Eileen Mozinski Schmidt Dynamic forces in action: A look at the challenges and opportunities in warehousing today
As the nerve center for many material handling operations, warehouses provide an essential role. This month, Material Handling Wholesaler asked a few businesses in the industry about the latest trends in the dynamic environment of warehouse operations.
Warehouse solutions
At LD Systems, a company that helps warehouse operations find solutions, CEO Bob Sutphen said there have been three areas typically addressed recently. Those are space needs, needs to improve productivity, and a desire to cut down on errors.
Sutphen said to address those concerns, LD Systems will first work to determine a company’s culture and customer expectations. “Once we’ve identified that, the next thing we want to do is look at their data,” he said. “Every time we do that, we almost always find things that surprise the customer.”
While warehouse operators often are busy looking at production numbers, LD Systems can help identify areas of improvement, according to Sutphen, who said the company has worked on over 500 projects within 75 to 80 different industries. “We’ve learned what things to look for and what data we need to collect,” he said.
As system integrators, LD Systems works to develop solutions that will address the needs and concerns based on the data.
In the current environment, Sutphen said automating is often advisable. “If there’s an opportunity for automation, we definitely recommend that,” he said, noting one of the problems many warehouses are currently facing is attracting and keeping good labor.
E-commerce continues to grow, but Sutphen said the associated costs burden some companies. “We have developed many solutions that can make people efficient, including reducing shipping costs,” he said, adding that he believes e-commerce will keep expanding. “It opens up all kinds of options,” said Sutphen, noting opportunities for packaging and other ways of reaching the end user.
But while the volume of e-commerce will likely continue on an expansion track, Sutphen added that he expects some moderation in the pace. “People don’t necessarily always insist on next-day delivery,” he said. “There’s been some moderation in that because of the way parcel companies are charging for their services.”
In general, Sutphen said the ideal timeframe for a project with LD Systems is six to nine months. As space becomes more expensive, reimagining existing space is a solution for many warehouses.
“I rarely walk into a facility that we can’t do more in the same space,” Sutphen said. He encouraged warehouse operators to keep thinking in terms of innovation.
“If you don’t do anything, your costs will increase,” he said, adding that each business’ competitors will continue evaluating how to meet the costs and expectations of the environment. “If you want to be one of the leaders, you have to innovate,” Sutphen said.
Efficient and sustainable solutions
With recent studies showing that 67% of organizations have environmental KPIs for their supply chains*, a key area of focus for warehouses is sustainability.
At Enersys, Samuel Shiroff is Senior Director of Global Sustainability.
The global battery manufacturer has set and is pursuing its own climate, energy, and water goals, according to Shiroff, who said the business’ energy use per kilowatt hour of storage is down more than 15 percent and water usage is down 2.5 percent versus 2020.
“We are walking the walk,” he said.
Shiroff noted that when talking about climate goals, there are three areas of focus or scopes.
The first is what is burned, like gas or petroleum. The second is utility-related burns and the third is what is burned in the business value chain.
“Scope 3 is very difficult to measure. Everybody is somebody else’s scope three,” Shiroff added.
At EnerSys, the aim is to reach neutrality on scope 1 by 2040 and on scope 2 by 2050, according to Shiroff.
He said the business’s carbon footprint overall has been lowered by over 4 percent year on year with its Scope 1 (direct emissions) down nearly 25% since 2019. Pursuing sustainability objectives adds value to the company and helps meet the expectations and interests of customers, shareholders, employees, and other stakeholders.
The best people in the world don’t want to work for a company that harms the planet,” said Shiroff.
In addition, such measures meet or exceed emerging regulations.
Shiroff noted that expanding on what regulations demand can be beneficial.
“If you do it just for the sake of compliance, you are leaving value on the table,” he said. “The distance between risk mitigation and opportunity creation is incremental.”
For those starting out in a sustainability action plan, Shiroff recommended prioritizing aspects of each goal.
He added that the internal person or staff working on corporate sustainability can help bring along others in the company. However, there is still a need for those involved to understand the details of what is required.
Those businesses obligated to report to the European Union, for example, which Shiroff noted is estimated as at least 7,000 American companies, there are certain sustainability requirements.
Shiroff noted that despite legal challenges to the new SEC climate disclosure rules, it would be risky to simply assume that they will be overturned.
“The SEC was very careful about what they did,” Shiroff said.
For Shiroff it is clear that energy efficiency is a key area of focus, but eventually, we will meet a point where that is maxed out. He notes that we will always need energy, but we do not need to get it from fossil fuels. Shiroff added that rooftops and adjacent property can be viewed as a key resource.
“And energy sources within warehouses are also key, such as batteries like those offered by Enersys”, Shiroff said.
“Our products themselves enable our customers to reduce their own carbon footprint,” said Shiroff, who said thin plate pure lead batteries are approximately 20 percent more efficient and lithium-ion approximately 25 percent more efficient than lead acid.
“Add to that a more efficient charger and just by switching battery technology you can gain more than 30 percent efficiency in energy cost as well as reducing carbon,” Shiroff said.
Also key in the pursuit of sustainability is knowing what an organization’s corporate goals are, according to Shiroff, who noted telling the story of an organization’s sustainability efforts is another way to highlight the important work of the business.
“Every small thing counts. Don’t be afraid to talk about it as long as you are being accurate” he said.
Flexible fulfillment
At Dematic, the company considers three areas when talking to its customers about automated solutions: resilience, reliability, and flexibility, according to Mike Larsson.
Larsson, president of Dematic and KION Group executive board member, said that during COVID and post-pandemic, the industry has learned how sensitive supply chains are to disruptions. “So, we focus on making sure that we support our customers to create and evaluate alternative scenarios, focusing on optimizing operations with our software platforms and our domain competence,” he said.
Larsson stressed that Dematic supports customers with training and 24/7 operational support and noted that flexibility is key in the current industry. He noted an example of how Dematic designed a fulfillment center for a large retailer pre-COVID.
“At the time, their business model was aimed at 80 percent store fulfillment and 20 percent e-commerce. Once the pandemic hit, their demand profile completely changed,” Larsson said.
“Our system, backed by powerful software, enabled the customer to continue to successfully manage their customer commitments while undergoing a massive shift in order profile,” he added.
Dematic also offers reverse logistics solutions, helping to meet one of the biggest challenges facing retailers today, according to Larsson, who noted that in America alone, returns hit $743 billion in 2023.
He said Dematic’s solutions help with everything from receiving to returns handling to docking. “Our returns handling solution facilities inspections and direct workflows, ensuring each item is returned to inventory accurately,” Larsson said.
Overall, Larsson said what is occurring industry-wide is a rise in flexible fulfillment. “When you think of traditional automation, you’re most likely imaging conveyors, racking, shuttles, and similar technologies that are fixed in place. Today, with the advanced needs of our customers, they are turning to technologies such as Automated Guided Vehicles (AGV) and Autonomous Mobile Robots (AMR),” he said. Essential to orchestrating these technologies is software, Larsson added.
We are at an exciting time in the industry with supply chain optimization being key to so many industries and driving innovation – both commercial and technical,” Larson said. “Partnering with our customers to solve their particular challenges, leveraging our own core strengths, and working with our ecosystem partners, we are well positioned to continue our journey to grow and support our customers across all verticals,” he said.
*Source: https://www.forbes.com/sites/sap/2023/02/06/supply-chain-trends-2023-risk-resilience-beats-transformation-every-day-of-the-year/?sh=18c5e7558160
About the Columnist:
Eileen Mozinski Schmidt is a writer and journalist based in the Greater Milwaukee area. Email [email protected]. If your company would like to be featured, email [email protected]
