Automation and digitalization in logistics

Hosted by Prof. Karl-Heinz Wehking, now retired professor at the Institute of Mechanical Handling and Logistics of the University Stuttgart, seven lecturers from a variety of industries presented the technologies they use to successfully master the massive disruptions they encounter in the logistics sector. Automation and digitalization are crucial tools to anticipate and manage future market developments.

Wehking opened the event with an introduction to the theory of disruptive technologies by Joseph Bower and Clayton M. Christensen. The U.S. economists claim that disruptive technologies are mostly found either at the lower end of the market, or in new markets which show strong growth over time and completely or partially replace existing markets or products and services. Rapid and sudden innovations, shorter product life cycles and agility have a considerable impact on the logistics industry. Start-ups often provide interesting and innovative solutions which can prove to be a benefit to the logistics sector, as new markets usually emerge as a surprise to longer-established suppliers. Automation and digitalization, for example in intralogistics, should therefore be cornerstones of every business model.

Automation potential in intralogistics

Jörg Becker, Managing Director at WLC Würth-Logistik GmbH & Co and Thomas Scherner, Head of Logistics at Adolf Würth GmbH & Co. KG focused their talk on future automation potential and best practice in the field of intralogistics. The interlinking of digitalization, robotics, packaging and autonomous driving is one of the greatest challenges that the industry is currently facing, they claim. While they see robotic picking stations and standardized packaging still in the research and development phase, they find great potential for automation in identification and control systems as well as driverless transportation. With ever-shorter product life cycles and smaller batch sizes automated packaging production and packaging processing can ensure time-to-market optimization.

Developments in B2C trade: from multichannel to omnichannel

Maximilian Molkenthin, Senior Head of Logistics at PUMA SE, talked about the opportunities that their new omnichannel distribution center and the centralization of their European logistics have created for PUMA. The company’s new “Forever Faster” supply chain strategy is designed to help them further accelerate their response times to customer requests and position themselves to fully exploit the expected future growth in B2B and B2C trade. Omnichannel intralogistics is PUMA’s response to future challenges: according to Molkenthin, higher service levels, effective synergies (such as the pooling of warehouses), flexibility and performance (e.g. by automation) are important cornerstones to quickly respond to new market developments. Logistics need flexible and goal-oriented partners, both internally and externally. Other key considerations are security, flexibility, scalability and a state-of-the-art approach.

In general, developments in the online and offline B2C trade are very dynamic. Innovative strategies and processes are major success factors here. Dr. Jan Schneider, Head of Logistics Operations at Tchibo GmbH, gave an insight into how Tchibo keeps its logistics aligned to ever-changing market conditions. Only innovative and sustainable strategies enable the company to coordinate its many different transportation processes efficiently. For instance, reducing emissions is an issue that affects far more areas than just future mobility. Therefore, we continuously have to ask ourselves: are we innovative enough? Are we handling the issue effectively?

Customer focus at the fore

These general questions also bring other subjects such as customers and costs into the spotlight: how much are customers, for example, willing to pay for a service? Optimizing and expanding customer service is crucial. Long-term investment in technology and automation is essential to react quickly and reliably to customer needs. This includes, for instance, the ability to provide the customer with accurate information about a product’s availability and delivery schedule as early as in the order placement phase. Customer satisfaction needs to be ensured at all times. Jan Helbach, Head of Logistics at Häfele GmbH & Co KG, used Amazon as an example to illustrate the challenges of digitalization in modern logistics, with Amazon’s logistics services fundamentally shifting the baseline of customer expectations. Goals and measures such as short delivery times (transportation times and distances), later cut-offs (shorter throughput times, consignment warehousing), SAP EWM warehouse control (warehouse management in line with shipping dates) must always be aligned to these new heightened expectations. Companies who prioritize topics such as change management and digital transformation give themselves a clear competitive edge here.

Artificial intelligence as the driver of the future

Concluding this informative event with his talk on “disruptive changes in logistics through artificial intelligence”, Professor Kai Furmans from the Karlsruhe Institute of Technology (KIT) addressed the question: what becomes reality – what stays a vision? It is technological drivers that are making artificial intelligence (AI) conceivable in the first place. Therefore, disruption is all about artificial boundaries being lifted, products and services dematerialized and resource bottlenecks eliminated. Nowadays, learning is more important than programming, which is why cooperation across disciplines is extremely important. Topics such as deep learning and optimization methods in artificial neural networks play a significant role in artificial intelligence. The fact that this requires large amounts of data is at the core of many Big Data applications. This is why companies like Amazon, Google, Facebook and Apple have an enormous head start in B2C trade. Thomas Kilimann, Managing Director and Partner at
io-consultants, concluded these valuable insights with his own observation that he, too, has noticed an increased pace in IT developments, especially in North America: “Trying new things takes a lot of courage. We also need to start just trying new things because only then we can extract learning from the mistakes we make while trying.” This raises the crucial question of when AI will be introduced into the industry. We are looking at about five to six years in the case of image recognition robotics. However, business and planning strategies can already be mapped and used right now with the help of so-called digital twins.

In addition to the talks and presentations, the participants had the opportunity to use our subsidiary io-DigitalSolutions’ interactive terminals to test the latest pick-by-vision and pick-by-voice solutions from our partners Picavi and Topsystem. io-consultants also showed how virtual reality can be used to optimize planning processes. Warehouse and production structures can be presented virtually, making it possible to identify and correct weak points as early as during the planning phase.

For some impressions of the event, see our picture gallery and our short movie.