Distribution Logistics Trends and Solutions from Dematic
One of Dematic’s latest recruits from Europe, Milan Vještica, delivered a dynamic presentation on the drivers and trends impacting distribution logistics to members of APICS NSW on November 8, 2006.
Milan spent the past 10 years in a variety of senior management roles with Dematic in the UK, during which time he helped develop logistics and supply chain solutions for many of the UK’s leading high street retailers and suppliers.
Milan, Dematic’s new Manager – Grocery and General Merchandise, discussed how the retail distribution supply chain challenge was constantly evolving with customers demanding smaller, more frequent orders and higher levels of service. This demand drives the need for faster, more accurate and cost-efficient logistics systems, he said.
But given the wide range of technologies available, how do you determine which solution is best for your business, asked Milan?
The Drivers
Milan began by outlining some of the key issues driving change in retail distribution today.
“For the majority of businesses, it is all about meeting stakeholder expectations in terms of profit, growth, increased market value and return on investment,” he said.
“At the other end of the supply chain, consumers are increasingly demanding more choice, more products, more ways of buying and receiving goods, and we are seeing a constant growth in online retail spending.
“Adding further complexity to the situation is the fact that we live in a constantly shrinking world with global and regional consolidation driving asset and inventory reduction and low cost country sourcing,” he said.
“And, perhaps the driver that has the greatest influence on how retailers physically get their products onto shelves is the growing impact of government and regulatory policy,” added Milan.
“Retail distribution has traditionally involved a high level of manual handling, but a combination of increasing restrictive OH&S legislation and a shrinking and aging workforce, is driving the development of semi and fully automated logistics and material handling systems,” he said.
The Trends
Key trends emerging in retail distribution is the constant growth in the scope and range of products available, multi-format retailing, a focus on the last 50m of the supply chain cycle, the escalating costs of transport and the introduction of shelf-ready packaging, said Milan.
“Within the walls of the distribution centre, the key trends are the constant battle to increase productivity and accuracy, within an increasingly restrictive OH&S environment,” he said.
Milan then discussed recent European experience in this area, which has seen some countries introduce low manual handling limits and a soon to be introduced cumulative lifting limit, which could severely restrict the number of hours any one person could manually handle products.
“Because of this increasing numbers of European retailers have been automating logistics and materials handling processes where possible,” said Milan.
The Solutions
Milan explained several order fulfilment concepts were becoming increasingly popular for retail distribution, utilising various levels of automation and different order fulfilment strategies.
These include logistics systems that automatically replenish manual or robotic picking zones, manual or automated batch picking of multiple orders followed by automated sorting of the bulk items to individual order quantities, and a variety of ergonomically-designed workstations, which minimise lifting and twisting motions by keeping the work zone at a comfortable height. In addition to greatly enhancing OH&S, such ergonomically-designed workstations enable very high productivity rates of up to 1000 items per hour, said Milan.
Summary
Concluding his presentation, Milan stated the only constant in the retail industry is change, stating:
- The use of automation in retail and wholesale DCs will continue to increase
- A new generation of solutions will offer previously unachievable levels of productivity
- Flexibility will become the most important design attribute to enable the retailer to keep pace with constantly changing demands
- Designs will be modular, scalable and adaptable
- Resilience will be improved by elimination of single points of failure and increased redundancy.
“No single concept offers a complete solution for the modern retailer. It is the integration of the appropriate designs that will drive the optimum solution for a successful business,” he said.
For more information, please contact Milan Vjestica:
milan.vjestica@dematic.com
Ph. 61 (0) 400 670 367 |
