Intralogistics: Automation & Digitalisation Solutions
Wednesday, July 20th, 2022
Intralogistics is a key enabler of a smart and streamlined supply chain. When properly handled, it can improve efficiency and productivity across an entire organisation, resulting in a leaner, better informed, and more responsive business. Upstream supply chain pressures can make stocking up a challenge for importing countries in the APAC region. Business can also face costly wastage and logistics issues. How can automation and digitalisation help with proper inventory control and improve intralogistics? NTUC Fairprice and SSI Schaefer shed some light on these pressing issues.
Chong Nyet Chin, Director for Food Safety & Quality of NTUC FairPrice, shares her observations and concerns on prevailing issues faced by the industry at large.
Allison Kho, Head of Regional Marketing for APAC and MEA, responds on behalf of SSI Schaefer.
Nyet Chin: There is a general consensus among food industry players that the cost of automation and digitalisation is high, especially for SMEs.
What is your advice for businesses that want to adopt the much needed technology to improve intralogistics, but are put off by the cost of implementing it?
Allison: Investing in warehouse automation and digitalisation is a considerable undertaking. Business processes, internal operations, technological capabilities, and other available data need to undergo stringent assessment. This is to reduce the overall risks and costs involved.
Most importantly, a company needs to understand its business vision and growth plan when managing intralogistics. It is critical to envision how an automated system would be able to scale up the operation and manage the material flow efficiently in the next three to five years. By utilising a good set of data to forecast and calculate the highest throughput, the capital risks would be minimised while reaping the benefits of automation. Note that the data should ideally include a period of six to 12 months, which is the time from standard to peak season.
Next, identify the most labour-intensive operating processes in the warehouse and start with semi-automation. The first step is to automate the biggest processes and relieve staff of the most manual and menial tasks.
Ultimately, the level of automation a warehouse requires largely depends on the industry and the complexity of its operations. For the food/grocery and consumer packaged goods sector, consider the following key questions to ascertain what is needed for the business:
- Does the automated process need to operate in an accurate temperate control environment or micro-fulfilment?
- Does a lot of products need to be stored, or only just-in-time management method is required?
- Is a returns system in place? Is the business focusing on brick and mortar and require fulfilment directly from the retail space?
- Or is it an e-commerce business and looking to implement an omnichannel or multi-channel distribution strategy?
- Do you have specific weights or irregularly-shaped units? Or is there a need to meet stringent regulations for storage?
- Does your ASRS (automated storage and retrieval system) require extra security protection, track-and-trace capabilities, or climate control considerations?
Nyet Chin: As F&B companies strive to find the right balance between keeping “just-in-time” stock and safety stock, one of their chief concerns is products with expiry dates.
How should they address issues of food safety and food wastage?
Allison: Proper food storage practices play an essential role in ensuring product safety and quality. It is a crucial part of intralogistics. The storage environment is usually the most important aspect of fulfilling the food and beverage supply chain. From raw material preparation to manufacturing and packaging, and finally delivery, the logistics process starts from the warehouse and the transportation of the goods from one point to another.
Food tampering can occur at any point in the supply chain. While there are many ways to avoid this, we identify how and why warehouse management software such as WAMAS® and the picking process can achieve better data forecasts and controls to alleviate the risk of food spoilage and wastage.
The software identifies the storage priority between first-expired first-out, batch production and the storage of raw ingredients categorised by allergens.
Sequential picking and dispatching need to consider the following points:
- Weight of the item
- Stackable or not stackable (damaged goods = wastage)
- Perishable and non-perishable
- Halal and non-halal certified goods
- Same batch selection (storage and retrieval)
The software also ensures the correct storage and retrieval environments for the goods (frozen, chilled or ambient). An inadequately designed picking and dispatch process can trigger a chain effect on how it could affect the quality of the goods. Therefore, an intelligent software that can be customised to fit the needs of the business is of utmost importance.
Nyet Chin: The food industry is still reeling from the effects of the pandemic. Supply chain challenges are further compounded by inflation and the Russia-Ukraine war.
In light of recent global events, what are the trends that will affect intralogistics?
Allison: Food inflation and higher commodity prices caused by shortages and competition can cause supply chain disruptions. To cope with that, there is growing demand to create warehouses that can handle more storage, increase efficiencies, and also reduce the overall costs throughout the food supply chain. The adoption of clad rack structure/high bay warehousing has become more popular. Such warehouses are built to maximise footprint, and comes with built-in temperature control systems to reduce the risk of environmental contamination. (See explanation of what high bay warehouses are here: https://www.ssi-schaefer.com/en-sg/products/storage/pallet-rack-systems/high-bay-warehouse-18846)
There is also mounting pressure for businesses to reduce their bottom line amidst challenging market conditions. Increasing labour costs contribute significantly to the rising expenses. There is a direct correlation between the increase in warehouse productivity and efficiency, and the increase in manpower. Hence, turning to automation is definitely the solution, as the ROI of the investment can be spread across three to five years. Productivity will be increased without the need for extra manpower.
Another issue is the disruption caused by having only a single source for supplies. To reduce supply chain volatility, there is a rising trend for businesses to diversify their supplier base. It is then of exceptional strategic importance to install a one-stop warehouse management system such as WAMAS®. This software will assist in managing the movement of goods from different sources, their shelf life, and expiry dates. To further manage the picking of correct items and batches, a good picking software/strategy will reduce multiple touch points, thus reducing food damage/contamination and human errors.
If managed efficiently, the full material handling process can provide a good cushion for any adverse effects caused by supply chain disruptions. This ensures that companies don’t have to deal with complex processes and data that could lead to error in deliveries and forecasts.
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