Ep: 17 Establishing the Warehouse of the Future/Developments and Enhancements

00:06 Therese Snow 

Hi and welcome to DELMIA’s podcast, Global Operations on the Go. I'm Therese Snow. Today, we continue our series on the Warehouse of the Future. Our expert panel will discuss the development and advancements in warehouse operations. Let's listen in.

The Continuation of Reuter’s Supply Chain series

00:28 Paddy Le Count 

Well, hello to everyone joining us today. I hope you're all well and welcome to this Reuters Events Supply Chain podcast series, where today we'll be discussing developments and advancements in warehouse operations. I'm Paddy Le Count, Project Director here at Reuters Events, and today I'm joined by Prashanth Mysore, the Global Strategic Business Development Director from Dassault Systèmes, and Dirk Falkenreck, the EMEA Distribution & Value Add Center Manager from Parker Hannifin. Gents, thanks so much for joining me today and giving me some of your time. I think best place to start, a quick introduction from both of you before we begin today. Prashanth, why don't you kick us off.

01:02 Prashanth Mysore 

Hey, thanks Paddy. Hello, everyone. My name is Prashanth Mysore and I'm a Strategic Business Development Director for DELMIA, which is a manufacturing and operations brand of Dassault Systèmes. And I've been leading the majority of our digital transformation projects with the latest technologies.

01:19 Paddy Le Count 

And Dirk, a little about yourself.

01:21 Dirk Falkenreck 

Yeah, hello everybody. Dirk Falkenreck, I’m responsible for Distribution & Value Add Center for Parker Hannifin. Parker Hannifin is a company which is providing everything around motion control business. And we have approximately 10 locations here in Europe, which belongs to my organization.

01:40 Paddy Le Count 

Well, cool. That gives a little bit of background on everyone. No time like the present. Let's get straight into our questions today. Prashanth, I'm going to come to you first for this one, you know, when we're when we're looking at warehouse and distribution facilities and what the next step is for these in the journey of supply chain logistics operations, you know, what are the key challenges faced when aiming to create a more connected and unified infrastructure that can ultimately increase flexibility and optimization of supply chain operations?

Digital Infrastructure and Automation

02:10 Prashanth Mysore 

Thanks, Paddy. Obviously, you know, digital infrastructure is all about, the majority is all about automation. Automation plays an important role in digital transformation for warehouse and distribution facilities. And obviously, there are challenges, digital infrastructure needs, you know, infrastructure like cloud computing, big data, connectivity, infrastructure and all of them. And obviously, you know, a lot of companies are using multiple tools and technologies and software technologies. And one end of the spectrum you have information technology sources like ERPs and warehouse management tools, project management tools and all. Another end of the spectrum, you have operation technologies, which is like IoT sensors, and PLCs, and robotics and automation, all of them. What is missing, in my view, working with 11 different industry verticals is that contextualization of these two worlds, you know, information technology and automation technology, but somewhere we need to contextualize to achieve productivity, efficiency, and sustainability, you know, reduction of CO2 emissions and other things. So, this is what our experience talks about, contextualization. And obviously, we also have to be wary of people. Retirement of experienced workers is expected to create a skill gap. And while youngsters are bringing in new skills, it is crucial that the knowledge accumulated by more senior employees have to be captured and made accessible to the new workforce before the retirement. And my view is that since we are working with multiple technologies, a platform really helps. People, process and technology, you know, PPT. An amalgamation of these things will really help in achieving various goals of warehouse and distribution centers.

03:52 Paddy Le Count 

And Dirk, from your side, you know, obviously working for a specific company in this case, as opposed to looking across the industry as a whole. Where are the key challenges that you're dealing with in this?

Finding Seamless Integration

04:03 Dirk Falkenreck 

Yeah, I think first of all, I can confirm what Prashanth has said already. I think the political landscape is key. Seamless integration of all these systems we have, ERP, WMS system, you name it. Yeah. So, I think that's important. Unfortunately, we have, these days, much barriers across these systems. So, this remains as a big topic in our organization but I think the IT world is changing fundamentally right now and a lot of areas will disappear quite soon. I'm confident on that. What I would like to add on top of that is basically really the standardization is key across the end to end and supply chain. And here we have still, for my thinking, we’re in two deviations. In the process, which party stops us to implement full optimization. So. this is the key. And we as an organization work very hard on that to really get everything standardized as much as possible. Because once you have achieved that, then basically on top of that you can implement any automated solution, in case you have the pre-work done. So, look at our organization, it starts with simple goods received, if everything is according to our specification, are the barcode right, are the barcodes displayed correct. So, all the things the human being partly has to prepare for work, we still see failures. And that's where we need to overcome that. And once this is done, sure, then we can move ahead.

05:32 Paddy Le Count 

And sort of sticking on that point with yourself, Dirk, you know, we've certainly seen in the last two years, disruptions and change, you know, the name of the game in recent times. Looking at that standardization process, how can a stronger, more connected digital infrastructure in facilities then look to actually help drive forwards overall supply chain resilience against these shocks and changes and disruptions that obviously we've seen in the case of pandemic the last two years, but they will continue. It'll be something new tomorrow and the next day and the next day. So, we're looking at actually the resilience and the strength and flexibility of an operation, you know, is that a key focal point when you're looking to obviously strengthen this automation or any kind of IT processes in that?

Available Data in the Supply Chain

06:13 Dirk Falkenreck 

I think your question goes to more of big data, how much data we have available in our supply chain to really understand what kind of disruption could happen or what kind of deviation they're going to face in the short term. So, more data, more visibility you would help, in the overall process, would help tremendously to react on deviations and really have fast counter action. Today, we’re simply honest, in our organization, we don't really have that. So, there is something like the Suez Canal issue, or something is really breaking down, we don't have really proper tools right now to really overcome that. So, that's something we're going to work on. As I said, big data would help tremendously from the outside perspective. But also, the same for sure happens in your own warehouse. So, if you have any breakdown or any problem there, also here, visibility and big data will help. That's why, for example, we work here on the digital twin to really have more traceability in the warehouse, what's going on, are there issues we haven't foreseen. And then for sure, depending on data, you can simulate quite fast with the technology to look what you can do. And then you can react and make sure that your customer is not suffering of your internal issues..

07:32 Paddy Le Count 

It makes sense. And Prashanth, I’m sure, I see you nodding along there, you know, traceability, visibility and data, probably three words that have come up quite a lot in your line of work.

How COVID-19 Affected the Supply Chain

07:41 Prashanth Mysore 

Yeah. Alluding to what Dirk said, it's pretty much obvious that, you know, if you see how supply chain was engineered earlier, it's primarily engineered for cost and speed, right. But COVID-19 has exposed this vulnerability, which is predominantly engineered for cost and speed and all. The supply chain models were not really flexible enough, I'm sure Dirk would agree with me, to detect quickly and respond to volatile changes in supply and demand, which make decision makers unable to cope up with condition changes so, so rapidly during this disruption. And this disruption is not new. Today, we have COVID disruption, but we also had a lot of geopolitical issues and nearshoring and onshoring of manufacturing happening. So, these disruptions have really changed or exposed some of the weaknesses in supply chain, as Dirk already said. Visibility across supply chain is extremely important, this is where connected infrastructure or digital infrastructure will really help. And we, as part of Dassault Systèmes, we have established this Virtual Twin Experience to improve visibility across supply chain and also to predict supply and demand and in collaboration with suppliers and customers and the way they can reassess and reestablish their operational efficiencies in real time, right. A Virtual Twin Experience, which comes in handy to model your warehouse and supply chain and distribution centers, it also helps subject supply chain leaders to simulate what-if scenarios, you know, consuming various variables and even disruption in operations, you can actually simulate those scenarios as well. And it also helps with the control tower application. Now, this is one of the technologies which we have established, leveraging, as Dirk, you rightly said, leveraging data, big data, AI and even machine learning to anticipate supply chain interruptions and so that you can really overcome these disruptions using the Virtual Twin Experience. Yeah. Virtual Twin Experience is the answer to some of these topics. Obviously, IoT sensors, which are mostly found on production, factory lines and wearable devices, are also being used in distribution logistics facilities, and virtual twin will reuse this data for simulating and predicting model. Yeah, right. And I completely agree with Dirk here, big data, AI, IoT sensors will really help in visibility and optimizing supply chain.

10:12 Paddy Le Count 

One, I don't think we can call it a disruption because it's a constant, but you've alluded to it earlier, Prashanth, is to workforce capabilities and availability and productivity there within. It's a long standing concern in the space. What are the key factors that need to be addressed when businesses are both planning construction of new facilities in their network, but also the updating of current ones? What are the key areas that need to be focused on there? Prashanth, let’s stay with you on this.

Simulations Models and the 3DExperience Platform

10:38 Prashanth Mysore 

Yeah, coming from a technology company like Dassault, we are into a platform business, right. Through what we have helped, we have helped multiple customers in addressing some of the challenges which you have asked me. There are two things which you asked me here. One is people, you know, workforce, safety and security, and then making sure that their productivity is a tie, and also bringing in new warehouses and how do we create these Greenfield projects? Let me answer the second one, what kind of technologies we help in establishing new warehouses and new distribution facilities. So, we work with simulation models, 3DEXPERIENCE platform, that’s simulation models. Adopting a methodology called FAST. FAST is flow, accessibility, space and throughput. Okay. So, discrete event simulation really helps, while you're establishing new facility, new warehouse and new distribution centers, how exactly you can predict the flow of material. Last in first out, first and last out methodologies to really optimize storing and the picking of materials, right. Accessibility is important, as far as workforce is concerned. Easy access, accessibility of materials. And even when it comes to critical supplies as well, accessibility plays an important role. This is where simulation really comes in handy. And space. Space is important. Space for sustainability, space for health and safety aspects, space for seamless movement of material, is an important aspect as well. We simulate and optimize the space utilization and throughput, throughput especially during this type of disruption, when you have this nearshoring and onshoring of facilities and manufacturing is coming to picture. Throughput is extremely important in optimizing your inventory carrying cost and reducing carbon footprint as well. So, the FAST methodology as far as a new warehouse models are concerned, alluding to some of those aspects like, you know, quality health and safety environment, like manpower. So, workers these days, they need technology, you know, the workforce of the future brings in, tries to use new technology. And this is where we help most of our customers with cobots, cobots to help workers with safety norms, autonomous mobile robots, AMRs, which are definitely coming in handy for warehouse management, and contactless operation, especially during this pandemic, safety distance management, contactless operations are really taking over. And this is where AGVs, automated guided vehicles, where we can actually simulate the better utilization of AGVs here, and sensors, obviously, you know, sensors and, as Dirk you're also mentioning, scanners, barcode scanners, QR codes, and how these things, these data can be accumulated, so that the workers will have enough information at their fingertips, right. And using handheld devices or smartphones, where workers are readily informed about various activities in the warehouse and distribution centers even to bring in some of the standard best practices as far as safety is concerned. So, this is how 3DEXPERIENCE platform is helping multiple customers who are working with us, be it warehouse or logistics facilities or distribution facilities to help to bring in quality health and safety environment for warehouses.

13:49 Paddy Le Count 

To your side of things then. If the availability of workforce is that, that's obviously a struggle for many industries across the space, Europe and obviously globally, but also focusing on that productivity side of things, you mentioned the standardization, the speed of operations, and obviously that will help the digital side of things. But on a more human level, it's a challenge that you're dealing with in particular ways?

Creating a Zero-Accident Environment

14:12 Dirk Falkenreck 

Yes, I think there are a couple of drivers right now which definitely put this, us on the spot basically. So, one is definitely zero accident environment, to create a zero accident environment. And so, as we mentioned already here, that's the key to really provide an environment where people are comfortable with. So, this needs to be always considered, now I think more practiced as in the past. Then we get this COVID-19 effect which put more stress on our workforce, and also for sure it's been in Germany and these kinds of countries is the demographic evolution, which also has an impact on that. So therefore, this drives us and informs us a little bit to really think through how can we combine our current workforce with the future. So, there will be a short-term hybrid solution, where humans and optimization robots have to work together, as mentioned before, so this will be a step-by-step activity. This goes hand in hand with, to really make sure that our standard tools, utilization has been developed to the edge, and that really makes the next step of optimization in the logical way. So, this is definitely what we are going for. And I think we would like to make it too fast, I would say, because we have to make sure as a company that we really sustain valued employees, and we don't have to scare them, that we’re going to make everything tomorrow, we have robots and optimization, and their working places are going to disappear. So therefore, we're going the smooth process here to make sure we have a really well thought process to drive to the new world. But really make sure we have this, let's say, in a seamless way.

16:00 Paddy Le Count 

It makes sense in terms of that evolution of that. And one last question from Saturday to you two. It's kind of an extension of what we've talked about here. But the role that updating and additional development of these facilities plays in the wider sustainability strategy of a company is shifting up the priorities a lot across all supply chain logistics operations, for sure. There's many issues such as your waste elimination, energy efficiency, we could talk about a lot of different examples. But Dirk, can we come to you first, sustainability initiatives, they must hit quite high when you're looking to make new changes and developments to your facilities as obviously that is, you know, business continuity moving forward in the next, well, the future, however long that may be?

Achieving a Carbon-Neutral Environment

16:41 Dirk Falkenreck 

Yeah, I would say we wouldn't consider this, then you would think what the heck is this company about, you know, they recognize what's happening in the world. No, we really take this very seriously, since a long time, to be honest. So as a Packer organization, we have our objectives to achieve in the next 15 years, carbon neutral organization. You know, as we have a big company with more than 500 locations is quite challenging, for sure. And there will be location by location, different approaches. So, we as a facility or as an organization in Parker, we ourselves definitely set to 2030. We would like to achieve this in rural housing. And I think that's actually achievable. It's challenging, but it's achievable. And even in 25, I want to be here in Bielefeld, to achieve on waste, and also on energy consumption, which as I said, I think we are able to achieve this because since a couple of times, we have already various initiatives in place. And it starts for sure with energy, solar energy is the key, all our main distribution centers will have that opportunity. So basically, 60-70% of the energy we need to have will come from there. Concerning waste, and there are other probabilities, for sure in these days, and I don't want to mention everything here. But the waste issue is definitely something which is concerning in our let's say, distribution world, because of the all the packaging cost, which is floating around. And here definitely, we start already a couple of years ago, reusable container pallets or handling units approach. So, if we would be on our own, let's say, with various suppliers, we would be wasting already. We are not there 100% yet, because we have to deal with so many suppliers. But I think in the next 2, 3, 4 years, again, with a change in the thinking of, which is going to happen everywhere now, I'm sure in four to five years from now on, we will have more or less zero waste here, or if we have waste then for sure we can use this maybe for different purposes again. So, I think there is a lot of possibilities now. It really makes me really hopeful that we're going to make a big change in the near future.

19:02 Paddy Le Count 

Absolutely. And Prashanth, can we come to you for the final word today. As Dirk said, sustainability is high on everyone's agenda. It would be bizarre if it wasn't. But what sort of data points and areas are you presenting to customers or people in the industry. And, you know, to look to make these decisions that Dirk’s alluded to here. And obviously with these, you know, punchy but certainly achievable goals over the next sort of 10-15 years, or however long that may be.

How to Achieve Sustainability Goals

19:27 Prashanth Mysore 

Alluding to what Dirk spoke about, you know, the sustainability goals of 2030s has been in the agenda of most of the companies where we've been working with. Let's take an example of consumer packaged goods industry, which currently accounts to 2/3 of international trade volumes, right. And due to its rise, the industry faces significant sustainability challenges, as Dirk was also mentioning. This where I come back to the technologies like BIRD or Virtual Twin Experience. BIRD stands for blockchain, IoT, robotics and vision automation. Using Virtual Twin Experience, the objective is to have your sustainability theme embedded into your complete lifecycle of the product. And this is where environmental impacts are determined and simulated and validated using our technology and the virtual prototyping also allows faster and timely distribution and reduction in need for space, reduced energy and inventory carrying costs and better warehousing, which is also driving significant CO2 emission benefits. And this has resulted in, and one of the pointers which I've been reading earlier, is that the close $230 billion reduction in raw material usage, just by having this digital technology, having this operational excellence with the digital technology is definitely possible. And close to 200 to 300 metric ton of CO2 emission reduction, embedded in, having a digital infrastructure for product development as well as the complete lifecycle itself. So, these are the data points which we normally use as a part of a 3DEXPERIENCE platform journey to, you know, create a digital infrastructure for sustainable operations.

21:09 Paddy Le Count 

Gents, we're out of time for this morning but really appreciate you sharing your thoughts on the now even a bit in the past and then the future of what our warehouse operations is going to look like from a from a technology and a human standpoint as well. So Dirk, Prashanth, thanks so much for your time. Greatly appreciated. To everyone tuning in, thanks for listening. We'll see you on the next one. Stay safe and see you soon.

21:30 Therese Snow 

Thanks for listening to Global Operations on the Go.