Global supply chains have proven to be prone to unforeseen events ranging from banking crises to tsunamis and earthquakes to global health problems, as best illustrated by the current Covid-19 pandemic. The globalization model is examined more closely today than ever before in the 25 years of its existence. Reality has roughly mixed in with idealized visions of efficient, integrated, international production and logistics.
Not only crises and upheavals are driving change. Longer-running trends have increased the pressure, such as Industry 4.0, sustainability efforts and legal pressures to reduce pollution and energy consumption.
Manufacturing is moving away from mass production towards mass customization and “batches of one”: standard products with a high degree of tailor-made content and functions. A modern, technology- and science-led agricultural revolution is leading to extensive changes in food production.
Many changes have been going on for some time, but Covid-19 in particular has accelerated the pace of evolutionary change that is already underway.
The way things are made is changing. The development of artificial intelligence and the need for sustainability will strongly influence the design, layout and location of future factories.Increased connectivity, personalization, automation, real-time performance monitoring through “digital twins”, new technologies like additive manufacturing (also known as 3D printing), generative design and “networked factories” will change the manufacturing and sales landscape. This will inevitably have an impact on logistics, from the size, distribution and function of warehouses to the design of the industrial trucks in them.
Companies cannot get away with paying lip service to automation, transparency and efficiency in the supply chain; they have to seize the opportunities to face the challenges.
Juha Nyman, Director, Solutions Strategy and Business Development, Cat® Lift Trucks EAME
According to Juha Nyman, Director, Solutions Strategy and Business Development for Cat® pallet truck EAME, a global supply chain is not the future. Pre-assembled parts and components need to be available closer to the customer to enable quick final assembly and overnight delivery – which is closer to the ideal of lean manufacturing.
“This is likely to shape the logistics chain in Europe even more than local wages,” he said. The Covid-19 pandemic has made logistics companies and manufacturers aware that they cannot be so dependent on human labor, for example all of which are on sick leave – or retire or find that they prefer fixed working hours close to where they live, as is the case with truck drivers around the world. These pressures are driving the trend towards more automation, both in material handling and in other industries.
But automation has to be strategic; Freestanding solutions will not master the challenges that are so emerging in the industrial landscape.
“We need devices with interoperability that can be easily connected and integrated with management systems,” said Jani Mahonen, director, digital services and solutions development at Cat® Lift Trucks EAME. Just as different machines in the production hall of a smart factory have to communicate with each other, tracking, depalletizing, rack loading and unloading, picking, placing and palletizing devices must be able to communicate within the company’s management systems. But how far can systems be automated?
“It probably looks like in the beverage industry, for example, where you have very standardized, even loads, very high quantities and the entire logistics chain under control,” he continues. “We’re very close to the lights-out factory.” Contradicting pressures are created by the emergence of batch sizes that are becoming so small that significant investments in fixed, heavy automation are required. Outsourcing logistics to large, specialized companies also makes sense, but ultra-short contract periods discourage investments in modernized, automated equipment, no matter how efficient it may be.
Jani Mahonen, Digital Services and Solutions Development, Cat® Forklift EAME
Manufacturers and logisticians need to think more intelligently. Doing the same thing that brought the industry into its current situation and hoping for a different outcome is doomed to the same fate as it is today: vulnerability, disruptions, bottlenecks and volatility, especially when it comes to transportation costs. Flexibility is essential in both material handling and production, so warehouses should neither be fully automated nor not automated; they should be mixed. We will see an increase in “cobotization”: humans, robots and automation work together. Management systems must also be agile and quickly adapt to changes; Excess inventory, for example, will have nowhere to hide in shorter, more agile and rapidly changing supply chains; Disruptions in the supply of components cannot be covered over by the “white graves” of warehouses with “consignment warehouses”.
“There are a lot of new ideas, including in logistics and manufacturing, but it’s pretty hard to predict which one will win,” said Juha Nyman. Historically, with hindsight, the winners seem obvious after a few years; Choosing them at this time is not that easy. It is important to find a balance between fear of the future – potential job loss – and opportunities.
“The balance sheet is very optimistic,” said Jani Mahonen.
“Automation works best when you can standardize the process, but there are exceptions almost everywhere: goods receipts are not OK, they cannot be handled with a standard process or something,” says Juha Nyman. “Nothing is as flexible in dealing with variations and off-script events as a person. I am confident that there will still be jobs for people in logistics in the future. “
This article is based on a longer function written for Eureka from Ruari McCallion. Eureka is a free online magazine, sponsored by Cat pallet truck for material handling professionals. It digests the latest trends, technologies, and solutions, and offers the reader simple, practical advice that they can use to their advantage. visit www.eurekapub.eu For more information.