Market Outlook 2017: The Future Of Warehouse And Logistics

Wednesday, September 20th, 2017

Patrik Seibel, global market leader food & beverage, Swisslog Warehouse & Distribution Solutions, sheds insight on what he thinks are important for warehouse solution providers to have and what can be expected in the near future.

What are some commonly used technologies in for warehouse and logistics in the food and beverage industry?

Patrik Seibel

In the past, food & beverage companies needed logistics systems that quickly and efficiently moved large quantities of products through their distribution centres.

Today, things are different. Keeping pace with the trends towards ever smaller lot sizes and delivery quantities as well as ever faster availability and shorter product life cycles requires systems that are highly automated and flexible.

When it comes to warehouse and conveyor technology, software and system operation, included needs to be everything from the warehouse management system to all the technical equipment required for automation: automated stacker cranes for pallets and light goods, conveyors, monorail systems, automated truck loading and automated picking modules, lifts, automated guided vehicles, and robotics.

In addition, to meet the growing demand for frozen foods, speed-optimised logistics processes must be operational at temperatures below -20 deg C.

I see an increased demand for higher performing systems and the inclusion of robotics. This applies for pallet based systems as well as light goods systems. With new or modernised production lines, typically the performance increases, and the warehouse has to cope with the higher output.

The distribution side also has its challenges with smaller order sizes and more frequent deliveries. Smaller vehicles or consolidated loads need rethinking.

What are some of the challenges associated with F&B logistics right now?

The food industry is facing many challenges, especially in the manufacturing and distribution segments. Population growth, demographic change and evolving consumer behaviour are among the many factors that present new challenges for logistics operations in the food & beverage industry.

Rising costs, changing consumer habits, SKU proliferation and environmental pressures are driving manufacturers to implement new processes simply to keep up.

Changes in society and dietary preferences are also transforming the global market for food. Many consumers are demanding convenient, easy-to-prepare and exotic foods. Meat is more popular than ever, spurred on by increases in population and disposable income.

What do you think is critical to stand apart from competition?

I’d say you would need an automated materials handling system with a state-of-the-art warehouse management system and robotics. There will need to be constant designing, developing, delivering and supporting new innovations with a clear focus on market trends, such as the aforementioned frozen goods section.

Customised, industry-specific solutions would also be required. These can help food and beverage manufacturers save in reduced energy and labour costs, and also increase throughput and service levels, improve order fulfilment accuracy, and maintain product quality.

Is the rise of small convenience stores and use of online grocery shopping impacting the types of products/ solutions that your clients need?


That’s right. This trend within the food industry has led to increased performance requirements. As such, the need for smaller batch and order sizes are changing the way warehouses operate.

We believe there should be a higher demand for islands of automation—smaller automated units to support the supply chain. Also, delivery speed is a key criterion when it comes to online grocery shopping. Goods have to be picked and shipped in a shorter time frame to many customers.

It has become obvious that the increasing speed and complexity of logistics processes can only be managed with a high degree of automation. Innovative robot and Industry 4.0 technologies in particular promise outstanding potential for the future.

What are some trends you can expect to see in the future?

While we still see a lot of small companies in the growing health food, and organics sectors, there is still a consolidation by the large food and beverage companies who are fighting to increase their market share. And with this, the distribution channels will be challenged and optimised.

Mergers and acquisitions therefore affect the flexibility of automated warehouse systems—a key factor in the food and beverage industry where, driven by cost efficiency efforts, fewer and fewer stores are eager to fill their warehouse far in advance. This means that the food and beverage industry needs logistics systems designed to deliver increasingly smaller order quantities on a firm, fixed delivery schedule.

This reflects what has been observed in recent years, where in the designing and modernising of logistics and distribution centres, the focus has shifted to developing innovative automated logistics systems which not only optimise throughput but also offer a number of additional performance criteria so as to better improve logistic processes.

An increase in the level of automation for the order fulfilment side will therefore be seen. Guided or supported manual picking or fully automated case picking and mixed case palletising will be in higher demand. The ability to deliver and integrate robotics becomes more and more important.