Luxury logistics

Frederic Parent, Director of Logistics at Bolloré Logistics Pacific reveals the details of moving some of the world’s highest value fashion goods with one of the first-ever 3PL robotics solutions.

The luxury market is large and growing. In 2018, the market grew five per cent, and reached an estimated $1.96 trillion dollars worldwide.

The fastest growing area in this sector is personal luxury goods. According to Bain & Company’s annual study into the luxury goods market, personal luxury goods outperformed the overall market, with six per cent growth in 2018. This growth is projected to continue in the range of three to five per cent per year through to 2025, the Bain & Company report found.

Part of this growth is due to flourishing luxury demand from Chinese consumers, the continued rise of online channels, and increasing influence from younger generations of consumers, Claudia D’Arpizio, lead author of the annual luxury study reveals.

Luxury shopping online has continued to accelerate in 2018, compared with physical channels, with a 22 per cent growth since 2017.

Storing, picking, packing, and distributing luxury goods present a number of unique challenges as well as opportunities to utilise new and innovative technology.

“With luxury fashion, we are talking about a very high dollar value product – so security, accuracy and inventory control are all absolutely critical,” Frederic Parent, Director of Logistics at Bolloré says.

Bolloré recently won the business for a large multinational luxury fashion group’s distribution in Australia. For this particular customer, there was a need to rethink the usual warehousing methods to make way for a much more innovative approach.

“At Bolloré, our philosophy is to customise our solutions for our clients as much as we can. This client was after a very specific profile with a very large number of stock-keeping units (SKU). We wanted to find a solution that had the right level of accuracy and quality expected by the client, while also keeping control of the cost,” Frederic says.

This particular client covers five different brands within the one group, resulting in an even larger number of SKUs. “We are talking about 30,000 to 40,000 different SKUs, but with a relatively limited stock. Additionally, this particular business model operates on a daily replenishment from the main distribution centre in Europe,” Frederic says.

Luxury fashion differs from fast fashion in that there is limited density of stock. “If you think about luxury shoes, you may have 50 or 60 different SKUs because you have that particular shoe in a different size or colour. Each SKU may hold a few pieces of stock and then every day it is replenished from Europe. Once you put that number of SKUs on regular shelving you would have to travel very far to collect the orders. With all of this in mind, we knew that a goods to person solution was the only way we could do this efficiently, safely and accurately,” Frederic says.
In addition, the high value of the products, means that they cannot be stacked. “With numerous luxury brands housed in a single location, and each brand having a unique product range, an error-proof system is vital,” he says.

Goods-to-person solution

Frederic knew he needed to explore a cost-effective solution for this particular client, but with the types of goods in mind, it could not compromise on quality, accuracy and safety. He was familiar with the Cohesio Group, a voice and robotics solutions provider, from a previous role where he worked with the organisation when they were formerly Voice ID.

“I joined Bolloré around 16 months ago, and after a couple of months this project came up and I immediately thought of Cohesio and its AMR solution,” Frederic says.

Before commissioning Cohesio, Arslan Qazi, Heads of Solutions for Bolloré Logistics Pacific looked around at the competition but could not find a competitor to challenge the solution Cohesio were offering.

“Cohesio demonstrated a very good attitude and capabilities in terms of reactiveness. They are an experienced team, thanks to that they can be very responsive and very customer-focused,” Frederic says.

Tim Baracz, Cohesio Group’s Sales Director says the team are very proud of the project timeline and how quickly they were able to implement the solution. “With a compelling offering in the marketplace, efficiency in the order-fulfilment process ensured lower operating costs for Bolloré’s clients. Typically, a project of this nature can take several months from conception to final delivery. This includes proof of concept testing and on-boarding the customer. But we were able to halve that time frame and deliver in four months, a feat of which we are very proud,” he says.

The project entails 28 AMR in the Bolloré Sydney warehouse. “The robots reduce space cost through increasing storage density and minimising the operational cost through its efficient picking and high throughput. The end-to-end data integration ensures faster and more accurate order fulfilment,” Arslan says.

The Bollore team is confident they will reach the targets set with its customer. The project went live in December 2019, and according to Frederic from the first week in February Bolloré has already taken the solution to a high level of transactions. “The solution is very responsive, while it’s a bit early to talk numbers, with the high level of transactions we have seen in recent weeks we are very close to the targets that we have in mind,” he says.

A sentiment that Ravi Nath, Head of Automated Solutions at Cohesio agrees with. “We are thrilled to see the company take the initiative with this type of technology. Payback periods can vary depending on the business environment and the operational nuances but the time frame can be significantly less than the payback period seen with fixed automation infrastructure,” he says.

A first for Australia

This project is the first-ever of its kind here in Australia, and Frederic says it’s been great to see how open to innovation Bolloré as a business is. “I was with the company two or three months when I started this project. I was so impressed that in just a few weeks our local team got the trust and confidence we needed from the company to start working on this,” he says.

“In Singapore, we have a team working on these kinds of innovations, solutions, customisations. We have around 30 engineers who are absolutely innovation orientated. They explore a lot of automation solutions, but on a much larger scale,” Frederic says.

This project was unique in that the automation was required for one specific customer, within a larger 3PL space. “We had to show the team in Singapore that this was the right solution for this customer. They knew about the solution but as they are working on a much bigger scale with more than 200,000sqm of warehousing, they tend to introduce automation that they share across different customers,” Frederic says.

At the site in Sydney, Bolloré services a number of different customers. This solution is agile in that it can be isolated for one customer in one area of the warehouse.

Although the solution was intended for this client alone, after the implementation Bolloré is confident there is benefits to be realised from expanding the solution.

“This could definitely be scalable to include other clients in the future. We currently have 28 AMRs but I could see an opportunity for more robots and more shelves in the near future. We’re even considering shelves on a mezzanine,” Frederic says.

Word of mouth

An added advantage of working on an Australia-first robotics by a 3PL for e-commerce project is the interest that it generated across the larger logistics sector, adding to an opportunity for recruiting talent.

“We recruited most of the team showing them the solution before they started. They knew it was a robotics project for a high-end luxury brand. So the interest for this project was higher than usual,” Frederic says.
For profiles like managers and inventory controllers, Frederic says that there was a lot of interest in these roles. “It’s definitely an attractive solution to show to the market,” Frederic says.

Frederic says the solution really gave Bolloré the edge in coming up with the best option for this client. Through this solution we managed to demonstrate a precise level of accuracy and security that ticked all the boxes for this client,” he says.

For Frederic, this kind of solution has a particular benefit here in Australia. “We all know that Australia is one of the most expensive countries in the world in terms of labour cost. So this really was a game-changer for us to be able to offer our client this level of productivity,” he says.

“This type of solution is a good compromise between the type of investment you have to consider upfront, and the benefit that you get from it. Working with Cohesio we got this crucial balance right, which is why we were able to offer this client the best solution in the market,” Frederic says.

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