< PreviousSPECIAL REPORT | HANDLING CARGO 30FEBRUARY 2020 | LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com WAREHOUSING FOR THE FUTURE Technology leads the way in effi ciency, safety, and accountability This month’s Special Re- port looks in-depth at the benefits and chal- lenges brought about by new warehousing technologies. We speak to both the end-users, and the technol- ogy companies that are revolutionising warehousing. “By 2020, an estimated 25 billion smart devices — ranging from home thermo- stats, appliances, and cars to innovative software and commercial equipment — will assist businesses in becoming more intelligent and connected to the world,” according to a Socialnomics report. This surge in connected devices means more accountability at all levels of the supply chain, better insights into operations, and operational challenges, as well as increased efficiency. Many are calling this the ‘next indus- trial revolution’, because such huge and widely-felt changes are gripping indus- tries at all levels. For example, in the warehousing sec- tor, robots are doing the jobs of humans, sorting, picking and packing. Warehouse control systems are becoming more and more common, these systems control every intelligent connected device with- in the warehouse and can be controlled Robots are the new warehouse workers. Photo by Al e x Knight on Unsplash from a handheld device. These con- trol systems can speed up processes, and improve just about every aspect of operations. Even something as simple as intro- ducing barcode scanning technologies, and RFID systems can exponentially improve operational efficiency. Mobile workstations, and cloud computing, although older technolo- gies, are reducing errors, and enabling better operational insights. These are just a couple of examples of how warehousing is revolutionis- ing, this special report in the following pages will look at even more. A future in robotics and fulfilment 2018 to 2019 to kg t m/s m/s Emissions + km minutes for a 14 – 12hour shift 31LOGISTICS MIDDLE EAST | FEBRUARY 2020www.logisticsmiddleeast.com32FEBRUARY 2020 | LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com Technology is an ever-evolving concept and the fast pace of its change, will ultimately influence the next generation of future ware- houses. From drones to 3D printing, social and technology changes will continue to pile pressure on supply chain managers to move goods closer to consumers and develop ‘smart warehouses’ with the flexibility and speed to support local, faster delivery through its multiple channels. Swisslog’s latest report on the ‘Planning for the warehouse of the future’ provides key insights on the major social and technology trends that will shape the warehouse of the future. The ageing and urban population to influence how prod- ucts are stored and distributed The ageing population is one factor that will have an impact on change consumption and spending behaviour impacting production, logistics, warehousing and retailing. Moreover, the global middle class is projected to double by 2030 reaching nearly five billion people, resulting in more purchasing power and greater access to information and communication technologies. Consumers who buy online tend to return items at a higher rate than those who shop in stores. Online buyers expect minimal delivery fees, easy returns, and quick fulfilment thanks to Amazon and other e-commerce giants. What this means for warehouses is that they not only feel pressured to lower their costs and improve delivery, but they must be prepared to accommodate increased returns. Lastly, experts predict that the urban population is expected to pass six The next generation of smart warehouses Got something to say? If you have any industry comments to make please e-mail: georgina.ford@os.itp.com OPINION | ALAIN KADDOUM By Alain Kaddoum, general manager, Swisslog Middle East COMMENT billion by 2045, impacting where goods are produced and consumed. Emer ging technolo - gies will play a signifi- cant role in shaping the warehouse of the future By 2030, it is likely that drones will play a major role in the supply chain industry allowing all consumers to receive the same two-hour delivery window. 3D printing will also sig- nificantly change the way many products get to market. The influx of 3D printing will see a radical decrease in distribution and transporta- tion costs, and can help im- prove manufacturing, distri- bution, prototyping and event design. The use Autonomous Guid- ed Vehicles (AGV) is also pre- dicted to grow significantly in the next ten years. As technology progress- es, advances in sensors and electronics will allow AGV to move faster, even when interacting with people. Mobile robotics will reduce the cost of unskilled labour in warehousing operations, while businesses can gain more value through up-skill- ing their workforce in man- agement roles. As warehouses enter the robotics revolution, warehouse managers can ex- pect to experience greater accuracy, and faster pick- and-load abilities. Industrial IoT networks will soon also become an essential compo- nent of efficient warehouse management as they provide the connectivity and data that the smart warehouse will de- pend on. Big data programmes are already shaping everything from marketing to forecast- ing, they will also drive key advances in logistics, such as the predictive shipping mod- el and will enable machine learning as the integration of real-time and historical data will allow machines to continually improve their op- eration based on past actions. The new urban distribution centres of 2030 The surge in online shopping is making it more and more important for warehouse fa- cilities to be located in closer proximately to large cities. The urban distribution cen- tres (DCs) of 2030 will need to hold inventory and be con- figured to support same-day delivery or customer pickup through some combination of autonomous vehicles, robotic picking and loading, drones and mobile pickup points. Big data and smart, self- learning analytics will predict what consumers will be or- dering to minimise inventory, and that will create additional product movements. It is likely that technology advances, such as self-driving trucks and robotic loading and unloading systems, will minimise the costs of those movements. BY 2030, IT IS LIKELY THAT DRONES WILL PLAY A MAJOR ROLE IN THE SUPPLY CHAIN INDUSTRY ALLOWING ALL CONSUMERS TO RECEIVE THE SAME TWO-HOUR DELIVERY WINDOW.” ALAIN KADDOUM, GENERAL MANAGER, SWISSLOG MIDDLE EAST33LOGISTICS MIDDLE EAST | FEBRUARY 2020www.logisticsmiddleeast.com OPINION | ALAIN KADDOUM The new urban DC will need to support customer pickup, and a network of mobile pick-up points. Mobile pickup points would also need to be filled quickly with multiple parcels at the community warehouse and then driven to a spot even closer to the consumer (e.g., shopping mall parking lot) where consumers would pick up their parcels. The need for increased au- tomation in the warehouse The warehouse automation market in the Middle East re- gion was reported at USD$0.5 billion in 2018 and is set to grow on the back of strong macro and industry growth drivers to USD$1.6 billion by 2025, at a CAGR of 17.5%. Another report by DHL indicated that 80% of ware- houses in the region are still manually operated with no supporting automation at all. By integrating the automa- tion elements for pivotal tasks such as receiving, material movement, sorting, picking, merging, conveying, pack- ing and shipping the goods a company reduces the chance of human error, lowers the risk of injury, optimises the output, reduces the overhead, adds flexibility to the hours of operation, and allows them to be more accurate in assessing their workforce requirement. Distributing warehouse capac- ity across multiple small centres within a city that directly interacts with consumers does introduce the challenge of increased volatility on DC demand. At the same time, the aging population, labour shortages and new labour regulations will all require a higher level of automation inside these DCs. 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 way beyond their current ability to adapt. The solutions emerging today in terms of Au- tonomous Guided Vehicles, automated pick- ing 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 warehouse. Alain Kaddoum, general manager, Swisslog Middle East34FEBRUARY 2020 | LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com A quick look into the history of warehouse management tells us that it was once a very paper-intensive process, heavily reliant on human beings to co-ordinate the multitude of activities that take place within the warehouse. However, ever-rising customer expectations, e-tailing/omni-channel and the pressure of quicker delivery times, increasing operational complexity along with the unprecedented advancement in smart technologies call for smart warehousing management systems, empowered by the Internet of Things or IoT. According to a warehousing study undertaken by Zebra Technologies, IoT devices are consid- ered one of the most advanced tech investment priorities How smart tech can transform warehousing Got something to say? If you have any industry comments to make please e-mail: georgina.ford@os.itp.com OPINION | DR. SHEREEN NASSAR The use of smart technologies in a warehouse can bring about several operational benefi ts to businesses by Dr. Shereen Nas- sar, global director of Logistics Studies and the director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai COMMENT in warehousing. Along with Smart technologies such as robots, smart glasses, arti- ficial intelligence, machine learning, cloud technology, augmented and virtual real- ity, drones and autonomous vehicles, IoT has transformed traditional warehousing sys- tems into smart ones. In fact, a study by Zion Market Research states that the rapidly growing global warehouse automation mar- ket was valued at approxi- mately $45.7 billion in 2017, and is expected to reach ap- proximately $101.66 Billion by 2024, at a CAGR of around 12.1%. Smart tech brings with it a host of benefits for busi- nesses, and Dr. Shereen Nas- sar, Global Director of Logis- tics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai provides an overview of how it can transform warehousing as we know it. Cost effective Despite the fact that ware- houses are crucial to business operations, they represent approximately 20% of total logistics costs. Automation can help reduce these costs and improve efficiency. While there may be a large initial investment that is required, the use of smart technologies can prove cost-effective in the long run. For example, the use of warehouse man- agement system (WMS) to replace paperwork can help reduce labour costs while boosting productivity, as well as offer critical insight into operations which can then be used to make quantifiable im- provements. Similarly, the use of smart technologies such as sensors technology and Radio Frequency Identifica- tion (RFID) along with IoT allow networked devices to use information to optimise tasks – for example, lighting management that can dimin- ish energy costs. In addition, the use of sensors and RFID technologies allow real time visibility of the location and progress of inventory that en- sures streamline operations and enhance both accuracy and efficiency. Impr o v ements in productivity Smart tech can boost pro- ductivity in a warehouse in several ways. It can mean that goods are moved much faster, more accurately and cover larger spaces as compared to manual labour. Artificial in- telligence solutions enhance pick efficiency and accuracy. Smart tech such as robotic automation helps businesses achieve greater productivity, as robots can work continu- ously without needing to take a break unlike human work- ers. We are already seeing a shift in this direction – in fact, a recent report by mar- ket intelligence firm Interact Analysis states that more than SMART TECH SUCH AS ROBOTIC AUTOMATION HELPS BUSINESSES ACHIEVE GREATER PRODUCTIVITY, AS ROBOTS CAN WORK CONTINUOUSLY WITHOUT NEEDING TO TAKE A BREAK UNLIKE HUMAN WORKERS.” DR. SHEREEN NASSAR, GLOBAL DIRECTOR OF LOGISTICS STUDIES AND THE DIRECTOR OF THE M.SC. LOGISTICS AND SUPPLY CHAIN MANAGEMENT PROGRAMMES AT HERIOT-WATT UNIVERSITY DUBAI35LOGISTICS MIDDLE EAST | FEBRUARY 2020www.logisticsmiddleeast.com OPINION | DR. SHEREEN NASSAR 580,000 fulfilment robots will be deployed in warehouses by 2023. Similarly, accurate order fulfilment is one of the most crucial steps towards establishing customer loy- alty and growing a business. Smart technologies used for picking, transport and deliv- ery ensure higher levels of ac- curacy and drive productivity. Two drones, for example, can do the work of 100 humans over the same time period, according to supply chain specialists. Another smart technology – smart glasses or vision picking – can boost order picking productivity by 15% on an average. For example, smart glasses al- low warehouse labour to see visual displays of the instruc- tions of order picking along with item location informa- tion on visual displays on the smart glasses. Finally, smart tech enables better inventory accuracy, something that has a direct impact on productiv- ity and permits businesses to focus on other more critical aspects of the business. Improving space utilisation Warehouses cost money to operate. The costs of land, building, equipment, labour and storage can be high. Therefore, in the warehous- ing business, big does not always mean better. The use of smart tech can help businesses make the most of smaller spaces, which keeps inventory visible and easy to find. By deploying the right technologies for space utili- sation, businesses may even find they do not need as large a warehouse as they had been using. Research suggests that smart tech can ensure ware- houses use up about 40% less floor space than the tradi- tional warehouses. Create a safe working environment Apart from productivity benefits, smart tech can also keep warehouse workers safe. Some examples are as follows: RFID tags and sensors are capable of issuing proximity warnings if a worker strays close to unsafe areas such as the path of a forklift, robots can perform tasks deemed dangerous for humans includ- ing those which can cause repetitive strain injuries and drones can be used to com- plete tasks which require workers to scale ladders, increasing their chances of a fall. Reports indicate that nearly 1.8 million warehouse work- ers every year suffer from er- gonomic injuries caused by improper lifting practices and smart tech can significantly reduce this. Environmentally friendly Apart from the above obvious benefits, smart tech can also bring about several environmental benefits with regard to land use, energy consumption and waste production, including hazardous waste. It can enable smart storage, which means smaller physical footprint, thereby requiring less in the way of land. It can also bring about energy savings – for example, intelligent WMS platforms which optimise workflows to reduce energy use. Finally, the use of smart tech can bring about waste reduction, a common sustainability goal for automated warehouses. Some ways this happens are as fol- lows: less use of plastic shrink wrap for automated pallets as opposed those handled manually, and reduction in picking errors, meaning less returns, less wasted energy use, trans- portation, associated emissions, and fossil fuel consumption. Dr. Shereen Nassar, global director of Logistics Studies and the director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University DubaiFEATURE | FUTURE OF WAREHOUSING 36FEBRUARY 2020 | LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com Warehousing is undergoing a sea-change with the introduction of drone technology, automation, and robotics. Zebra Technologies, Landmark Group and LogSquare share their expertise on what the new world of warehousing will look like THE FUTURE OF WAREHOUSING LogSquare has observed technological advancements in supply chain at large, and in warehousing. FUTURE OF WAREHOUSING | FEATURE 37LOGISTICS MIDDLE EAST | FEBRUARY 2020www.logisticsmiddleeast.com which shows that consumers expect faster delivery times, and this is impacting ware- house operations – 46% of survey respondents say this is the main driver behind their growth plans,” said Hozefa Saylawala, Middle East di- rector, Zebra Technologies. There is a strong commit- ment to invest in warehouse modernisation projects in the region, and Zebra technolo- gies’ survey shows that 80% of respondents are investing in technology to stay com- petitive, and that augmenting workers with technology is the best way to introduce au- tomation into the warehouse. Just under three quarters (70%) of survey respondents are plan- ning to do this by giving staff new mobile devices. “Worker morale improves when they have devices that are instinctive, easy, and com- fortable to use, and which also reduce the training time re- quired – especially important with temporary and seasonal workers,” noted Sayalwala. Over the past couple of dec- ades, LogSquare has observed incremental improvements, and technological advancements in the supply chain at large and in specifically in warehousing. Warehouses have now evolved to become fulfilment centres. The regional logistics sector is undergo- ing rapid and transformational chang- es; bringing in smart technologies, robotics, and more - to increase pro- ductivity, accuracy, and competitive- ness, while reducing down-time, and improving processing times, and boosting safety. The two main areas where smart tech is impacting warehousing are; how goods are physically moved, and how the decisions are made on which path to move goods on. i.e. the physical automation in warehouses to operate at much higher speeds, volumes and fl ex- ibility, and the algorithms that are optimising both movements and decisions. “The regional retail sector is undergoing rapid transformation in an effort to remain competitive, and respond to the demands of consumers for a more omni-channel approach to shopping, and as e-commerce gains more traction, this is putting pres- sure on warehousing and logistics. This is reinforced by one of the key findings from Zebra’s 2024 Warehouse Vision Study, FEATURE | FUTURE OF WAREHOUSING 38FEBRUARY 2020 | LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com The changes in warehousing were not specifically triggered by smart tech, according to LogSquare, but by disruptors in the MENA region, such as e-commerce, omni-channel, reverse logistics and on demand deliveries. However, smart technologies played a role in re-shaping the sector’s capabilities and composure. “Warehouses are, and will continue evolving in terms of the tasks they perform, personnel qualifications and technol- ogy they embrace to ensure they cope and fulfil. The typical warehouse process has witnessed changes. Activities pertain- ing to VAS [value added services], sorting, consolidation and reverse logistics have gained importance and are more focal. The qualifications of warehouse personnel have changed. Technology savvy professionals are solicited, and compose a higher number of the human capital. THE REGIONAL RETAIL SECTOR IS UNDERGOING RAPID TRANSFORMATION IN AN EFFORT TO REMAIN COMPETITIVE AND RESPOND TO THE DEMANDS OF CONSUMERS FOR A MORE OMNI- CHANNEL APPROACH TO SHOPPING, AND AS E-COMMERCE GAINS MORE TRACTION.” HOZEFA SAYLAWALA, MIDDLE EAST DIRECTOR, ZEBRA TECHNOLOGIES LOGSQUARE OUTLINES AUTOMATION BENEFITS Hozefa Saylawala, Middle East director, Zebra TechnologiesFUTURE OF WAREHOUSING | FEATURE 39LOGISTICS MIDDLE EAST | FEBRUARY 2020www.logisticsmiddleeast.com Group, one of the largest vol- ume movers, warehouse au- tomation gives the benefit of being able to handle volumes at speed. Automation also gives the flexibility to handle different combinations of in- bound-outbound movements such as pallets to cartons or pieces, or vice-versa which is valuable not only for retail but a lot of other industries. “You need scale, capability and investments to handle auto- mation that organisation with smaller volumes may not have. We have hence started a third party logistics service through which we provide the benefits of automation to other parties. We have invested in automation so others don’t have to – and still they can use the benefits of automation,” he stated. The Zebra Warehouse Vision Study 2024 indicates that 94% of repetitive tasks still require human involvement but, there is clearly a push to accelerate automation in warehouses. Specifically on robotics, by 2024, 30% of survey respondents plan to use robotics (up eight per cent from today) in order to improve overall efficiency and worker productivity. “Robotics will not replace people and automation generally will not eliminate jobs but will help to augment human perfor- mance and capabilities - team and individual worker produc- tivity is a stated goal for the majority of survey respondents. Workflows that are currently executed by workers will shift toward execution through intelligent automation. Tasks that require walking will shift to robotics solutions such as in the warehouse. Of course, one of the great advantages of robotics is that it not only enriches tasks with assisted and augmented reality technologies but also creates a more rewarding working environment for people, which helps attract and retain talent within the sector,” said Saylawala. According to Shah, it is easy to talk about latest tech, but the key is to apply it in the right places for customer experience and business benefit. “Instead of being enamoured by hype, we are continuously looking for smart applications in our logistics. In our Saudi Arabia Home Centre furniture warehouse, we are using auto— driving/guided vehicles that put-away and pick furniture on Smart tech is applied in warehousing in general yet typically justified in some key functions like picking, VAS, and sorting,” said Jacques Adem, co-founder & MD LogSquare. Warehouse robotics According to Mihin Shah, chief supply chain officer, Landmark INSTEAD OF BEING ENAMOURED BY HYPE, WE ARE CONTINUOUSLY LOOKING FOR SMART APPLICATIONS IN OUR LOGISTICS. IN OUR SAUDI ARABIA HOME CENTRE FURNITURE WAREHOUSE, WE ARE USING AUTO— DRIVING/GUIDED VEHICLES THAT PUT-AWAY AND PICK FURNITURE ON THEIR OWN. IN OUR DUBAI MEGA DC, WE ARE USING ADVANCED SHUTTLE SYSTEMS TO BRING ‘GOODS TO PERSONS’ TO EXPONENTIALLY INCREASE PRODUCTIVITY OF WAREHOUSE TEAMS.” MIHIN SHAH, CHIEF SUPPLY CHAIN OFFICER, LANDMARK GROUP THE BENEFITS AND DRAWBACKS OF WAREHOUSE ROBOTICS There are many benefits of robotics and warehouse auto- mation. We will look at three key aspects: On demand fulfilment - Robotics can work around the clock and have a proven track record of accuracy and speed. This ensures a predictable response time within the facility. Visibility and Data - Robotics execution software will ensure visibility throughout the supply chain process. Cli- ent and Logistics team will be able to track and trace and most importantly plan their activity. Space - Space is one of the key advantages of Robotics. With a growing number of cities, transport challenges, land scarcity and cost there is a tendency to increase micro fulfilment centres. Warehouse robotics can easily adapt in smaller spaces and volumes while maintaining Any robotics or automated application should be treated as a solution. An automated/robotic system will in itself be a draw back if deployed or marketed as a product rather than a solution. A solution is a response to a need and should be configurable to the end user way of doing things. - Source: Jacques Adem, co-founder & MD LogSquare Mihin Shah, chief supply chain offi cer, Landmark GroupNext >