The miracle of logistics
Reading Time: approx. 15 min.The miracle of logistics
How intelligent systems deliver goods to homes around the world
CHAPTER 1 – More depending customer expectations
CHAPTER 2 – Predictive deliveries: The warehouse that can predict the future
CHAPTER 3 – Speed through forecasting
CHAPTER 4 – A bit like a computer game
CHAPTER 5 – The troublesome and expensive last mile
CHAPTER 6 – The Mars rover that’s taking to the streets
CHAPTER 7 – Airmail meets the robo-postman
CHAPTER 8 – Space is scarce
CHAPTER 9 – The role of logistics in smart production
CHAPTER 10 – Dispatchers become suppliers
CHAPTER 11 – Take-away
CHAPTER 1 – More depending customer expectations
CHAPTER 2 – Predictive deliveries: The warehouse that can predict the future
CHAPTER 3 – Speed through forecasting
CHAPTER 4 – A bit like a computer game
CHAPTER 5 – The troublesome and expensive last mile
CHAPTER 6 – The Mars rover that’s taking to the streets
CHAPTER 7 – Airmail meets the robo-postman
CHAPTER 8 – Space is scarce
CHAPTER 9 – The role of logistics in smart production
CHAPTER 10 – Dispatchers become suppliers
CHAPTER 11 – Take-away
It has six wheels, wears a white hat and moves a little like a moon buggy. The vehicle, known by its designation 6E41, uses the six wheels to feel its way along the sidewalk.
A Mars rover makes its way through the streets: While in other cities this sight might attract a huge crowd of spectators, the people of the Eimsbüttel quarter in Hamburg seem unperturbed, passing the little robot without a second glance. Seeing the 6E41 and its robotic colleagues making their deliveries has become quite normal. You could be forgiven for thinking that the 6E41 is some kind of cross between a robotic vacuum cleaner and R2-D2, the rotund robot from the Star Wars films. In fact, the 6E41 is competing in the battle of the last mile – the problem of getting goods to end customers.In just the first three months of 2018, 14.6 billion euro of goods were delivered to homes across Germany – some 10.6 per cent more than in the previous year. German business magazine “Manager Magazin” has already coined a phrase for this situation, calling it “Dauer-Weihnachten”, or “Extended Christmas.”
20 %
of respondents have decided not to order books, CDs, DVDs and video games at some point in the past due to long delivery times
of respondents have decided not to order books, CDs, DVDs and video games at some point in the past due to long delivery times
26 %
of respondents have decided not to order medication at some point in the past due to long delivery times
of respondents have decided not to order medication at some point in the past due to long delivery times
27 %
of respondents have decided not to order groceries at some point in the past due to long delivery times
of respondents have decided not to order groceries at some point in the past due to long delivery times
9 %
of respondents have decided not to order cosmetics at some point in the past due to long delivery times
of respondents have decided not to order cosmetics at some point in the past due to long delivery times
18 %
of respondents have decided not to order a toy at some point in the past due to long delivery times
of respondents have decided not to order a toy at some point in the past due to long delivery times
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20 %
of respondents have decided not to order books, CDs, DVDs and video games at some point in the past due to long delivery times
26 %
of respondents have decided not to order medication at some point in the past due to long delivery times
27 %
of respondents have decided not to order groceries at some point in the past due to long delivery times
9 %
of respondents have decided not to order cosmetics at some point in the past due to long delivery times
18 %
of respondents have decided not to order a toy at some point in the past due to long delivery times
Extended Christmas sounds fun, but it also means increasing pressure for logistics service providers. For many years now, digitalization in the logistics segment has been represented by the squeaking tires, moving rotors and six wheels of devices like the 6E41. Electric vans, drones, freight bicycles and delivery robots have all been designed to circumvent our crowded roads.These devices are controlled by ever more complex algorithms that process increasing volumes of data as well as learning from each trip.Logistics concepts have gradually become so effective that processing an order now takes just a few minutes rather than the days or hours expected in the past. Whether you’re ordering a hot pizza, wine or new gadgets – anything can now be delivered straight to your door.
More demanding customer expectations
CHAPTER 1More demanding customer expectationsLogistics was once a rather analog business: The driver looked at a printed dispatch list, drove to the first recipient’s location and then worked through the remaining customers in turn. Then along came Amazon.
Customers have come to expect the lightning-fast free deliveries offered by the Internet retailer, which even provides same-day delivery in major cities. Amazon has now entered the logistics market itself“Amazon has direct contact with the customer and knows what’s in the packages, giving it an advantage when it comes to deliveries,” says Lukas Wrede at MHP.It is also better for Amazon to simply employ the subcontractors who are currently working for logistics companies. The customers who love Amazon are driving this behavior. Anything can be delivered. And anything can be delivered fast if that’s what you want.
“Instant delivery” are the two magic words causing goods packers to break out in a cold sweat and making the logistics chain the focus of scrutiny by private and corporate customers alike.“Drones and delivery robots will not replace normal logistics workflows, but they will soon complement them,” explains Wrede. “Completely new services will be possible as a result.”
Predictive deliveries: The warehouse that can predict the future
CHAPTER 2Predictive deliveries: The warehouse that can predict the futureLogistics is still a game that involves several unknown elements right up until the last moment. It would be a lot easier to know beforehand what a customer plans to buy and when. This idea is not as implausible as it first sounds. Predictive solutions are designed to make it possible. If you can guess what needs to be delivered tomorrow, the logistics process moves much faster. You need to know your customers well to make this happen – and be aware of the latest trends.
Berlin-based start-up Lesara promotes its offering as “Top trends in fashion and lifestyle” and functions by scouring Instagram and Facebook for trends in order to predict which clothes customers are likely to order soon and then stock up on these items. New products found via this method are available to order from Lesara just ten days later.
Cargonexx takes a different approach: This start-up in Hamburg arranges freight jobs. The price is essentially unbeatable because Cargonexx can predict the capacity of individual truck routes. A neural artificial intelligence solution makes this possible by working out the most cost-effective price for the job – the job can then be quoted at an unbeatable price.
Speed through forecasting
CHAPTER 3Speed through forecastingLogistics processes are always at the mercy of traffic in cities. And then there’s the question of whether the full addresses have been provided. And whether the recipient is even there to accept the delivery.
Mathias Baur plans to overcome these challenges with his start-up Smartlane, a company that gathers transport data. Working with his three co-founders, the computer scientist has developed a transport mining solution.“We collect as much information as possible in order to create a database,” explains Baur.The software takes the previous day's data from the delivery van and looks for patterns that have caused delays. The software then learns from the information for next time.
“You can learn something new every day when it comes to logistics. And that also means that you can get better every day,” says Baur.Baur’s background is in science. He researched algorithms for optimizing traffic issues for self-driving cars while at the Technical University of Munich. The systems available to date have not made sufficient use of the wealth of data out there. Smartlane uses transport management data plus real-time traffic data. This combination allows the algorithm to learn information from past deliveries, such as the amount of time that the driver spends at a specific address. “Drivers spend two minutes at a terraced house. By contrast, they need at least 15 minutes when delivering to an address on a university campus.”
A bit like a computer game
CHAPTER 4A bit like a computer gameThe Smartlane software GUI is colorful with an intuitive operating concept that functions almost like a computer game. The AI algorithms deliver fully automated route optimization in a single click, with the aim of helping the delivery company save up to 40 per cent on costs by using fewer routes.
“Thanks to our browser-based planning tool, we can help even small and medium-sized companies to quickly get started with digitalization,” says Baur.
“Jobs are recorded with just a few clicks and the routes are automatically planned.”From a mathematical perspective, the optimization algorithm is very good, but the developers are still working on the human factor. In other words, the customer’s requirements. For example, some customers want their deliveries from same driver each time. “You will soon be able to specify these requirements manually,” explains Baur.
The troublesome and expensive last mile
CHAPTER 5The troublesome and expensive last mileThe last mile to the customer will remain the greatest and most expensive challenge as logistics moves forward. Around 40 per cent of transportation costs are incurred at this point in the chain.
Employing people to deliver packages is, and will always be, expensive. In fact, service providers in the booming delivery market are currently finding it difficult to employ people in these roles. This is a gap that new specialists such as Starship, Liefery and Skycart are hoping to fill, using their flexible, app-based offerings to overtake traditional logistics companies. “The faster the customer wants the goods, the higher the cost of delivery, regardless of the technology used,” says MHP logistics expert, Julian Popp.The opportunity to be better and faster in niche areas makes logistics attractive to start-ups.
Admittedly, building a delivery fleet, paying drivers and developing software is an expensive business. These are the elements that make same-day deliveries to customers so complicated. And difficult for those who are new to the game. Starship is actually hoping to completely eliminate the need for drivers.
The Mars rover that’s taking to the streets
CHAPTER 6The Mars rover that’s taking to the streetsHendrik Albers, who is responsible for Starship Technologies operations in Germany, is an advocate of the 6E41 delivery robot. “Our goal is to offer a decentralized and cost-effective solution for instant delivery,’ says Albers.
The small logistics robot is a realistic hope for mastering the last mile. “Any business owner can send for one of our robots – we’ve developed an app for that. The robot delivers the goods to the customer in 30 minutes for just one euro.” The Starship rovers are not cars – they share the sidewalk with pedestrians. For this reason they have a maximum speed of around 6 km/h. The two founders of Starship, Ahti Heinla and Janus Friis, actually wanted to build a Mars rover until they realized that there is a need for robust robots in our cities here. The Starship delivery robot is now in its fifth generation and is almost ready for mass production.
It became clear when testing the previous versions in Germany that every one of these robots required human supervision. But this is now set to change. Once an area has been mapped, the delivery robots can move autonomously through a section of a city to the customer’s front door. Customers receive an SMS on their cell phones to indicate that the robot has arrived with fresh pizza, wine, etc.“Imagine you are socializing with friends and you run out of wine. You would never call a taxi or get a bicycle courier to bring more. But maybe you would send for one of our robots,” says Albers.
Airmail meets the robo-postman
CHAPTER 7Airmail meets the robo-postmanIn the Skycart promotional video, a hexagonal drone with a dome-shaped cabin carries a yellow parcel over lakes and fields in the Swiss Alps. The drone itself is fairly large, with a wingspan of 1.80 meters and the ability to cover up to twenty kilometers. The drone drops the parcel at the front door of a solitary wood cabin, where it is collected by by the recipient.
“Our drones are a good way to complement the robots that are available,” says Wrede, who is a logistics expert at MHP and also the founder of delivery drone manufacturer Skycart. Wrede’s vision is for drones to transport shipments to predefined hubs because it’s difficult to land these devices in cities. The shipments would then be picked up by robots that can take the goods to the customer’s front door. Technical and legal concerns still stand in the way of drones regularly being used as a delivery method.
German air traffic controller Deutsche Flugsicherung GmbH is already looking at how drones could be integrated into airspace as a new means of transport.“These plans are already well advanced,” says Wrede.
Space is scarce
CHAPTER 8Space is scarceThe concept of using delivery drones is very promising because space in cities is becoming increasingly scarce, particularly in inner city areas where the hunt goes on for cost-effective, quiet and ecologically sustainable solutions. Delivery vans have already become second choice as food delivery services and bicycle couriers jostle for pole position in the cycle lanes.
Even top dog Amazon would like to know sooner what customers are planning to buy.The tech giant is working on various depot solutions and has already submitted a patent application for its most visionary idea: warehouses in the form of airships that are anchored over cities with goods being collected by drones. Another concept involves a warehouse that looks like an oversized beehive, from which drones take off and land.
Underground solutions are also being considered for transporting goods. Swiss company Cargo sous terrain is already pressing ahead with a project of this nature. The plan is to build a tunnel between Zurich and a number of industrial areas. The tunnel will house an induction rail system used by automated electric vehicles to transport goods. The start-up has already acquired CHF 100 million of capital for the project.
The goal is to reduce the number of trucks on the highway by 40 per cent and in cities by 30 per cent once the tunnel is completed in 2045.Even Hyperloop, the concept of transportation via tube promoted by Elon Musk, is still being discussed as a freight transportation system. The possibility of connecting industrial areas and large factories is of particular interest.
The role of logistics in smart production
KAPITEL 9The role of logistics in smart production“The Fourth Industrial Revolution encourages companies to completely rethink logistics. In fact, it is also forcing companies to do so,” says Julian Popp, who has been researching new logistics models as part of the ARENA2036 project.
While it may be annoying but bearable for Amazon customers to wait a day longer for their new gadgets, longer lead times cause genuine problems for production. Manufacturers often have to resort to expensive express deliveries.
Better coordination between production and logistics represents a viable alternative. Modern sensors and the real-time data they generate can be used to ensure that the sequence of production slots is shifted slightly to create a little more leeway in the fixed time slot for delivering materials. Significant cost savings can be achieved with this approach. A good example is the Audi Hungaria plant in Györ (Hungary), which is manufacturing a new electric motor. Instead of a rigid assembly line with a defined production sequence, the plant operates a matrix layout with a certain level of flexibility when it comes to the production sequence.
This principle is being taken as far as it can go in the premium segment, which sees vehicles increasingly being customized.Manufacturers are working with a batch size of one. This represents a particular logistics challenge, as the models are so unique they all require different parts.Production on this scale is possible if you get rid of the conveyor belt and the cycle. Driverless transport vehicles trundle among the racks and transport the parts to the assembly line. Good networking with suppliers is essential if an automated process of stock replenishment is to run smoothly.
Dispatchers become suppliers
CHAPTER 10Dispatchers become suppliersSometimes it helps to ask who is actually sending what to whom. And then turn it on its head. A recent project at MAHLE focused on reworking how the roles of supplier, dispatcher and recipient are distributed.
Instead of parts being dispatched to MAHLE, the automotive supplier now collects them itself, giving it full control over its transport logistics process.
“The aim of the project was to create both a more transparent process and the ability to utilize the capacity of transport resources in the best way,” explains Bastian Kempe, who is responsible for Digital Supply Chain Solutions at MHP.The data from the suppliers and the delivery companies was combined in an SAP solution. “Reworking the process made it much more fluid and transparent for the customer. The transport companies also benefit because the routes are planned more efficiently,” says Kempe.
Take-away
CHAPTER 11Take-awayWhether the process relies on big data, autonomous robots or drone technology, logistics is crucial when it comes to intelligently networking all areas of life plus production.
Logistics concepts are now seeking to capture new spaces in which to operate, such as the airspace above cities. They are driving digitalization in industry, trade and production. And the volume of data relevant to logistics has increased dramatically.The big challenge now is to collect, collate and utilize this data.New technologies are making the art of logistics visible, transparent and tangible, while increasing the complexity of this concept beyond anything we could have imagined.
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The miracle of logistics
It has six wheels, wears a white hat and moves a little like a moon buggy. The vehicle, known by its designation 6E41, uses the six wheels to feel its way along the sidewalk.
These devices are controlled by ever more complex algorithms that process increasing volumes of data as well as learning from each trip.
More demanding customer expectations
“Amazon has direct contact with the customer and knows what’s in the packages, giving it an advantage when it comes to deliveries,” says Lukas Wrede at MHP.
“Instant delivery” are the two magic words causing goods packers to break out in a cold sweat and making the logistics chain the focus of scrutiny by private and corporate customers alike.
Predictive deliveries: The warehouse that can predict the future
Speed through forecasting
“We collect as much information as possible in order to create a database,” explains Baur.
“You can learn something new every day when it comes to logistics. And that also means that you can get better every day,” says Baur.
A bit like a computer game
“Thanks to our browser-based planning tool, we can help even small and medium-sized companies to quickly get started with digitalization,” says Baur.
“Jobs are recorded with just a few clicks and the routes are automatically planned.”
The troublesome and expensive last mile
The opportunity to be better and faster in niche areas makes logistics attractive to start-ups.
Admittedly, building a delivery fleet, paying drivers and developing software is an expensive business. These are the elements that make same-day deliveries to customers so complicated. And difficult for those who are new to the game. Starship is actually hoping to completely eliminate the need for drivers.
The Mars rover that’s taking to the streets
Airmail meets the robo-postman
German air traffic controller Deutsche Flugsicherung GmbH is already looking at how drones could be integrated into airspace as a new means of transport.
Space is scarce
Even top dog Amazon would like to know sooner what customers are planning to buy.
The goal is to reduce the number of trucks on the highway by 40 per cent and in cities by 30 per cent once the tunnel is completed in 2045.
The role of logistics in smart production
While it may be annoying but bearable for Amazon customers to wait a day longer for their new gadgets, longer lead times cause genuine problems for production. Manufacturers often have to resort to expensive express deliveries.
Manufacturers are working with a batch size of one. This represents a particular logistics challenge, as the models are so unique they all require different parts.
Dispatchers become suppliers
Instead of parts being dispatched to MAHLE, the automotive supplier now collects them itself, giving it full control over its transport logistics process.
Take-away
The big challenge now is to collect, collate and utilize this data.
Already discovered?
The miracle of logistics
It has six wheels, wears a white hat and moves a little like a moon buggy. The vehicle, known by its designation 6E41, uses the six wheels to feel its way along the sidewalk.
These devices are controlled by ever more complex algorithms that process increasing volumes of data as well as learning from each trip.
More demanding customer expectations
“Amazon has direct contact with the customer and knows what’s in the packages, giving it an advantage when it comes to deliveries,” says Lukas Wrede at MHP.
“Instant delivery” are the two magic words causing goods packers to break out in a cold sweat and making the logistics chain the focus of scrutiny by private and corporate customers alike.
Predictive deliveries: The warehouse that can predict the future
Speed through forecasting
“We collect as much information as possible in order to create a database,” explains Baur.
“You can learn something new every day when it comes to logistics. And that also means that you can get better every day,” says Baur.
A bit like a computer game
“Thanks to our browser-based planning tool, we can help even small and medium-sized companies to quickly get started with digitalization,” says Baur.
“Jobs are recorded with just a few clicks and the routes are automatically planned.”
The troublesome and expensive last mile
The opportunity to be better and faster in niche areas makes logistics attractive to start-ups.
Admittedly, building a delivery fleet, paying drivers and developing software is an expensive business. These are the elements that make same-day deliveries to customers so complicated. And difficult for those who are new to the game. Starship is actually hoping to completely eliminate the need for drivers.
The Mars rover that’s taking to the streets
Airmail meets the robo-postman
German air traffic controller Deutsche Flugsicherung GmbH is already looking at how drones could be integrated into airspace as a new means of transport.
Space is scarce
Even top dog Amazon would like to know sooner what customers are planning to buy.
The goal is to reduce the number of trucks on the highway by 40 per cent and in cities by 30 per cent once the tunnel is completed in 2045.
The role of logistics in smart production
While it may be annoying but bearable for Amazon customers to wait a day longer for their new gadgets, longer lead times cause genuine problems for production. Manufacturers often have to resort to expensive express deliveries.
Manufacturers are working with a batch size of one. This represents a particular logistics challenge, as the models are so unique they all require different parts.
Dispatchers become suppliers
Instead of parts being dispatched to MAHLE, the automotive supplier now collects them itself, giving it full control over its transport logistics process.
Take-away
The big challenge now is to collect, collate and utilize this data.
Already discovered?
