World-spanning supply chains have been exposed as vulnerable to unforeseen events ranging from banking crises, through tsunamis and earthquakes, to worldwide health challenges, illustrated most starkly by the current Covid-19 pandemic. The Globalisation model is under sharper scrutiny now than at any time in the 25 years or so of its existence. Reality has rudely intruded on idealised visions of efficient, integrated, international production and logistics.
It is not just crises and upheavals that are driving change. Longer-standing trends have added to the pressures, such as Industry 4.0, drives towards sustainability, and legislative pressures to cut pollution and energy consumption.
Manufacturing is moving away from mass production towards mass customisation and ‘batches of one’: standard products with a high degree of bespoke content and features. A modern, technology and science-led agrarian revolution is leading to wholesale changes in food production.
Many changes have been ongoing for some time but Covid-19, in particular, has accelerated the pace of evolutionary change that was already under way.
The way that things are made is undergoing upheaval. The development of artificial intelligence and the need for sustainability will strongly influence the design, layout and location of future factories. Increased connectivity, personalisation, automation, real-time performance monitoring by ‘digital twins’, new technologies such as additive manufacturing (aka 3D printing), generative design and ‘connected factories’ will change the manufacturing and distribution landscape. That will inevitably have an effect on logistics, from the size, distribution and function of warehouses to the design of materials handling vehicles within them.
Businesses cannot get away with paying lip service to automation, transparency and efficiency in the supply chain; they have to embrace the opportunities in order to rise to 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® Lift Trucks EAME, a globe-spanning supply chain is not the future. Pre-assembled parts and components must be available closer to the customer, to allow fast final assembly and overnight delivery – which is closer to the ideal of Lean Manufacturing.
“This is probably shaping the logistics chain in Europe even more than local labour rates,” he said. The Covid-19 pandemic has made logistics companies and manufacturers aware that they cannot be so dependent on human labour, who could all be on sick leave, for example – or retire, or find that they prefer working regular hours closer to home, as is the case with HGV drivers across the world. These pressures are all driving the trend towards increased automation, in materials handling as well as other industries.
But automation must be strategic; freestanding solutions will not overcome the challenges emerging so starkly in the industrial landscape.
“We need equipment with interoperability, that can connect and integrate with management systems easily,” said Jani Mahonen, Director, Digital Services and Solutions Development for Cat® Lift Trucks EAME. Just as different machines have to be able to speak to each other on the production floor of a smart factory, tracking, depalletising, shelf loading and unloading, pick, place and palletising equipment needs to be able to communicate, within the organisation’s management systems. But how far can systems be automated?
“It looks quite likely in the case of, for example, the beverage industry, where you have very standardised, uniform loads, very high quantities and the whole logistics chain under your control,” he continued. “We are quite close to the ‘lights-out factory’.” Conflicting pressures come from the emergence of batch sizes that are becoming so small that significant investment is needed in fixed, heavy automation. Similarly, outsourcing of logistics to large, specialist organisations makes sense but ultra-short contract periods discourage investment in upgraded, automated equipment, no matter how efficient it may be.
Jani Mahonen, Digital Services and Solutions Development, Cat® Lift Trucks EAME
Manufacturers and logistics operators alike have to think smarter. Doing the same thing that has brought industry to its current situation and hoping for a different outcome is doomed to the same fate as we see today: vulnerability, disruption, shortages and volatility, especially in transport costs. Flexibility is essential in materials handling, as well as in production, so warehouses should neither be fully automated nor non-automated; they should be mixture. We will see a rise in ‘cobotisation’: human beings, robots and automation working together. Management systems have to be nimble, adapting quickly to change, as well; excess inventory, for example, will have nowhere to hide in shorter, agile and fast-changing supply chains; disruption to component supply cannot be papered over by ‘whited sepulchres’ of warehouses bulging with ‘consignment stocking’.
“There are all sorts of novel ideas, including in the areas of logistics and manufacturing, but it’s rather difficult to predict which of them is winning,” said Juha Nyman. Historically, the winners seem obvious in hindsight, after a few years; picking them at the time is not so easy. There is a balance to be struck between fear of the future – potential job losses – and the opportunities.
“The balance is very much on the optimistic side,” said Jani Mahonen.
“Automation works best where you can standardise the process but, almost everywhere, there are exceptions: incoming goods aren’t in good shape, they can't be handled with a standard process or something,” said Juha Nyman. “Nothing is as flexible in dealing with variations and off-script events as a human being. I am confident there will still be jobs for people in logistics in the future.”
This article is based on a longer feature written for Eureka by Ruari McCallion. Eureka is a free online magazine, sponsored by Cat Lift Trucks for materials handling professionals. It digests the latest trends, technologies and solutions, and presents readers with straightforward, practical advice which they can use to their advantage. Visit www.eurekapub.eu for further information.