Logistics: four questions to help you understand the challenges of digitalization

Between warehouse automation, order-picking robots, real-time transport tracking using geolocation, AI and ultra-personalized shipments… today we’ll be looking at the vast topic of digitalization in the logistics sector with the help of two experts: Thomas Larrieu, chief executive of Upply, a start-up specializing in digital solutions for transport professionals and Antoine Pretin, GEODIS’ Vice President of Engineering, who is responsible for Logistics automation system.

For several years now, the term “digitalization” has been coming up increasingly frequently in conversations, particularly in the logistics field. How would you define this term?

Antoine Pretin: It’s first and foremost a set of subjects and resources: it’s everything related to data and its management, to AI but also simply to software, which is often the first digitalization resource to be used in a logistics warehouse, with the WMS (Warehouse management systems).

Thomas Larrieu: Indeed, digitalization is first and foremost synonymous with the automation of certain day-to-day processes. It’s a vital first step toward becoming more efficient and productive. But digitalization extends further than this. It generates value as it makes it possible to go one step further when it comes to overcoming certain issues of inefficiency, whether operational or market related.

A.P: We’re adding new bricks to this digitalization process at every stage, enabling us to achieve a little more with digital applications across the whole supply chain…

About these practices, how would you describe them as part of your day-to-day work and how have they changed?

A.P: I’d say that for a long while now, we haven’t been fully aware of the importance of leveraging the data at our disposal. Robotization is a good example that shows how these practices have changed over the years.

AP: The first robots used in the warehouses tended to be automated guided vehicles, also known as AGVs. They could move from point A to point B, but if the slightest obstacle got in their way, they would be blocked. To remedy this problem, we introduced new bricks, the WCS (Warehouse Control System), able to operate as an interface between the WMS, the robot, and the traffic manager. In practice, this meant that not only is it possible to give the robot instructions, but these can also be modified on the fly. Today, we have so-called AMR robots (autonomous mobile robot), which possess a certain degree of intelligence. They have the possibility to change direction and take another way. They collect and analyze data throughout their journey and are thus able to get around an obstacle or change destination.

“Sometimes we need months to complete a calculation which a machine can solve in just a minute.”

- Antoine Pretin

AP:We are seeing similar developments with the robots used to handle products, which are now able to recognize how a particular object should be picked up, and from which side, to avoid damaging it or tearing its packaging.
Finally, AI makes it possible to carry out tasks which humans simply can’t manage in such a short time or with such a high degree of precision. Sometimes, we need months to complete a calculation which a computer can solve in just a minute. Thanks to these advances, we can now benefit from a simpler and clearer overview of everything happening in a warehouse, and of what will be happening there tomorrow. This enables us to prepare orders the evening before, and to move their content as close to the operators as possible so that when they arrive on site the next morning, some of the work is already done, leaving them only the high added value tasks to be performed.

T.L: Where Upply is concerned, our task is to facilitate the work carried out by transport professionals on a daily basis, thanks to digital solutions which provide them with added visibility and efficiency. For example, the latest service we launched consists of matching supply and demand for road haulage in an intelligent and automated manner. The principle behind this has existed for a long while now, but the digitalization of this process has meant that it’s possible to go much faster, to drastically increase the opportunities for matching, and to considerably improve documentation management.
Similarly, the effectiveness of our transport price benchmarking solution is based on the use of new technology. We have collected more than 800 million items of data to date. Thanks to machine learning, we can process them and deliver real-time market price estimates. If a human were to handle this task, it would take a lot longer…

A.P: In addition to the time saved, we’re also improving our services thanks to digital technology. In the mass retail sector, supermarkets are reassured when an AI system ascertains that the weather will be fine the following weekend and that consequently they need to stock up on water and ice cream. This helps avoid out-of-stock incidents. The same applies for the choice of box types. Thanks to artificial intelligence, it’s possible to optimize the layout inside the box, making it possible to choose the smallest possible box and to reduce the volume needed in the trucks as well as the volume of waste.

T.L: The supply chain needs to adapt to the product lifecycle. Some variations are foreseeable, but others much less so. These days, a viral video by an influencer is sometimes all it takes to trigger huge orders and subsequently, a sudden surge in transport demand. An intelligent digital platform makes it possible to respond to this by quickly notifying the carriers best suited to the situation at hand.

So, ultimately, the different use cases are extremely varied... but are you still seeing obstacles to the digitalization of logistics?

A.P: The leading obstacle must surely be the “fear factor”. Everything related to robotization naturally generates a certain degree of fear in the mind of the operator, just as it does for all of us, accustomed as we are to seeing terrifying humanoid figures in movies and TV series. Sometimes, it’s also just too abstract. But you generally find that once they’ve taken the plunge and had some first-hand experience in robotization, they never want to go back to the old ways when they see how much time is saved and how less arduous their work becomes.

T.L: From a transport-related viewpoint, the major challenge is also definitely the adoption of digitalization by the operating crews, and this requires support throughout the process of change. It’s a process which takes time, and it’s very important to take account of any reticence or objections. But when the efficiency gains are clearly tangible, the teams are always pleased to be able to save time and focus on other things.

A.P: There’s also the question of investments, in relation to time. We can’t digitalize everything all in one go, but we’re getting there little by little. I’d even go as far as to say that a certain point will come when we’ll have no choice other than to invest. There are jobs and tasks that nobody will want to do. As Thomas points out, people will prefer different occupations or in any case different ways to do things.

“The major challenge is also definitely the adoption of digitalization by the operating crews.”

- Thomas Larrieu

How would you describe the outlook and the future developments to come where the digitalization of logistics warehouses and transport is concerned?

T.L: The further digitalization progresses, the more the issue of data management will arise. There’s a crucial point concerning the sharing of data, as it’s this sharing which enables us to create value. The resulting challenge concerns the need to define a common format. The logistics chain necessarily involves many service providers. And if one thing’s clear today, it’s that we don’t have a universal language.

A.P: There’s also a challenge to be faced concerning personalization: both at Upply with the choice of the carriers best suited to the task, and from our side with personalized packs, targeted advertising using the data linked with an order and products engraved with the customer’s name, etc. Personalization also offers benefits for companies: we are beginning to personalize the pallets based on the layout of each store, taking account of the order of their shelving to optimize layout for example.
And to round off, I would also mention the outlook concerning CSR (Corporate Social Responsibility). I spoke earlier about the optimization of box sizes, which falls within the scope of these efforts to limit waste by avoiding excess packaging and CO2 emissions. Amazon has been something of a trailblazer where packaging is concerned, with an automated process making it possible to test all new products available for sale to check whether they require additional packaging in relation to the original packaging.
By adopting a greater perspective, why not consider preparing orders before having officially received them?

T.L: CSR is definitely important. At Upply, we have noticed that customers were prepared to pay a little extra for more ecological transport methods or vehicles. Digital tools enable us to propose this alternative solution and we will certainly offer other perspectives in the future…

Would you like to continue this discussion about the digitalization of logistics?