As we enter the e-commerce age of fulfilment, John Butera, Logistics Automation Manager at SICK Australia presents some innovative solutions for revenue recovery.
Last year, Australia Post opened the largest parcel and mail facility in the Southern Hemisphere. The Brisbane Parcel Facility is able to process 700,000 parcels per day at full capacity. The facility boasts two high-speed sorters that are capable of processing over 50,000 parcels per hour.
With the rise in e-commerce there has been a huge increase in the volume of parcels, as well as a decrease in the size of parcels, John Butera, Logistics Automation Manager at SICK says.
“We’re really in the e-commerce age of fulfilment now. The packages have completely changed, they are much smaller than they used to be, many are more like a satchel than a parcel,” John says.
This shift to a much smaller parcel presents some challenges for any logistics provider involved in the movement of goods. One area that SICK is improving the process for sortation facilities is through a variety of different sensors, with a particular focus on revenue recovery.
“When we talk about sensors in this area, we refer to both basic sensors as well as the more advanced kinds. What we would typically refer to as a basic sensor is now a lot smarter than it used to be. They now have the ability to communicate with much higher-level control systems,” John says.
In a sortation facility there are parcels with different surface tension, size, colour and weight – sensors help organisations ensure that they are identifying and tracking these parcels accordingly.
“The role of a sensor is to make sure that products are detected accurately and efficiently. With e-commerce, products are now being sorted and charged right down to the individual item, it is more important than ever to ensure that they are scanned accurately,” John says.
Industry 4.0 capabilities
For John, a key principle of Industry 4.0 is trying to gather as much data and information as possible. “Even the much simpler sensors we offer now have the communication protocol to talk to high level controls,” he says.
One area that SICK is offering solutions with regards to revenue recovery process is with Dimensioning Weighing and barcode scanning Solutions (DWS). “This system provides efficiencies in this process of determining the parcel identification, weight and dimension in one step,” John says.
A common problem with parcels is that they need to be recalculated or recharged. Sometimes they could be reported into the DC at a certain size but when they go through the system it turns out its much bigger, or even heavier, John says. “When it goes through this system, it’s redetected, profiled and declined at that particular booking rate and there is a billing process – without this level of detection there would be revenue loss.”
It’s not just about the revenue recovery process, John says, but also about efficiency gains. “It helps the industry to build the business, once these kinds of supply chain processes are in place the entire system can run much more efficiently,” he says.
The requirements of e-commerce have made DWS more important than ever. “If you have a huge box that only weighs a few kilos, then you will charge it according to its weight if you only have a weighing system. But once you have a dimensioning system, you can look at whichever one is greater and then charge it accordingly,” John says.
SICK has also recently released the VMS5200, with this dimensioning sensor using laser technology a parcel that is less than 50mm in height can now be measured down to 20mm as a legal for trade device.
“Previously, any parcel below 50mm in height could not be measured and revenue recovery was not captured. Now organisations have the capability to measure a parcel below 50mm, so again there is that revenue recovery benefit,” John says.
Further advances in the DWS arena can now be realised with camera technology. “Camera technology is able to read much poorer quality barcodes than laser technology,” John explains.
For the likes of TNT and Australia Post, this can be of huge benefit. “If a parcel comes through the system, but is not identified, an image is captured and then goes to a server where its processed further by video coding or optical character recognition (OCR). The postcode can be read, either manually or by software, and then ensures it goes to its destination,” John says.
This also helps reduce the rejection rate, also increasing efficiencies. “A no read and an increase in reject rate can really slow things down – with sometimes 100s of parcels needing to be manually sorted. If you have the capability to reduce this, you can really improve efficiency across your entire process,” John says.
Traceability and data collection
With the increase of traceability requirements, it’s even more important to know where a parcel is at all times, John says. “Once a parcel gets processed it then travels along a conveyor, being constantly scanned. Sensors allow the parcel to be checked numerous times and that information can be fed back to the consumer, enabling them to have total visibility of where their parcel is and when they can expect delivery.”
A further area that SICK has recognised a benefit for sensors in a logistics facility is in the monitoring of crucial parts of the operation, such as conveyors. “In some of these facilities they have metres and metres of conveyors running at high efficiencies, sometimes 24 hours a day. We have recognised that by placing sensors along these conveyors you can significantly reduce downtime and breakdown costs,” John says.
The sensors John is referring to monitor velocity, vibration and temperature and determine what kind of effect a high level of frequency has on the entire system. “Our sensors can provide some kind of preventative notification that informs that the conveyor needs some attention before it breaks down,” he says.
SICK also recognised that when it comes to e-commerce, some organisations may not have the requirement for the full DWS system at first, but as they grow it is easy to add on different features.
“Our DWS solutions can be scaled accordingly, we always ensure that we are backward compatible. We build our systems so that they are modular so if someone was starting off and they just needed a sortation system for scanning, we can then provide the solution and later on down the track if they need to capture revenue loss we can add dimensioning as well as a scale,” John says.
As organisations operating in the e-commerce sector range from large-scale retailers to small start-ups, having the ability to scale up with this kind of technology is a huge advantage, John says.