Automation, one of trends for logistics

During an Infor supply chain webinar, logistics company, Li & Fung Logistics (LFL) and warehouse automation company (Geek Plus), share how they adapted during the pandemic by facilitating social distancing among workers.

One of the key responses that LFL’s Senior VP Jacky Siu highlighted was communications at the very beginning of the pandemic crisis. Centralisation of data and data dissemination was crucial, and besides keeping in contact with local governments and distributing personal protective equipment (PPE) to staff, a handbook was prepared for distribution to internal employees as well as overseas organisations and customers.

Jacky said, “For LFL, we are still very focused on operations as a logistics service provider.” To ensure adherence to safety guidelines, virtual warehouse tours were leveraged during sales pitches to customers.

When the coronavirus outbreak happened, the company arranged for office staff to work from home.

“However, from an operations point of view, we can’t ask our operators to work from home because they do physical work at the distribution centre,” Jacky said.

Social distancing guidelines were addressed by reducing the headcount the number of workers and using a more flexible duty roster to minimise headcount numbers in the warehouse.

Meal breaks and even bathroom breaks were scheduled for batches of workers, so the cafetaria and restroom areas always accommodated the minimum number of people.

“We also do a lot of sanitisation within the work place, and this helps a lot (for a) distribution centre’s operations environment,” Jacky shared.

 Automating warehouses

Geek Plus MD, Lit Fung had interesting figures to share when it comes to use of robotics in the warehouse as well.

He had noted at first about the increase of home-based items and groceries from from consumers on offline as well as online platforms. He observed a shift in consumer behaviour from purchasing offline to purchasing online.

Lit Fung said, “Global data reports show the exponential growth of e-commerce’s contribution to GDPs. It also hints at a complete review of warehouse and production processes, whicn in turn hints at a desire for automation.”

Geek Plus offers AI and automation solutions, with its picking solution being their largest solution deployed in the market, at over 2000 projects globally. Lit Fung claimed that in an order fulfilment use case, this solution has potential to save 60-percent of labour costs.

Looking to a customer in an omni-channel environment, he pointed out how this ‘business partner hired 96 pickers for manual operations in the warehouse, to handle 49,000 orders per day.

“After deploying our solution, they only needed 26 pickers complemented by 100 robots to handle the same amount of orders. That’s almost 70-percent labour cost savings,” Lit Fung pointed out.

During the outbreak, and with 50-percent more orders coming in from online channels, there were more orders to fulfil at the warehouse as well. Lit Fung pointed out, “But they only needed to add 3 robots and 9 labour headcount to handle the increase.”

What Lit Fung wanted to highlight was the incremental cost required to scale out their picking operations. Due to the pay-as-you-use nature of the robots service, there was no need for costly capital expenditure, only a rental fee. The consumption-based model also meant the picking operation could scale up or scale down according to the peaks and lows of online shopping seasons.

Lit Fung said, “There is a short-term leasing option during peak seasons. And Geek Plus offers a flexible service model which can help to reduce capital investment with a robot-as-a-service (RaaS) model.”

He believes businesses of any size and scale are enabled to access autonomous mobile robot (AMR) solutions to simplify smart logistics deployment, and that “automating your supply chain is an urgent business topic for your business to prepare for a post-COVID world.”

Future trends

Increasing use of AI and automation aren’t the only things we will see more of in the supply chain industry.

Rising tensions around US-China trade, and the exposed fragility of  supply chains by the pandemic have given rise to conversations about onshoring manufacturing and the need for more supply chain visibility.

Li & Fung Logistics has networks in multiple verticals but especially in the footwear and apparel industry, according to Jacky. “We are a company that’s very focused in Asia market. All in all, (we have presence) in around 46 cities across over 20 countries.”

He also wanted to point out research which says by 2025 a majority of megacities of the world, would be located in Asia, “which will benefit Li & Fung Logistics.”

Jacky said to EITN, “The economic growth engine will shift to Asia region, driven by China.”

The City Economics Database reveals that megacities were home to nearly 8.35-percent of the world’s population and contributed 15.50-percent to total global GDP in 2018.