Even Santa is Digitalising his Warehouse
Long gone are the days of Santa’s workshop, where he and his elves manufactured toys using outdated devices. Industry 4.0 is upon us and, like most manufacturers and supply chain managers, Santa needs to invest in smart technologies to optimise production and distribution. Neil Ballinger, head of EMEA at , talked to Santa to understand which technologies he is using to automate his warehouse and keep up with the times.
Like many of us, Santa is familiar with the challenges of global supply chains — speed, traceability and the necessity to accurately predict demand are just some of his headaches. With over 200 million children across the globe and more than 122 miles to cover in one night, he could use solutions like collaborative robots and an Internet of Things (IoT) system to build a resilient supply chain for global distribution.
IoT tracking systems
To maintain an updated customer database and keep track of orders, shipments, and inventory stock levels, Santa requires an incredible level of visibility across his supply chain. Luckily, an Internet of Things (IoT) tracking system can help him store and process data that can improve operations.
IoT asset tracking systems are vital for any distribution business as they reduce connectivity issues and ensure that every product is continuously monitored. Santa is not the only one to have realised the potential of this technology — by 2027, around 267 billion asset tracking devices will be deployed globally, reaching a market size of $3.93 billion by only 2023, according to .
Connected sensors and machine-to-machine communication protocols help warehouse managers get real-time updates at every stage of the supply chain. They provide useful insights on asset locations, temperature, functionality and send the data reliably and continuously from anywhere in the world. Not only will Santa be informed in real-time about the location of each toy, but he will also be able to track his sleigh’s fuel consumption and prevent any maintenance issues.
Collaborative robots are designed to optimise the workflow while allowing the warehouse to maintain their infrastructure design and processes. The market for collaborative robots was valued at almost $600 million in 2018 and is projected to grow to $7.5 billion by 2027, accounting for about 30 per cent of the industrial robot market, according to .
Some of the most innovative cobots are also very easy to programme, even for workers with no knowledge of robot programming, like the majority of Santa’s older employees. Sometimes the process involves only physically moving the robot’s arm to the correct location. This further reduces initial automation costs and contributes to the return on investment (ROI), because there’s no need to invest in training.
To demonstrate how automation can help with the festive season, ABB employed twelve robots to decorate retail spaces in . Its famous dual-arm YuMi® cobot was used to serve coffee and interact with humans to create a unique merchandising experience. YuMi® was designed to automate the entire brewing process, from handling and loading the selected drink pod, to serving the hot beverage and disposing of the used capsule for recycling.
The flexibility of cobots is just as useful in a warehouse context, and not just to serve coffee to hard-working elves. Cobots reduce the physical workload of warehouse employees, resulting in fewer injuries and increased job satisfaction. Cobots can also guide workers to maximise their productivity — for example, they can use artificial intelligence and advanced machine vision systems to plan the best picking routes, eliminating unnecessary walking.
Collaborative robots and IoT solutions are no doubt the future of automation, providing reliability and efficiency while reducing costs as well. Nevertheless, as with all technologies, they are prone to technical issues that need to be resolved in a timely manner to avoid downtime. provides new, refurbished and obsolete parts for a large variety of automation manufacturers. And just like Santa, we deliver quickly all over the world.
Whether they are based in the United Kingdom or Lapland, all warehouses need to invest in smart technologies to remain competitive and increase efficiency.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”