If logistics is defined as moving things efficiently from point A to point B, then intralogistics is a similar but much-expanded concept. It involves, within a distribution centre or warehouse, optimizing and managing the logistical flow of information along with physical materials management. Intralogistics is not a new idea in supply chain, but now it has a trendy name. The main aim is to optimise productivity through a combined and improved use of technology, labour and equipment. The benefits are the same ones that all supply chain managers pursue: minimising inventory, faster speed to market and reduced costs.
Smart supply chains use technology
Optimization is the keyword in intralogistics. It involves the application of a technology-based solution, often a fully-fledged warehouse management system (WMS), to create a “smart” supply chain. Companies are investing in such software solutions to improve their delivery capabilities, thereby gaining a competitive edge.
There are many off-the-shelf solutions available in the external marketplace but the choice is overwhelming. Making a selection requires some thought and before committing. It is best to answer a few questions such as:
- What is your available budget?
- What is the extent of your requirements / how complex are they?
- How soon do you need the solution in place?
- How many people need to be trained to use the system?
Benefits of a Warehouse Management System
A typical packaged WMS solution focuses on getting the best results out of physical assets such as conveyors, robots and packaging machines by automating as much as possible. At the same time, the same system aims to integrate the documentation processes and data communications by implementing software solutions that manage the interface. Most available WMS systems require some customisation and technical support to integrate with your current ERP system, if you have one.
A large snack food company in the USA, Old Dutch Foods, undertook to integrate their logistics in real-time using the ERP system JD Edwards, but in conjunction with a proprietary WMS. According to Jorn Remmem, Director of Plant Operations and Engineering, “The design of the expanded distribution center meets four core objectives:
- doubling our capacity to serve the Atlantic region
- increasing the throughput to meet our investments in production capacity
- eliminating errors through the use of new technologies
- providing complete product visibility and traceability.”
Software-driven WMS systems manage the manual and automated processes within the internal supply chain while delivering data analyses and real-time communications. If goods flow through your warehouse efficiently, along with the correct documentation, you have the elements necessary to meet consumer expectations. There are also benefits beyond the walls of the distribution centre. A streamlined internal process means that transporters can manage their schedules accordingly and customers know when to expect deliveries.
Challenges in intralogistics
- Energy consumption
Managing energy efficiency is one of the biggest challenges facing modern logistics operations. Automation offers endless benefits to manufacturing operations around the globe but it comes at a cost. There are increased requirements for energy needed to run any automated system. This is very apparent in the automotive industry where intelligent power monitoring devices are used to measure and monitor energy consumption in real time and make the necessary adjustments. According to automation and intralogistics experts, Swisslog, “the most efficient shuttle and robotics systems have been engineered to reduce carrier weight and optimize weight/payload ratios for lessened energy requirements”.
- The E-commerce effect
E-commerce has dramatically affected the way we manage fulfilment of customer orders and the method we use to operate transport logistics. Consumers want same-day deliveries and 100% availability. The number of package sizes is increasing and we are transporting ever smaller order sizes. This requires great attention to detail, a high degree of process assurance and a dash of speed. Production and distribution facilities will eventually become impossible to operate without automated integrated logistics.
Companies have to find a way to control all information and product flows not only nationally but across borders too. A more interconnected world, an ageing society, and the growing scarcity of raw materials are all increasing competitiveness in the global market. Companies have to adapt to being more international in some ways and more regional in others. Customers may be demanding the latest technology in their gadgets but they also want to buy local produce.
Buzzwords abound in the realm of intralogistics. Industry 4.0, digitisation and the Internet of Things are offered as solutions to achieving a completely smart supply chain. Despite the hype, we are still acutely aware of the increasing need for people, software, data, processes and machines to work together.
The next article will focus on innovations in intralogistics.
Image courtesy of by Fives Group
Our directors are experienced logistics consultants who have worked closely with clients in a range of sectors and countries to improve or expand their warehouse and distribution centre operations.