The future of warehouse technology

From bionic enhancements to floating storage and algorithms, developments in warehouse technology are creating an increasingly sophisticated logistics landscape. Logistics News ME looks at the advances

When technology trends in logistics are discussed they often focus on automation, IoT and tracking. While 2016 saw advances in all these areas, it also saw developments that dwarfed even the greatest achievements in connectivity.

In November, German car manufacturer Audi equipped workers with the wearable ProGlove – a bionic enhancement which features an embedded barcode scanner to allow for multiple tasks at any one time and what the automotive manufacturer terms “ergonomic” working. Affectionately personified as “Mark”, the ProGlove underwent a four week testing phase and now Audi employees are using ten of the wearables in five positions in the firm’s Ingolstadt plant.

Employees can trigger the scanning function by pressing the thumb and first finger together, leaving both hands free for their work and saving additional hand movements.

“For our employees, the scanner glove is a real help. It makes them more flexible; they can move freely and can scan and pack the cartons more easily,” explains Hartmut Bartsch, head of CKD Packing. “In addition, with the help of the glove, we design complex logistics processes to be more innovative and more efficient.”

“The development of ProGlove follows the idea that wearable electronics have to support the employees. That’s why we have developed a light glove for industry that is intuitive to use, and which can be deployed without any integration expense,” states Thomas Kirchner, CEO of ProGlove.

Elsewhere, DHL’s Parcelcopter completed successful tests last year  delivering medicine and other humanitarian supplies to islands and remote mountain regions in Germany, paving the way for developments in the delivery of relief and other items. The completion of the three month test marked the first time a parcel service provider had directly integrated a parcelcopter into its delivery chain.

The firm has also made advances in the area of machine-human interaction and collaboration in logistics. Augmented reality (AR) accessed via smart glasses has exceeded predicted levels of impact. So far mainly adopted for order picking in logistics (also known as ‘vision picking’), smart glasses enable intelligent, hands-free operations. First productive deployments have delivered promising results. A pilot by DHL and Ricoh in the Netherlands showed a 25% efficiency increase as well as strong positive feedback from the users.

“With this combination of fully automated loading and unloading as well as an increased transport load and range of our Parcelcopter we have achieved a level of technical and procedural maturity to eventually allow for field trials in urban areas as well,” said Jürgen Gerdes, management board member for post, e-commerce, parcel at Deutsche Post DHL Group.

Not to be forgotten, Amazon made the papers on a near weekly basis in the final quarter of 2016 when news broke of the successful patent application for drone warehouses and the retailer confirmed it is working on an app it describes as “Uber for trucking”.

The first development, a continuation of its Prime Air initiative to refocus the delivery service its business model currently depends upon. By using blimps to store goods, drones can then make deliveries within hours, rather than days, of purchase.

The “airborne fulfilment centre” (AFC) is an airship capable of flying at altitudes of 45,000 feet or more, housing items the company sells through its online marketplace. In the patent, Amazon describes a method by which drones would fly into the warehouse, pick up the items they need to deliver, and then deliver those items to the customer’s home.

The second piece of news has the potential to redefine logistics on a global scale: that Amazon is at work on an app expected to be released in the summer of 2017.

The app matches truck drivers with shippers looking to move freight, while also removing the need for a third-party broker, who can typically charge a commission of about 15% for doing the middleman work.”

The news follows Uber’s recent acquisition of self-driving truck start up company Otto for roughly $680 million and its intent to become both a freight hauler and technology partner for trucking. In 2012 Amazon made its $775 million acquisition of Kiva Systems, a developer of mobile-robotic solutions that automates e-commerce order fulfilment and warehouse operations.

For a company with slim profit margins, which are entirely dependent on efficiency, these plans would demand heavy investment – so how sure can founder Jeff Bezos be of their success?

Changing times

The use of technology to automate and enhance warehouse operations is nothing new and it was only a few short years ago when we envisioned a post 2020 world largely run by robots. But while technology has improved by leaps and bounds, it hasn’t followed the predicted trajectory.

First of all, it is far from optional; in order to be commercially competitive logistics firms and warehouse operators have had no choice but to adopt, and adapt to, technological developments. Secondly, it seems the more bizarre the idea on paper, the more chance there is it will become reality and it isn’t just the logistics companies who are innovating – tech companies are devising more and more solutions to assist the industry.
Summarising its predictions for what it calls a “period of rapid change” the World Bank predicts technology will continue to define progress.

Jean Francois Arvis, senior economist, Trade and Competiveness Global Practice, The World Bank, says: “Logistics will experience a systemic change in terms of workforce and technology adoption. Logistics will be challenged by increasing competition as well as a growing shortage of skilled workers as the baby boomer generation retires. To solve these challenges, logistics is entering a phase of technical transition. Adoption of automation technologies like collaborative robotics will significantly rise in order to meet increasingly complex customer needs and to cope with the aging workforce and skills shortage.”

2017 is tipped to be a big year for AI – potentially at the cost of jobs – following huge developments in Silicon Valley and the newly discovered applications of autonomous machine learning.

The coming decade will see a drastic transformation sweep the industry and the ultimate impact of that will be how humans and machines work alongside each other. While tech driven alternatives are likely to take on manual tasks, workers will become the brains of the machines, constantly required to optimise their performance for ultimate efficiency.

Prof. Dr. Michael ten Hompel, chair of Materials Handling and Warehousing at TU Dortmund University and MD at Fraunhofer Institute of Material Flow and Logistics IML, says: “Even more fundamental are the logistics-related issues arising from human-machine interaction.

“Today, machines can already be controlled by voice commands or gestures. In future, people will communicate with complex robots and even with swarms of simple cyber-physical systems like inBins or intelligent mobile shelves. Communication won’t be unilateral anymore. Machines will also approach humans, for example, in order to trigger replenishment activities or schedule maintenance work. To put it straight: machines will be able to make decisions.

This raises two fundamental questions: What role will humans play in the decision-making of the machines and how will responsibilities be shared between humans and machines?”

In addition to optimising the performance of machines, the ability to analyse and scrutinise the power of “big data” will also become an essential skill.

In its “2017 disruptive technology” countdown, Forbes wrote: “Big data will be a necessary asset for companies in all sectors, from trucking to data entry, big data algorithms will change the landscape in a big way, metaphorically and literally – geographical information systems will get a major upgrade in speed and efficiency.”

This is expected to bring its professional development and training challenges moving forwards.

Gerdes says: “The digitalisation of everything is a phenomenon that is changing and, in many cases, disrupting almost all established industries. The postal sector learned first-hand the transition from analogue to digital through the advent of email and online communications; these services have diminished mail volumes over the last 15 years.

But is this the fate of other logistics services as well? Will physical transportation be displaced by an exchange of bits and bytes?”

Transforming systems

The warehousing market is expected to expand at a CAGR of 5.8% during 2014–2019, to reach a market value of $709.7 billion, according to figures from SOHAR Port and Freezone CEO, Mark Geilenkirchen. He says: “Upcoming technology trends, such as the use of robots in warehouses, automated vehicles and drones for product distribution, are going to impact the structure and dynamics of the warehousing market by 2020.

“Warehousing is a significant part of logistics enabling the value chain players to stock goods in appropriate condition until the market demand is elicited. The global storage and warehousing industry has grown at a strong pace to reach a market size of $566.4 billion as of 2014, driven by export-import growth, the global retail industry, especially e-commerce, and overall industrial production,” he adds.

But change will not be confined to the warehouse. At all points of the supply chain, automation, connection and wearable tech will drive forward change and enhance transparency in operations

For the future, Gerdes predicts: “It may sound far-fetched but 3D printing could impact goods transportation in much the same way as email impacted letters. Some products will no longer be manufactured in large mass-production facilities and shipped around the globe. Instead, product schemes will be digitized and sent to small factories where products will be 3D printed closer to the customer. This allows for a hyper-customisation of products, resulting in ‘batch size one’ production, accompanied by subsequent new logistics service concepts.”

While many focus on the technology we are likely to see emerge, DHL has also named the fads it believes will be absorbed by more sophisticated systems moving forwards. These include crypto-currencies and crypto-payments, which the firm says is “out of scope” and real-time services, which it says will be absorbed by other trends such as “cloud logistics, the Internet of Things, and digital identifiers.”

The logistics industry falls at an intersection for hyper connectivity, unique to any other industry; pulled and pushed by the trends driving clients and consumers alike. In a short space of time it has adopted app-based operating systems, collaborative software and GPS and automation technology in order to survive and the future will surely demand more investment in even further reaching systems. How successful that will be is entirely dependent upon the interaction between human and machine – in the warehouse and beyond.