If omnichannel business model in logistics has not pushed through yet, it will undoubtedly do so during 2018. At the same time new mobile technology, adaption of warehouse automation and IoT reform logistics processes. To get an idea of logistic and warehousing trends for this year we interviewed managing director Jarmo Reunanen of Optiscan, a supplier of logistic and warehouse management systems.
interviewing Jarmo Reunanen, Optiscan Group
• translation based on text by Johannes Puro, ite wiki oy
- Global e-commerce has changed consumers’ buying behavior. Web shops should be able to offer personalized content, large product portfolio and competitive pricing. Smaller
and smaller orders need to be delivered faster and more cost effectively than ever
before. Global players such as Amazon and Alibaba challenge local players, as
economics of scale able them to deliver very small and inexpensive products
with low unit costs. The question is how can smaller players challenge global
According to Reunanen one answer is to combine e-commerce and existing retail shops into one consumer centric business model. Web orders of volume products can be delivered from brick and mortar shops, as the shops are already close to consumers. Shops can also serve as show rooms to see and test special products before ordering. Such orders can then be delivered from central warehouses or even directly from factory to home address. This discussion brings us quite close to the essence of omnichannel.
Reunanen sees that local stores can challenge global web shops with positive customer experience resulted from high quality service. A key question is whether services and delivery processes can be developed efficient enough so that the margins will not drop.
- Picking products in warehouses and stores differ from each other greatly. In warehouses the products are optimally arranged whereas in stores they are spread out for consumer access. Specialized processes are required when store shelves are used for warehousing, states Reunanen.
IoT has potential in logistics
The future of logistics cannot be discussed without discussing IoT, Internet of Things. According to Jarmo Reunanen IoT’s role and value is relatively easy to identify in logistics.
- Delivering a web shop product that costs ten euros is actually a quite complicated process that requires seamless co-operation between many operators from production to last mile delivery service. The process is best taken care of by making the supply chain management transparent. IoT sensors can give constant information where the product is and what happens to it in the next phase.
Getting information of the transfer and estimated time of the delivery can improve customer experience. At the same time special supply chain requirements, for instance when delivering frozen products, can be taken care of.
- Thanks to tracking systems there are no black holes in logistic processes. Monitoring truck tremble and other conditions give valuable information of how sensitive products are handled during transportation. At the same time monitoring transportation fleet can be carried out for optimizing energy consumption. All suppliers are interested in the efficiency of transportation process and green values. IoT enables this well, states Reunanen.
IoT can also have great impact on work safety. For example, accurate and real time information can be used to ensure that the worker does not carry too heavy weights. It can also be used to prevent collisions when moving products in hectic warehouse space.
Warehouse automation increases side by side with human work
Use of warehouse automation trends in warehousing. Reunanen refers to a
logistic research according to which 70 % of warehouse professionals believe
that there will be growth in use of warehouse automation in the near future.
- Warehouse automation will not replace human work, but technology and humans will increasingly work side by side. In the future new technology will be used to boost human work productivity in this hybrid operational model, says Reunanen.
Key technologies are voice recognition and new wearable mobility: different kinds of wrist computers, handhelds, ring scanners and smart glasses which all free hands and eyes of the worker, to boost quality and minimize errors in warehouse processes.
- Warehouses of different sizes already use voice recognition technology by Optiscan. In the future multi-modality will raise to complement pure voice solutions: different user interface technologies will be used side by side in the same application running in handhelds or tablets. Touch screen and scanner driven applications start to recognize voice commands and use augmented reality, providing a new level of user flexibility, says Reunanen. For example, real time picking instructions can be shown in smart glasses, supporting parcel scanning by a simple eye gaze.
In the future the warehouse operator will gradually start to resemble the Superman!