Enhancing the customer experience through automation

The drive to improve is as old as industry. Increased productivity, consistent outputs and lower costs have remained a perennially attractive goal, particularly in supply chain logistics. Automation is now the latest wave of improvements piquing the interest of modern companies

Kari Banick

General Manager Analytics
and Design Services, Linfox

Until recently businesses have looked at their supply chains and asked themselves a simple question: how can we minimise costs? Online shopping has changed that. With customers focussed on getting what they want, when they want it, a supply chain that is fast, accurate, transparent and can flex with demand is now a differentiator and source of value to a business.

“Cost is still important, of course,” said Kari Banick, General Manager Analytics and Design Services, Linfox. “But with online shopping the new normal, e-fulfillment is now critical to the customer experience. Very soon, ‘e-fulfillment’ will just be fulfillment. And customers are already judging brands by the fulfillment experience. Businesses need to recalibrate their thinking and examine every part of their supply chains for opportunities to optimise the customer experience as well as minimise cost.”

When automation in logistics often focusses on connected autonomous vehicles (see Solutions: Transport of tomorrow for more on this topic), it’s important to remember the warehouse. The four walls of the intralogistics space present many opportunities for a business. “Digitisation is the key,” said Kari. “Digital data and cheaper, faster computing make it possible to deal with the volume and complexity. We can predict demand, anticipate it by moving goods into position on the warehouse floor, prioritise and respond in a way that we never could before.”

We’ve already witnessed significant advances in intralogistics automation and many businesses are now deploying second and third-generation technologies to improve safety, accuracy, tracking and efficiency, with each generation setting a new baseline on the costs of operation.

And each new generation is coming through very quickly. In 2008, Kari recalls the implementation of the first fully automated grocery retail operation for a leading wholesaler in the United States. It was the first of its kind with automatic cranes for pallet handling and automated pallet-building machines. Conveyors moved the pallets and retail orders to and from the receiving and shipping docks. Fast forward to Witron, in Germany this year, where the third generation from that vendor rolled out the door.

The technology continues to improve as we better understand how it can lift efficiency and improve the customer experience. But it is also clear that the human-machine interface is not going away. To successfully automate, teams need to be doing what humans do best solving problems and focussing on the customer. As customer needs become more nuanced and particular down to a demographic of one people need to be putting their minds to how they can connect to the customer in real time and differentiate from competitors.

“Every business is different. Different risks and opportunities, different pain points, customers with different expectations and different boundaries when it comes to sharing information, and different organisational values,” said Kari.

Amazon’s approach to automation, for example, is purely about customer experience, rather than minimising costs. Using mobile robotics, they have designed their capability so that a customer can receive their parcel in two hours, or the same day, depending on the service-level agreement.

Amazon now anticipates your purchase, moving goods from one warehouse to another, based on the fact that you have been looking at that product on the website. “Amazon can readily see the choice being driven by the quick order fulfillment cycle time on the vast number of single item orders they receive,” said Kari.

“If customers expect speed, then the only way to get that is with automation. The lesson from the Amazon approach is to get everything you can from both humans and machines,” said Kari.

Amazon is also showing us how to integrate information. To anticipate your purchase, they connect the data created when you look at a product on your device, to data about their inventory. Having a common platform for data generated across the whole supply network is crucial.

“Our team is very focussed on working with our partners to get the solution right for them. What is good for Amazon is not necessarily good for a business-to-business operation in the Australian market. Linfox is agnostic about the solution and when I say solution, I mean a long-term, future-proofed strategy that considers future requirements while we also deliver value today. It’s not a shiny robot.”

Kari says Australian businesses frequently consult her team to better understand how they can integrate end-customer fulfillment, find opportunities to automate, and delay building more warehouses by storing more effectively. They also want to respond better to the proliferation of new products hitting the market and the challenges of promotion and critical sales periods. The cost of not being on-time and accurate with complete orders is increasing as well. “We are enhancing operational performance by analysing current models and evaluating the what-ifs,” said Kari.

One of the challenges is that the more complex or integrated the solution, the higher the initial cost, but with longer-term returns. This means that strong, collaborative, partnerships are really the only way forward. “Our values as an organisation come into play too trust, for example, is essential if you are going to adopt this long-term, strategic approach, especially in an environment that is changing quickly,” said Kari.

Linfox has been providing supply chain solutions to customers for decades now, always keeping pace with best technologies and business practices. “The changes coming through now, driven by digitisation, are exponential,” said Kari. “We’re ready. We’ve got the depth and we’ve got the fresh experience, and we’re here to help our customers get the best performance possible out of their operations.”

Linfox leaders inspect the latest automated warehouse technologies.

Keeping pace

At the annual Linfox Senior Leadership Team Conference in August, Linfox leaders received briefings on the latest warehouse, security and vehicle automation technologies. Technology providers showcased their current and future products including warehouse automation solutions and autonomous drones.

Linfox continues to keep pace with new technologies, employing specialists within the team and partnering with leading external suppliers of new technology.