to resolve their trade war amidst the threat of higher tariffs starting March 1. At stake is $635 billion in annual trade – China exports $505 billion and imports $130 billion with the US[i]. These negotiations have repercussions for the global economy well beyond the US and China. Many industries engage vast trade networks that span myriad countries leaving few markets or nations exempt from these talks. For the US alone, which imports $2.3 trillion and exports $1.5 trillion annually[ii], its entire trade regime is now in play.

Countries are not alone in broiling trade disputes. This month XPO issued a profit warning citing the expected loss of $600M[iii], or 3.5%, of revenue from an unnamed customer. Amazon, widely believed to be XPO’s unidentified customer, is expanding its own logistics capacity. The expansion of e-commerce has been a boon for the logistics industry and bane for traditional retailers. Now as Amazon develops its own distribution capability, logistics providers and retailers alike are threatened. 

Global Logistics – an Industry in Transition

Ecommerce has been a key growth driver for the global logistics industry, which is expected to grow 7.5% annually from $8.1 trillion in 2015 to $15.5 trillion in 2023[iv]. The logistics of delivering directly to consumers is far more intensive than distributing in bulk to big box retailers. Long haul full truckload remains the largest market segment in logistics with a 70% share, yet less than truckload, parcel and intermodal – which together comprise 15% share of the logistics market – are fastest growing. 

The politics of logistics extends beyond trade disputes. US freight employs over three million truck drivers. As the graph below indicates, trucking is the largest employer in 29 of 50 states across the US. The American Trucking Association estimates a need for an additional 900,000 truckers[v] over the next ten years to keep up with demand. The industry already faces a shortage of over 50,000 drivers[vi]amidst the need to replace an aging workforce: 57% of US truckers are over 45 years old and 37% are over 55[vii]. Given the backlash over Amazon’s recent pullback of a second headquarters in New York City for 25,000 jobs[viii], one might imagine the political stakes involved with four million truck drivers across the US in the coming decade. 

Logistics – a Magnet for Venture Capital Investment

Venture capital has poured into the logistics sector in recent years. In 2018, global venture investment in logistics reached nearly $14 billion, more than the three previous years combined. Funding for supply chain, logistics and shipping businesses continues to grow in 2019. In February alone, investors have committed over $5 billion to the logistics sector. Major financings include a $1 billion investment in Flexport for intermodal logistics, $940 million in Nuro for its self-driving delivery vans, $700 million in Rivian for electric delivery vehicles, $400 million in DoorDash for local food delivery, and $300 million in Hong Kong-based Lalamove for last mile delivery. 

Five catalysts are driving innovation and investment in the logistics sector:

Ecommerce: Online retail continues to cannibalize physical retail. Ecommerce in the US reached 9.8% of total US retail in 2018, nearly triple the share of retail ten years earlier[ix]. Ecommerce is growing even faster in Asia, Europe and the Middle East. Traditional retailers are embracing omnichannel marketing as ecommerce extends to more retailing categories. The physical landscape will change dramatically in the decade as ecommerce players build more warehousing capacity replacing stores due to overcapacity in the traditional retail sector.

Crowdsourcing: Much as Uber, Lyft and Didi among others have disrupted the taxi industry through crowdsourced drivers, the gig economy is infiltrating the logistics sector enabling new services. Consumers are the biggest beneficiary through the rise of the concierge economy. Crowdsourcing has lowered delivery costs making home deliveries available for a broader range of items. Food delivery has received most funding with the rise of Uber Eats globally, Doordash and Postmates in the US, Just Eat and Deliveroo in Europe, Swiggy in India, and Meituan in China.  

Intelligent Automation: The securities brokerage industry has gone digital in the past two decades. The logistics brokerage industry still runs on phone calls and fax machines with limited price transparency and inefficiencies borne by limited supply chain visibility. Digital brokerage is now coming to the logistics sector through the confluence of sensors, cloud and intelligent automation. ELD and camera technology now monitor drivers reducing wait times, reducing accident risk, and helping to adjudicate cases when accidents occur. Venture backed companies that have raised $100 million or more in the US alone include Convoy, Flexport, Nauto, Next Trucking and Transfix, amongst others.

Electric Vehicles: The prospect of replacing diesel trucks is as welcome as replacing gas vehicles in the consumer sector. Tesla is now tackling the challenges of transporting large trucking payloads. Others are as well including the recently funded Rivian Automotive and Thor Trucks.

Autonomous Technology: End-to-end autonomous trucking may still be decades away yet the use of autonomous technology in logistics is already live in the warehouse with pilots underway for first and last mile as well as interstate long-haul deliveries. Autonomous delivery startups announced over $1.5 billion in February alone, including Endeavor Robotics, Ike and Nuro in the US and AutoAI, Mogu Zhixing and TuSimple in China. 

Logistics is a vast sector ripe for innovation across the supply chain.  Entrepreneurs and investors have flocked to logistics seeking to disrupt an industry representing over 5% of the US economy. While investment in logistics has increased substantially, funding has focused on major sectors. We believe many opportunities remain for further innovation across the supply chain as new technologies such as robotics, autonomous vehicles and machine learning develop for the logistics sector.    


[i] Stifel analyst report

[ii] Stifel analyst report

[iii] https://www.thestreet.com/investing/xpo-plummets-on-earnings-miss-and-warning-about-2019-14868169

[iv] https://www.prnewswire.com/news-releases/global-logistics-market-to-reach-us155-trillion-by-2023-research-report-published-by-transparency-market-research-597595561.html

[v] May 2018 Techcrunch article

[vi] May 2018 Techcrunch article

[vii] Stifel analyst report

[viii] https://www.nytimes.com/2019/02/14/opinion/amazon-new-york.html

[ix] https://ycharts.com/indicators/ecommerce_sales_as_percent_retail_sales


2019 Manhattan Momentum: 25 Years and Counting

It’s the 25th anniversary of the annual supply chain-centered conference, Manhattan Momentum which boasts an agenda packed with insightful sessions led by some of the most important supply chain movers and shakers across a variety of sectors.

From May 20-23, Manhattan Momentum will draw in more than a thousand global senior supply chain, retail, omnichannel, logistics, press, industry analysts, and innovative partners to network and learn about the latest and greatest trends, innovations, and technologies changing the pace for the supply chain environment. This year’s event will take place at the JW Marriott, Phoenix Desert Ridge Resort and Spa in Phoenix, Arizona.

With a full agenda scheduled, a special Modern Robotics Enabling Flexible Automation session with IDC’s John Santagate will be held on May 22. Other keynote speakers include former NFL player Jon Dorenbos, ULTA Beauty Senior IT Manager Nancy Mclain, IBM’s Senior Offering Manager Jason Tavoularis, and many more leaders speaking on topics such as enterprise management, supply chain intelligence, and 2019 retail opportunities, to name a few.

To review the full agenda and registration information, please visit: manh-momentum.com

ProMat Day Three Combines Education, Awards, and Comedy

Thought leaders, exhibitors, and attendees kept the momentum going on day three of this year’s massive ProMat Trade Show in Chicago, despite chilly temperatures. Wednesday’s education seminars continued addressing some of the biggest industry challenges while identifying key differentiators that foster optimal results and competitive advantage.

One of the most talked about themes at this year’s conference is the major issue of labor shortages. Employee recruitment and retention are among the biggest concerns for industry players. As automation continues reducing unnecessary manpower, human involvement has become a complex role to balance. Topic leaders across multiple sectors have already made it very clear that humans in the workplace continue to be a critical component. Even so, some companies continue expressing uncertainty in how to approach tapping into the labor market.

OPEX Corporation’s John Sauer addressed these concerns head-on in a presentation on Wednesday. Sauer is the Senior Business Development Manager for OPEX and boasts 8 years of front line material handling management experience. In his presentation, Sauer confirmed some of the biggest issues among employees in warehouses are factors some might consider to be small – such as climate control, physical demands, consistent hours, and work independence. At the end of the day, employees nowadays are looking for more than just a salary – they want to feel some importance and pride in what they do.

In today’s technology-centric environment, these factors can be addressed through strategic implementation of the technology at-hand. By utilizing technology for optimizations in operations and creating an environment that supports a positive work environment for employees, retention and recruitment challenges can be alleviated.

MHI Industry Night

Wednesday concluded with a special networking event featuring comedian and actor Craig Ferguson following the announcement and recognition of leading companies for “Best Innovations” and Young Professional Awards. There were 108 submissions for the awards and only four finalists were selected for each category. Among the winners included:

Best New Innovations:

Fetch Robotics for CartConnect

Locus Robotics for Gamification

Attachments for Forklift Safety Device (FLSD)

CMC srl for Pick2Pack

Best Innovation of an Existing Product:

ProGlove for Mark 2 Smartglove

RightHand Robotics Inc. for RightPick: The Piece Picking Solution

Artitalia Group Inc. for Versatile Nesting Cart

Swisslog Logistics Automation for ItemPiQ

Best IT Innovation:

Yard Management Solutions for Eagle Eye Yard Management Software

LogistiVIEW for Vision Pick and Put Wall

Schaefer Systems for WAMAS Lighthouse

KNAPP Inc. for redPILOT

ProMat Day Two: Disruptive Technology and Game-Changing Strategies

Day two of this year’s ProMat Trade Show kicked-off with exhibitors showcasing the industry’s top innovative solutions and another full day of keynote speakers and education seminars – many of which were at full capacity.

Among today’s featured speakers included Raymond Corporation‘s Stacey Patch, Dale Dunn, and Derrick Miller speaking on the importance of optimization efforts before implementing automation into operations. In order for a company to fully grasp the benefits of automation, a deep understanding of potential efficiency must come first. The process of automation should start with a focal point on optimization before investment. Additionally, the company made it clear that before fully replacing, tech and automation will maximize human activity and support operations.

Swisslog Logistics Automation’s made an appearance on stage as well, informing attendees of ways to creating a competitive weapon out of supply chain. John Dillon Vice President, E-Commerce/Retail and David Schwebel Vice President, Business Development and Market Intelligence identified the industry’s biggest challenge of risk and how to navigate through it with strategic, forward-thinking approaches, as seen with their container-based warehousing system providing increased efficiencies and flexibility.

Day three will continue exploring the world of leading logistics initiatives, product innovations, and industry education on topics including removing barriers for improvement, addressing the labor shortage, and smarter packaging technology options.