Do your suppliers of intralogistics systems understand well the long-term needs of your factory?

Do your suppliers of intralogistics systems understand well the long-term needs of your factory?



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2015/11: Challenges of intralogistics

Maarten van Leeuwen

Alvey is active in two main lines of business: palletising and what we call “logistics solutions”. Both lines of business have their unique challenges. Let us zoom in on what the challenges are on the logistics systems side.

Before we start, we must understand what it is that we’re talking about. This, already, is the first challenge. Our internal definition is “Handling, sorting and transporting goods away from the place where the goods were produced.” The vast majority of goods, once produced, go through at least one of  such steps: from manufacturing to (temporary) storage, from storage to a distribution center, from this center to another center, and from there to the customer, who may need to handle the goods again to deliver it to the final consumer. Alvey is active in all these fields, as we have already written and published before.

The challenges in this activity we perceive are, among other (i) unpredictability of volumes, (ii) “peaky” volumes, (iii) multitude of SKU’s combined with (iv) rapid changes of the SKU’s and (v) operator skills.

The unpredictability of volumes is caused by the fact that logistics centers are suppliers of a service to others – be it of the same organisation or to other organisations or end consumers. Therefore, logistics centers are dependent on what is going on elsewhere. It is easy to see that this can be highly unpredictable for Internet shops but also in the food and drink distribution, where simple things as the weather might have a major influence.

In addition, many logistics centers have volume peaks, which in turn have to do with things like opening hours of shops and the need to connect to organised distribution networks.

If these were not enough, there is likely to be a very high number of SKU’s to handle, which in addition tend to change rapidly as a result of new products becoming available, new trends in the market and seasons! Multiple SKU’s typically also mean a multitude of types and sizes of packaging. From boxes the size of a cigarette pack to crates the size of a pallet all the way to items like exhaust pipes which are virtually impossible to transport in an automated way.

With all this complexity there is a need for operators. These operators must be highly flexible and trained, and work under stress and be very accurate. Mistakes are very costly. However, it is not normally economical or even feasible to attract University graduates for this type of work, so one must count with relatively low skilled labour.

How does Alvey respond to such needs? It all starts with an as complete as possible understanding of the business our customer is in. This is not enough: we need to understand where this business is going in the foreseeable future, so we can build a scalable system which is small enough in the start to safeguard the return on investment, yet can grow as and when the customer’s business expands. Which, usually, it does and usually much faster than forecast. No two logistics centers are the same, as indeed no two Alvey solutions for them are. A second must is the need to apply the right technology for the right challenge. This means that logistics solutions typically include a mix of technologies, with some areas fitted with conveyors, some are open or have static racks, in some areas picking is done by list and in others by light or by voice. In this business, “one size fits all” does not exist. Ergonomics are extremely important for operators as is user friendliness. User friendliness includes things as very clear and unequivocal user interfaces and a multitude of simple to understand instructions in the form of boards and stickers. We should not forget that often operator turnover is high, and some operators may come from foreign countries and have limited local language skills. Language skills can generally be very easily overcome in a pick by voice situation, where the language can be easily adapted to the country language of the operator. None of this is enough. The design of the system and the software must also, and especially, take into account that mistakes happen. What happens if an operator removes a box from a conveyor where he should not, or the other way round? What happens if an operator picks the wrong article, or a wrong quantity thereof? How can this be detected, and how can it be corrected? 

From all this, it follows that Alvey, in isolation, cannot design a single logistics system correctly. To come up with the right solution there is only one way: in depth dialogue, in openness and trust, with the customer.

Maarten van Leeuwen
Group Managing Director

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    Do your suppliers of intralogistics systems understand well the long-term needs of your factory?

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