Global warehouse robotics market to be worth $8bn by 2025

The global warehouse robotics market is expected to reach AUD 8 billion by 2025.
The increasing importance of automation in the manufacturing sector is driving the market for robotics across the globe, according to a recent report released by Hexa Research.
The products find utility as material handling equipment in various industries including automotive, food & beverage, pharmaceuticals, electronics, oil & gas, construction, and e-commerce.
Robots fit in well as companies look for ways to bring in operational efficiency by improving inventory control and increasing labor efficiency to reduce lag time in order processing. The focus on optimising warehouse operations has gained more importance with an ever-growing e-commerce industry, where effective backend operations play a critical role.
The automation in the manufacturing sector with the help of warehouse robotics systems has made picking, moving, labelling, and packaging processes easier and efficient. These systems also enable firms to achieve the global quality standard at a fast pace through the process quality monitoring robots.
The rapid growth of the electronics industry in emerging economies including, China, India, and Taiwan is fuelling the market for warehouse robotics. For instance, the new product launches by the leading electronic companies including, LG and Samsung on white goods including, smart LED TVs is expected to have a positive impact on the market.
The automation of production processes through the inclusion of warehouse robotic systems has resulted in improved efficiency, consistent quality, minimal maintenance costs, and safe operation. Sometimes the sorting and assembling of the miniaturised electronics are not feasible for the human. The mobile robots are proved to be highly important and useful for performing such a delicate task and it gives a better quality of the product.
Over the past few years, the automotive manufacturing firms have been increasing spending towards the utilisation of warehouse robotics systems for the movement of finished four vehicle products. As of 2017, the U.S. and China were the major manufacturers of automotive across the world. The number of robots installed in these two countries has increased considerably over the years. The major part of the U.S. and China’s robot order goes to the automotive industry.
In the automotive sector, robots are mainly used in for laser cutting, palletising, CNC machines, welding, plasma cutting, press machines, and BIW welding lines. Robots are also gaining popularity in the painting operation. There are few automotive companies are aiming for complete automation of the manufacturing process with the help of the warehouse robots in their production plant. Thus, the automotive industry is expected to remain a lucrative application segment for warehouse robotics market.
Some of the key manufacturers in the robotics market include ABB, KUKA AG, FANUC Corporation, Yamaha Motor Co., Ltd, Amazon Robotics, YASKAWA Electric Corporation, Locus Robotics, OMRON Corporation, Fetch Robotics, Inc., IAM Robotics, Honeywell International Inc., and IBM.
Over the past few years, these key players have opted for M&A activities in order to expand their business. The small players of this market are also expanding the business by entering into the new region. For instance, GreyOrange, an Indian startup company, has expanded its business to the U.S., Japan, Singapore, and Germany.

Welcome to the future – from MHD magazine

Michiel Veenman

What will the warehouse of 2030 look like? 12 years may not sound like a long time, but with the pace of change being faster than ever before, companies need to start planning now, in order to keep up with ever-increasing market demands.
As people begin to have more disposable income and higher expectations for fast delivery, existing distribution networks may be stretched beyond their capacity to adapt.
E-commerce is a key driver for logistics and warehousing technology as consumers expect rapid responses to order placement. Technology is being driven to pick smaller quantities at an increasing rate.
It’s crucial for the supply chain, logistics and warehousing industries to examine current trends and see how they can best adapt to the changing needs of the market.
Trends in society
The goods that make their way through supply chains ultimately end up with consumers, and consumers not only drive demand, but set expectations for delivery. That makes it valuable to quickly review the macro changes occurring in society as we consider the warehouse of the future. Major trends include:

  1. Aging population

In the coming years, global demographics will change due to increasing life expectancy, declining fertility rates and rising levels of education. The number of people older than 65 is expected to double in the next 25 years, reaching 13 per cent of the global population. This will impact global productivity, personal savings and the labour force. It will also change consumption and spending behaviour on a global scale, impacting production, logistics, warehousing and retailing.

  1. Expanding middle class

The global middle class is projected to more than double between 2009 and 2030, rising from less than 2 billion to nearly 5 billion people. The middle class will then account for 60 per cent of the world’s population (ESPAS, 2015, p.19). Formerly poor populations, while still lagging behind developed countries, will have more purchasing power and greater access to information and communication technologies, and enjoy greater mobility (ESPAS, 2015, p.20).

  1. Urbanisation

Urban population is expected to pass 6 billion by 2045. In 2015, 54 per cent of the world’s population was living in cities; by 2050, that will reach 66 per cent. It is predicted that by 2030, the world will have 41 mega-cities with 10 million inhabitants or more. These developments will impact where goods are produced and consumed.

  1. Growth of the sharing economy

Uber, Airbnb and TaskRabbit are examples of the rapid emergence of the sharing economy. According to PwC, the five key sharing sectors — travel, car-sharing, finance, staffing and music/video streaming — have a potential to generate global revenues of $335 billion by 2025 (PwC, 2015). The concept is already being extended to the construction industry and sharing will eventually come to logistics with its heavy assets and infrastructure.

  1. Globalisation and de-globalisation

Globalisation is the increased movement of goods, capital and workers across national boundaries. Today it is common for companies to develop a product in the United States, manufacture it in China and sell it in Europe or Africa. Some experts also note the value created by the global flow of data and communication, which is often referred to as globalisation 2.0. According to McKinsey, “data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component.”
While globalisation continues to advance, a counter-movement is also emerging as nationalism and the desire to source products locally, particularly food, grows. This de-globalisation is already impacting the decisions consumers in some markets are making about the products they purchase.

  1. Increased connectivity

The increasing connectedness of people and information is creating greater transparency, better information provision, more critical thinking and more creative and dynamic individuals. It is assumed that pressure for greater accountability and transparency at the different levels of governance — and within industry — will increase.

  1. Changing labour market

With global population growth in developing countries and population aging in developed countries, the demographic landscape is changing at the international level. The projected change in working-age population predicts an explosive workforce growth of nearly 1 billion in the developing countries, mainly driven by high fertility rates. The opposite trend is predicted for the most advanced economies, with a future decline in the working age population (Rand, 2015, p.15). In the short term, this is increasing the value placed on ergonomics and other factors that increase worker satisfaction in developed countries where the labour force is shrinking. In the longer term, China and India may gain importance, whereas Europe may lose traction in global governance and economy (Rand, 2015, p.16).

“It’s crucial for the supply chain, logistics and warehousing industries to examine current trends and see how they can best adapt to the changing needs of the market.”

Trends in logistics
The supply chain is being impacted by a number of trends resulting both from the broader changes in society and advances in technology. These include:

  1. E-commerce

One of the biggest current trends already creating significant disruption in the supply chain is the continued growth in e-commerce. In Europe, the average share of e-commerce in retail was 7 per cent in 2015, 8 per cent in 2016 and projected to reach 8.8 per cent in 2017. Globally, retail e-commerce is expected to increase to 14.6 per cent of total retail, with a market volume of more than $4 trillion (eMarketer, 2016).

E-commerce has continued to experience high growth rates, in part by shrinking the time between order and delivery. Early in its development, consumers often waited a week or more to receive their orders. While this may still be the case in some specialty categories, major e-commerce players now routinely offer two-day delivery on many orders, while next-day and even same-day delivery is increasingly common. This is creating higher expectations among consumers and, as e-commerce expands to new categories such as food, delivery times are continuing to be compressed and e-tailers are exploring multiple options to consistently achieve next day or same day delivery.

  1. Anticipatory logistics

Anticipatory logistics is a process that foresees which logistic services will be needed in the future and in which region. The area where anticipatory logistics has already developed is anticipatory shipping. This allows online retailers to predict orders before they have occurred, based on previous customer behaviour data. This information is then used to ship or move goods closer to the potential customer to enable faster delivery. In the future, we will see anticipatory logistics extend across the value chain.

  1. Customer-centric production/batch size of one

In the future, the customer will increasingly become the centre of production. The result will likely be more localised production, as customers do not want to wait for their individualised product. The trend of 3D printing will drive both the individualisation and the localisation of production. The Adidas Speed Factory in Germany, which allows customers to customise their shoes, is an early example of this trend. (Adidas Group 2015).
The impact on warehousing and logistics are significant: these customised shoes never see a warehouse; they are shipped directly from the factory to the customer, reducing the need for warehouse space. However, the logistics required to support individualised production increase.
Even if we are not yet at a point where ‘batch-size-one’ production is feasible for most products, it seems likely that as this trend develops, companies will move production closer to their customers, and focus on next-shoring and near-shoring.

  1. Omni-channel logistics

Consumers are already using multiple channels for their shopping. They start and end their buying journey at different points and expect lots of information, a certain delivery speed and personalised experiences. This is creating opportunities for retailers to merge the different channels and optimise the whole journey for a customer, rather than optimising each channel separately (DHL Trend Research, 2015).
From the retailers’ perspective, omni-channel logistics can achieve an increase in customer base and loyalty, and also improve profitability. Shoppers using multiple channels for their shopping spend 15-30 per cent more than traditional shoppers.

By 2030, the omni-channel journey of a customer will move further, and the channels might be even more diverse than today. Home delivery is currently the most preferred mode of delivery — nearly 70 per cent of all online shoppers make use of it. Yet around 50 per cent of them have already experimented with buying online and picking up in a store. In a survey by PwC in 2017, 33 per cent of shoppers were open to kerbside pickup, and 28 per cent to pick up at a third-party location. These modes are commonly referred to as ‘click and collect’ and experts assume that these models will grow even more (PwC, 2017). As noted in DHL’s 2015 Trends Report:
“Looking ahead, we expect to see the physical assets of logistics networks being virtualised and managed much more dynamically in line with customer demands. It is also anticipated that there will be more focus.”

  1. Same-day (or faster) delivery

As noted earlier, e-commerce has continued to grow by shaping and meeting consumer expectations for faster delivery. The next frontier is same-day delivery. According to DHL’s 2017 Trend Research: Sharing Economy Logistics report, “41 per cent of US consumers have used programs offering same-day, expedited, or on-demand delivery services.”
Other studies show that 20 to 25 per cent of consumers would pay significantly more to receive items on the same day. These premiums would be up to 3 Euro, 20 RMB and 3 US dollars for the respective regions. Assuming that the customers would have to pay the full costs for this fast delivery, only around 2 per cent of all customers would be willing to pay more than that. McKinsey experts predict that “same-day and instant delivery will likely reach a combined share of 15 per cent of the market by 2020” (McKinsey, 2016, p. 9).

“Industrial IoT networks will soon become an essential component of efficient warehouse management as they provide the connectivity and data on which the smart warehouse will depend.”

Emerging technologies
Emerging technologies will play a significant role in shaping the warehouse of the future and supporting faster delivery. The major technology developments on the horizon include:

  1. Drones

Leading companies like Amazon and DHL are actively exploring the potential of drones and filing patents for the use of drones in logistics. Amazon has patented an idea for an airship that can launch drones over larger cities. At the same time, many people see issues with thousands of drones flying over a city. These include traffic congestion, noise and an obstructed view of the sky. Energy-wise, flying is the most inefficient means of transportation.

In 2030, drones should play a role in the supply chain, although legislation could delay their application. The greatest potential may be in non-urban areas where drones would allow consumers to get the same high-speed, i.e., 2-hour delivery, as is possible in cities.
In addition, larger drones may play a role in connecting cities and even doing long-haul cargo flights. Inside cities, drones could play a role in ultra-high speed or short-distance deliveries. What percentage of parcel deliveries drones will carry in 2030 is still uncertain, but any future distribution plan should be designed to interact with drones.

  1. 3D Printing

3D printing will significantly change the way many products get to market. The most common 3D printing application today is small plastic parts. This is still a slow and, therefore, expensive process, but should become radically cheaper and faster as the technology matures. Plus, more advanced machines that can print complex parts of multiple materials, including metal, will emerge. There are even companies creating machines that will enable 3D printed food. By 2030, it is possible that we will see a three-tier approach to the use of 3D printing:

  1. Some consumers will have cheap, easy-to-use 3D printers that allow them to print small plastic parts based on licensed 3D models they buy online. This would apply to things like replacement parts for home appliances, a plastic case for a mobile phone or toys for children.
  2. For less tech-savvy consumers, or larger, more complicated parts, there will be ‘print shops’ in cities. Consumers could either send their digital designs to be printed or order a product online and never know it was printed on-demand for them. Ideally these print shops would be integrated into urban distribution centres.
  3. Complex industrial applications, which use multiple materials including metal, would be supported by sophisticated 3D printers within manufacturing or service centres.

3. Autonomous vehicles
Autonomous guided vehicles (AGV) have been used in warehouses for 30 years. In the next 10 years, the use of AGVs in warehouses will grow exponentially.
There are several drivers behind this trend. First, there is an increasing demand for flexibility in warehousing. Changes in processes, product ranges or distribution channels are all impacting warehouse requirements. Traditional, bolted-down automated conveyor systems are not able to adapt to these changes. AGV provide the required flexibility.
The other driver is the simultaneous decrease in cost and increase in performance of AGV as the core components increasingly support consumer products, such as robotic vacuum cleaners and automated lawnmowers. The economies of scale are much greater for consumer products than for warehouse technology and could drive down the costs of the underlying technologies, such as sensors and navigation systems, used by AGV. A similar impact could result from the technologies used to support self-driving automobiles.
Where early AGV still relied on fixed infrastructures, such as reflectors, floor markings or tags, the technology is available today to allow AGV to navigate with the help of on-board radar and camera systems. Intelligent software and self-learning capabilities interpret the images and instruct the vehicle where to go. This makes the systems plug-and-play and, therefore, easy to deploy and more flexible.
Replacing a large conveying system with flexible AGV could require hundreds or thousands of small AGV operating together. This would have been impossible in the past, but today, and certainly in 2030, the combination of peer-to-peer communication, faster wireless networks and cloud-based processing power enable coordinated operation. As the technology progresses, advances in sensors and electronics will allow AGV to move faster, even when interacting with people.

  1. Mobile robotics

In this context, a mobile robot is an AGV with a robot on top. This allows the robot to drive through the warehouse to where products are stored and retrieve them. For this to work effectively, these robots need robust navigation, vision systems and multi-functional grippers. A level of artificial intelligence is also required to deal with the near-infinite variety of products, shelf configurations and product placement. All of these supporting technologies are advancing rapidly.

  1. IoT connectivity

As more sensors are installed in machines and processes, the opportunity exists to connect groups of machines or entire facilities into IoT networks that provide visibility into product movement and enable capabilities such as predictive maintenance. Industrial IoT networks will soon become an essential component of efficient warehouse management as they provide the connectivity and data on which the smart warehouse will depend.

  1. Big data

Big data programs are already shaping everything from marketing to forecasting. They will also drive key advances in logistics, such as the predictive shipping model discussed earlier and will enable machine learning as the integration of real-time and historical data is what allows machines to continually improve their operation based on past actions.
This article is the first in a two-part series. The next article – to feature in the next edition of MHD magazine – will examine the impacts these trends and technologies have on distribution; what the distribution centre of 2030 will look like; scale, flexibility and the need for automation; and pose a key question of ownership: who will own and operate the distribution centres of the future?
Michiel Veenman is the head of the competence centre, warehouse and distribution solutions at Swisslog. Michiel is responsible for the development of some of Swisslog’s next-generation solutions. Michiel has over 20 years of experience in intralogistics with roles varying from consulting, design and project management to market strategy and innovation. For more information visit

Logistics and data: It's a match!

At a recent logistics roundtable discussion, Louise Robertson from Australian last-mile solutions provider Localz declared that tech in the logistics industry’s should be more like Tinder. Logistics & Materials Handling finds out why.
Consumer behaviour is changing drastically. The taxi and hotel industry, the music industry and the media industry have all experienced significant disruption through digital concepts and have had to adapt accordingly.
One particular industry that has seen disruption on a large-scale is the dating industry, namely through Tinder, one of the world’s most popular apps for meeting new people. Tinder has been ranked by Apple as the most downloaded lifestyle app in America for nearly two years. According to data released by Tinder, 15 per cent of the population are using the app, equating to more than 3.5 million people.
Launched in 2012, Tinder is a free app and works by users swiping right if they like the look of someone, or swiping left to pass. The app uses a double-opt in method, only allowing two users to chat online when they mutually match. Tinder has made over 1 billion matches to date and more than 26 million matches take place on the app every day, according to data revealed by the company.
Louise Robertson, Chief Marketing Officer at Localz ­– a global last-mile solution specialist – thinks that the logistics industry needs to be more like Tinder. “Modern consumers are well informed. They are more engaged, connected and educated than ever before and carry real-time information with them in their pockets.”
The popularity of Tinder, and other similar apps, is largely attributed to its ease of use and simple mechanism. It’s a simple concept, with an intuitive menu and convenience that allows to users to access on the go.
The individual economy
According to Tim Andrew, Co-Founder and CEO of Localz, the changing behaviour of the consumer is presenting the logistics industry with a number of challenges.
“The on-demand economy is interpreted by most people as instant fulfilment. It’s all about what I want, when I want and how I want. That heightened consumer expectation and demand of being able to dictate the hour at which a delivery will turn up, we call the individual economy or Iconomy,” Tim says.
We now live in a connected digital age that redefines the way we live, the way we connect with each other and the way we consume. This has allowed an app like Tinder to change the norms around how people date and meet potential romantic interests. This same change in consumer mindset has increased the delivery expectations of consumers and placed increase pressure on logistics companies and retailers, Tim says.
Recent research carried out by Localz revealed that 94 per cent of consumers would choose a different shop or brand based on delivery or collection options alone. The researchers found that customers want to define the time and place that their delivery or service will occur and at a very minimum know when their delivery or service is coming. They also want to be able to change those details to suit their needs.
According to Tim, companies must offer flexible delivery services that are relevant to their customers, as individuals with specific needs, or they are at risk of seeing customer move their loyalties. “This is the behaviour of the individual economy,” Tim says.
The irrational, emotional, uneconomic consumer
Localz recently organised a roundtable event in Melbourne. The event was an opportunity to exchange ideas and information among executives and representatives from associations and local government on the challenges currently being faced by the retail and logistics industry. With a particular focus on meeting the demands of consumers who are irrational, emotion and uneconomic – but in control.
“Aussie retailers are under increased pressure to let go of the old processes, operations and logical order that optimise their efficiencies to deliver these discerning consumers,” Louise says.
James Westlake, Chief Revenue Officer at Localz, presented on the importance of data in providing the modern consumer with what they want. “You can always serve your customer better if you know them. We have had an explosion in the ability to collect data. But in Australia we are a bit behind. Often on an order there is no email, no phone number, no ID etc. If you compare this to a logistics provider in the EU, they wouldn’t touch without this kind of data,” James says.
The importance of data was echoed around the room, regardless of sector or role. Jonathan Reeve, E-commerce Fulfilment Consultant, said that it’s not that consumer motivation has changed. For him, people are still motivated by tangible things like convenience. “We’re motivated by a mix of tangible things, like convenience, and psychological and social aspects. All of these have remained largely the same over the years. It’s the context that has changed, we now have so much choice. The array of choices is now enormous for a consumer, that’s the big difference,” Jonathan says.
Jonathan attributes much of the success of Amazon to its ability to offer cheap and convenient delivery. He elaborates and argues that where Amazon already operates almost everyone has an amazon success story to share ­– and the hero of the story is the delivery experience. Having the ability to offer same day or, at the least, next day deliver is what has given Amazon the competitive edge, Jonathan says. According to him, it is the company’s collection of consumers’ data that will take Amazon’s success to the next level.
“The more data you have, the better you can run your supply chain. Humans are largely habitual, often ordering the same things in a cycle. If you look at Amazon, it is likely that in the future customers will receive deliveries containing products that Amazon predicts they will need, based on the data it has about their usage and past purchases. And if they get it wrong, there will be a box to send back what you don’t need,” Jonathan says.
The future of the high street
As consumers move more towards online shopping and digital-only outlets, Jonathan believes the high street has to adapt. “High street stores will have to change, but the retailers that give the customer every option are going to be the performers,” Jonathan says.
The omni-channel shopping experience changed everything – people want the same seamless service and experience that they have online, instore, Jonathan says. “This will have an impact on the physical store and tech can benefit the high street experience too. People need a reason to come to the store, it needs to become more of an experience than just buying something that could easily be ordered from home. Only 10 per cent of purchases are made online, that still leaves 90 per cent of purchases in Australia as face-to-face,” he says.
Jonathan believes that if businesses are timely and relevant in their communications and offers, consumers will be less cautious about data and start to volunteer information. He thinks that with this, retailers will be able to do more with the data and create a more competitive product.
Enticing the customers instore also presents benefits for the retailer, so long as the consumer has a good experience. Localz research found that 69 per cent of customers who collect a delivery in-store are likely to make an additional purchase when collecting that item. Retailers with brick and mortar stores are able to provide a mixed channel experience that increases their sales.
Why “Sorry, we missed you.” isn’t good enough
When asked what customers found the most frustrating about their recent delivery experiences, the Localz survey results revealed that 40 per cent rated receiving a “we missed you” card as the most annoying.
Getting delivery right the first time is not just good for the customer, but also cheaper for the logistics provider. “Increased first time delivery rates reduces the cost of delivering, so it doesn’t just have benefits for the consumer,” Louise says.
The second most annoying aspect for survey respondents was having no visibility of when the delivery was arriving. “It’s clear that control of when something gets delivered and visibility of what is happening through that process is key in logistics,” James says.
According to James, this has led to an increase in customers demanding ever smaller delivery windows. “When asked what was considered a reasonable delivery window, 30 per cent stated one hour and 47 per cent stated two hours. That’s 77 per cent of people believing an acceptable delivery window is under two hours or less. That’s a big challenge for logistics.”
In addition, receiving an accurate and up-to-date estimated time of arrival was stated as being very important to 47 per cent of customers and important to 36 per cent of customers. Much like Tinder, having information about potential love interests in real-time at the touch of a button is what many users like about the app.
The ability to communicate with a driver was less important than receiving an accurate estimated time of arrival, supporting the idea that many consumers are happy to manage their purchases online via a smart phone or PC, rather than an in-person service.
“There are clearly some challenges for retailers and delivery providers to meet the expectations of the on-demand consumer,” James says.
“Customers want simple, fast delivery with short delivery windows and transparency of what is happening through the process. They are also saying that the cost of delivery and collection services is still very important to their purchase decision. Reducing the cost of collection and delivery services, while still maintaining a high-quality service, is key to success for retailers and delivery providers.”

The logistics revolution: the route ahead – from MHD

Beth Morgan

Long the steady workhorse of supply chain, logistics has stepped to centre stage, carrying the responsibility as never before of delighting or disappointing the customer.
Driven largely by the impact of e-commerce, combined with advances in operational technologies, logistics has become the new playing field for competitive differentiation.
Logistics can’t operate in a vacuum. It plays an increasingly vital role in orchestrating supply chain performance in a way that adds maximum value both to customers and the business. Achieving this requires opening up the flow of information between all parties in the supply chain.
As a function that relies heavily on third parties and outsourced services, an open approach brings both risk and reward. Choosing the right partners, with the right infrastructure and technologies to support changing business models, is vital.
The opportunity to deliver value by optimising the logistics process through digitally enabled collaboration stands against a backdrop of increasing complexity on a scale not seen before.
In recent years, logistics has come under tremendous pressure from all corners. This includes increasingly demanding customer expectations, fluctuations in demand, rising transportation costs, freight capacity issues, labour shortages and disruptions. It also comes from uncertainties around global economies and international trade routes and agreements. Last-mile logistics is in turmoil as dozens of new entrants compete for business.
Necessity is the mother of invention
In response, the logistics industry is in the midst of an innovation-driven shakedown, as it resolves ocean and air freight capacity issues, shifting increasing volumes to rail and tackles labour issues head on. In parallel, consumers, retailers and small start-ups leverage mobile, GPS and even drones to push the boundaries of what’s possible.
Logistics has the opportunity to move beyond being a mere commodity service function to being a strategic partner to the business, providing competitive differentiation through performance excellence and innovation.
Advances in digital technologies are making logistics more agile than ever before, turning it into a hotbed of innovation. Automation in warehouses and distribution centres is driving process and cost efficiencies, helping to decrease delivery cycle times and optimise shipping options for customers in the most profitable way.
New sharing economy-based applications and services are exposing new opportunities for businesses to flex their logistics capacity by connecting them with idle assets and resources for storage and transport.
Control tower-type platforms connected via the cloud are helping provide greater visibility into logistics performance across the connected supply chain. This enables companies to be alerted to disruptions and quickly find solutions to mitigate operational risk, optimise processes and strengthen customer relationships.
These technologies promise visibility on a grand scale, offering a panacea to not only fix issues faster retrospectively, but to provide new levels of insight to drive increased optimisation and value.
This combination of pressures and opportunities puts logistics firmly in the driving seat to rethink and elevate its role within the business, its value to customers and its relationship with partners and suppliers.
Take control of chaos
As you consider the full range of possibilities made possible by new technologies and services, the key question is whether it makes most sense to run logistics fully in-house, in partnership with one or more third-party logistics service providers, or via a hybrid combination?
To help make this decision, start by determining the strategic value of logistics to your business. In the context of your three- to five-year strategic roadmap, review the current role of your logistics function as a source of competitive differentiation for your business.
If not already a strategic partner to the business, it’s possible that you’ll need to establish a new vision for your logistics function. This will require full representation at the highest levels of strategic supply chain and business planning.
Engage with your current logistics partners to understand their future roadmaps. Sit down with your key partners and have a serious conversation about their strategic development intentions over the next three to five years. If they don’t have the services you need and aren’t planning to develop them in a timeframe or direction that meets your future requirements, challenge them to consider developing them with you.

“Prepare a plan now to develop your existing teams and prepare the organisation for a shift towards more automation.”

Otherwise, prepare to review your strategic relationships and establish new relationships elsewhere. But be warned: global logistics service providers are becoming increasingly discerning about the number and type of new relationships they take on. Be sure you have the leverage potential before thinking about jumping ship.
Take a creative approach to partnerships. Consider synergies in logistics beyond the usual suspects. Look at other parties in your ecosystem who may offer opportunities to develop symbiotic relationships — some may even be competitors. In this brave new world, don’t dismiss the possibility to explore shared value through logistical execution that doesn’t compromise commercial competitiveness and differentiation.
Prepare for the future

  • Be prepared to invest. Although the focus in logistics has traditionally been on reducing costs, be prepared that elevating the role of logistics to a more strategic level will require investment. Consider options for how logistics can generate additional revenue, as well as ways to incentivise logistics to keep any future cost savings for re-investment.
  • Experiment with new services. Identify and seek out niche partners and evaluate them as solutions to capabilities not yet supported in-house or by traditional logistics partners. Set up quick ‘test and learn’ pilots with a trusted partner and/or customer to assess the value to the business and build out the model. Then refine and scale to ascertain true costs and returns, pilot more widely, customising the service where necessary to meet the needs of individual customers or markets.
  • Review your talent requirements. The skill profiles of tomorrow’s logistics teams will likely be very different from today. Logistics leaders are already telling us that they’re looking for people with strong analytical skills who can navigate in an increasingly business-focused environment. Equally, a shift towards a more customer-centric outlook may be required.

Prepare for the future now by identifying the types of skills you’ll need over the next few years, and work with your HR partners to develop a pipeline of fresh talent. Also, prepare a plan now to develop your existing teams and prepare the organisation for a shift towards more automation within your warehousing and distribution facilities.
Beth Morgan is a research vice president at Gartner. She is focused on supply chain sustainability and talent management. For more information visit

Australia Post launches Tech Academy

Australia Post has launched a dedicated Tech Academy, a two-year development program available to anyone with a keen interest in a career within the evolving tech sector.
Aimed at training emerging talent from a diverse background – including return to work parents and people with non-technical skills – Australia Post has teamed up with educator Coder Academy to provide 20 successful applicants on the job training and industry placements within the organisation’s tech and digital spaces.
Commencing February 2019, trainees will receive a 12-week tech boot camp, a two-week placement across Australia Post’s retail and operations sectors, and four five-month tech rotations, with opportunities for ongoing employment within a tech or digital team at the conclusion of the two-year period.
Australia Post chief information officer John Cox said the innovative program will nurture new talent and enable people to build their skills across emerging technologies.
“We know the tech industry is continuously growing and demand for talent is increasing. Meeting employment shortages within the sector has become increasingly challenging,” Mr Cox said.
“This program is open to anyone, regardless of technical background, including return to work parents, veterans, mid-career professionals, and graduates.”
Mr Cox said Australia Post is looking to grow its tech and digital capabilities, by developing talent in emerging technologies such as machine learning, the Internet of Things (IoT), and blockchain.
“Companies abroad have received high acclaim for their ability to deliver a workforce in line with future organisational needs and diversity, and we want to bring that to Australia Post.
“We are hoping this program will set the standard across the country, and will attract people who want to learn and have a strong sense of community, to help us improve the way we deliver our products and services for our customers.”
Applications for the Australia Post Tech Academy are closing on 2 September, with the first intake beginning in February 2019.
For more information and to apply visit

Paccar Parts opens new DC in Brisbane

PACCAR Parts has officially opened a second parts distribution centre (PDC) in the Brisbane logistics hub of Berrinba, Brisbane, in a move to reduce delivery times to dealers and boost parts availability to customers in its retail network.
The purpose-built facility features just over 6,000 square metres of warehouse space.
The PDC, which shipped its first orders in December, services locations throughout Queensland and northern New South Wales (NSW). By year’s end it will supply locations in the Northern Territory and regional NSW.
The Brisbane PDC will enable PACCAR Parts to offer next day delivery to 74 per cent of its dealers, which represents an increase of next-day deliveries by 68 per cent.
“PACCAR Parts’ mission is uptime – moving customers and businesses forward,” said PACCAR Parts General Manager, Chris Scheel.
“Ensuring the availability of parts and service to customers is the number one thing we need to do in the parts business.
“For primary dealers we’re now delivering next day versus three-four days previously. For VORs (vehicle off road), the dealer drops in an order, we pick the part, and it’s received within hours,” he says – adding that dealers will also benefit from reduced freight cost in these emergency situations.
Delivery speed – and accuracy – will be enhanced by the latest technology installed in the PDC. The Berrinba warehouse is the first PACCAR PDC to use 100 per cent voice pick technology. Staff are fitted with headsets that tell them where to go and what to pick – and also in what order to determine the most efficient pick pattern.
Brisbane Distribution Centre - Front“Voice-pick technology allows our distribution associates to have two hands free and keep their eyes where they are picking. This enhances quality, efficiency and safety,” said Scheel.
Berrinba is also the first PACCAR PDC globally to feature ‘wire guidance’, an electromechanical system that controls vehicle steering by tracking an energised guidewire secured in the floor. This system frees operators from steering responsibilities in very narrow aisles, such as those that stock Paccar’s smaller stock items.
“Fast-moving parts are stored at the front of the building to really speed up velocity,” said Scheel.
Nationally, PACCAR Parts has also been working closely with dealers to improve retail availability. This has resulted in a 45 per cent reduction in emergency orders over the past five years; and 97 per cent retail availability He notes this has been achieved in a period when stock-keeping units have grown by 35 per cent.
This growth will be sustained, in part, by big investments both in product as well as the dealer/retail network. Speaking at the PDC opening, PACCAR Australia managing director, Andrew Hadjikakou, said the company would invest heavily in new product over the next two years, including two new Kenworth models under development (T410 and T360); and the move to locally manufacturing of DAF, starting with the best-selling CF mid-year.
Significant further investment is also slated for PACCAR’s 80-strong retail network, with five new locations added in 2017 and another four to come on line in 2018. At the same time, PACCAR is in the midst of expanding the TRP store network, with new outlets scheduled to open in Ballarat and Pakenham through March and April.
“To support this, this facility has become absolutely necessary,” said Hadjikakou.

Global logistics spending expected to reach $10.6 trillion by 2020

Recent research revealed by Frost & Sullivan finds that global logistics spending is expected to reach $10.6 trillion in 2020, with transportation accounting for the majority at 70%.
Emerging technologies such as cloud computing, big data, and crowd sourcing, coupled with an influx of tech-savvy start-ups, are revolutionising the space of urban logistics.
About two fifths of the overall logistics costs are associated with the last mile that are forcing providers to come up with newer innovative solutions to deliver packages within cities.
The research predicts the logistics market will rapidly move toward mobile freight brokerage-type, on-demand deliveries and autonomous technology, such as the use of drones and delivery bots which are set to solve the last mile delivery challenge by being more cost-effective to end users with lesser regulatory mandates.
“Spiralling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand and autonomous solutions,” said Vijay Narayanan Natarajan, Visionary Innovation Senior Research Analyst at Frost & Sullivan. “Moreover, the influx of start-ups in logistics has enabled innovative solutions that not only provide value-creation customized solutions for the consumer, but also tackle the inefficiencies currently witnessed.”
Further trends and developments driving growth include:

  • Digital freight brokering platforms reducing empty miles by 8% to 10%;
  • Shift toward low-emission and zero-emission solutions, such as use of low-carbon vehicles or bicycles;
  • Fleet operators expanding their strategies by developing urban distribution centers for effective logistics management; and
  • Retailers focusing on compact stores to reduce capital expenditure and bring products closer to a growing urban customer base.

Materials handling and conveying specialist ICA joins MEGATRANS2018

Industrial Conveying (Aust) (ICA) has signed on to exhibit at MEGATRANS2018 – a new supply chain and logistics trade show taking place in Melbourne, 10–12 May.
ICA offers a range of tailored engineered solutions to help manufacturers move materials and products around production facilities and around the world.
The business joins the growing list of material handling leaders signing on to showcase their wares at MEGATRANS2018.
Find out more.

ALC looks to NSW Gov. for telematics leadership

The Australian Logistics Council (ALC) has called on the New South Wales Government to take a leadership role and advocate for significant changes to the Heavy Vehicle National Law (HVNL).
“ALC’s submission to the Inquiry into Heavy Vehicle Safety and Use of Technology to Improve Road Safety again reinforces the need for telematics to become mandatory in heavy vehicles,” said Michael Kilgariff, Managing Director, ALC.
The New South Wales Parliament’s Joint Standing Committee on Road Safety (‘Staysafe Committee’) is undertaking the Inquiry.
“In providing this submission, ALC has released a four-stage blueprint for the introduction of mandatory telematics,” Kilgariff added. “Telematics can help to improve heavy vehicle safety by providing truck drivers and transport operators with data that can detect any illegal and unsafe driving practices.”
He noted that, as Australia’s most populous states, New South Wales’ adoption of mandatory telematics would be key for driving heavy-vehicle safety.
“ALC’s continuing discussions with industry participants regarding the National Freight and Supply Chain Strategy indicate that industry is continuing to embrace innovative technological solutions,” he said. “This means it is now easier than ever to collect reliable data that can shape the development of a more efficient and safer freight transport network.
“Industry is grasping the nettle when it comes to telematics. Now is the time for governments to do likewise.”

New Linfox CEO reveals safety agenda

Mark Mazurek, the recently appointed CEO of Linfox Logistics, has told Logistics & Materials Handling how the supply chain company intends to set an example for safe practice in Australia.
“In 2017, there were 168 fatal crashes in Australia involving heavy vehicles,” he said. “This is unacceptable and it tells us that safety requires relentless commitment.
“You can’t put an unsafe driver in a safe truck and expect it to be safe.”
He noted that Linfox implemented its own in-house strategy – Vision Zero – after realising that it would need a culture of safety in order to keep its people and the public safe. “We invest in technology to enhance that, but it starts with culture first,” he added. “We’ve reduced our LTIFR (Lost Time Injury Frequency Rate) by 90 per cent since 2006 so we’re getting something right, but we can never be complacent.
“Industry, government and road users have a role to play in creating a culture of safety on our roads.”
Mazurek added that it is crucial the Federal Government uses its influence in the best way. “The Government role is about creating consistency for the industry,” he said. “On a policy level, it is critical to align national heavy vehicle legislation across Australia to make operations simpler, more efficient and safer. This includes heavy vehicle maintenance standards, driver medical standards and heavy vehicle licencing.
“We’d also like to see greater restrictions on older vehicles and trailing equipment. We commend the work of the Australian Logistics Council and the National Heavy Vehicle Regulator in building momentum on this issue.”
Linfox would also like to see the Government advancing policy in mandatory telematics to assist with the management of speed, fatigue, mass and maintenance, and the development of an environment conducive to innovation, enabling technology to be trialled and implemented quickly, Mazurek shared.

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