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Simon Duddy

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Waterworld warehouses 19/07/2017

Amazon has done it again. In filing a patent for underwater warehouses, the online retail behemoth has radically shifted our concept of what the warehouse could be.

The outlandish idea would see depots submerged underwater, with items summoned to the surface by acoustic vibrations.

Details of the patent, which was filed earlier this year in the US, show Amazon's vision for using lakes, reservoirs and purpose-built pools as fulfilment centres.

It shows a number of ways stock would be handled inside an Aquatic Storage Facility, such as items being dropped into the pools by parachutes or trucks.

As far as I can see there is no mention of water slides. Shame.

But in each case, packages would be contained within a watertight box, complete with an air canister. When the item is ordered by a customer, a noise transmitted under water would trigger the air canister to inflate a balloon to float the package to the surface.

The driver behind the idea is the search for a more space efficient way of storing items. Whether this rationale is strong enough to overcome the many obvious difficulties is another matter.

The concept joins another ‘out there’ Amazon patent unveiled last year, the floating warehouse in the sky served by drones.  

I am beginning to think these ideas may be just noise to distract us from the uncomfortable fact that Amazon is on course to take over much of the available traditional warehousing in key markets around the world, such as the UK.

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Software in the driving seat 26/06/2017

If you want to have a look at the modern face of logistics, you could do worse than visit the distribution centre of fast fashion retailer Quiz in Bellshill, near Glasgow.

On my recent visit, I was struck by its cross-dock operation. Distribution centre manager Alan More describes its role as pausing stock rather than warehouse storage. The aim is to swiftly carry out both store replenishment and online order fulfilment. In this kind of operation, the IT is just as important as the physical infrastructure. Shop managers, the merchandising team and supply chain management have got to be able to communicate seamlessly, and share a single view of stock. As well as installing the automated materials handling equipment for Quiz, systems integrator Logistex played a key role in supplying a WMS and tying this in with supply chain and ERP software.

I also visited Dematic’s new HQ near Banbury recently. It’s a very impressive facility, geared up for hosting clients and attracting talent. It’s like a little bit of Silicon Valley has dropped down to the Oxfordshire countryside. The event featured a rare opportunity to speak to Dematic’s top management and it was interesting to hear them talk about the primacy of software, it is where the innovation is, they say, and where Dematic spends most of its R&D budget. It also means you don’t always have to buy quite so much hardware. If your software can act as an order buffer, for example, then why do it the old way using a physical buffer of conveyors, racking etc?

Arguably Descartes is taking this idea further still, with the release of its Pixi* eCommerce WMS. Ignore the irritating name, the idea is the software will automate man to goods picking and other processes in your warehouse to drive the kind of efficiencies you will need to keep up with consumer delivery expectations. It sounds like it could save money as the software is designed to begin to drive efficiencies with your existing warehouse set-up, without requiring additional investment in hardware.

Indeed, if you have had experiences with new MHE systems, we’d like to hear about it. Drop us a line at sduddy@western-bp.co.uk and let us know. Knowledge sharing is valuable, there is almost always something that can be learned from hearing about the experiences of people in similar situations. In terms of other new products, I’d like to point you towards TCM’s new counterbalance truck, one of a number of new products the manufacturer has or will be unveiling this year.

Also, check out our annual supplement – The Warehouse – which features a dock shelter from Hörmann that is especially designed for vans. We are seeing the cascade of impacts that come from changing consumer shopping habits. More online retail orders leads to do more delivery vans on the road, which leads to more vans being loaded at DCs, which creates the demand for bespoke loading equipment, to ensure vans are loading as efficiently and safely as possible.

And look at that! We’ve got the to the end of the piece without mentioning politics, Brexit, or the General Election. So, let’s leave it there, as I am sure you are hearing enough about our super competent politicians elsewhere!

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A bit of how’s your grandfather 12/04/2017

We have an interesting take on Brexit this month from James Rollo as part of our write up of the recent Keep Britain Trading Conference held by the Freight Transport Association.

He’s an experienced negotiator of trade agreements, and says they tend to be slow, unsentimental and he tends to take a pessimistic view of the motivations of those engaged in them.

Among his more positive suggestions were that the UK should informally harmonise with the EU in terms of customs, tariffs, rules and regulations. This includes grandfathering. No, this isn’t taking an aged relative to the races for a cheeky bet and a pint of stout, it’s when trade agreements lapse and we act like they haven’t and continue as normal. The UK has trade deals via the EU with 50-odd nations. These will all become void when the UK leaves, but with grandfathering there would be an informal arrangement where trade continues as usual until both sides agree otherwise. Rollo thinks this would be great for the UK, but isn’t so sure all other countries will be up for it. Put yourself in the shoes of the Koreans, for example, they might not be willing to concede the same measures to the UK as they conceded in concluding a trade deal with the EU as a whole.

He also discussed the red lines that both sides have drawn up in the discussions, seeing, on paper, very little room for compromise. Basically, if a no-deal stalemate is to be avoided, either the UK or the EU is going to have to concede things it has said it will not concede. Who will blink first in this game of bluff?

For me, it is probable it will be the UK, it’s smaller and more exposed to the EU than vice versa, but there is plenty of opinion out there backing the UK to pull it off. There is a perception that the EU is a bit soft and bloated and that the UK will be too nimble and sharp elbowed for it. Indeed I spoke to a logistics professional a while back, not a Leave voter, but someone who was scathing of the way the EU has been run over recent years, and who suggested ‘we should be able to run rings around that lot’.

I just hope common sense prevails and a compromise is reached that spares either side crippling cost or too abject a humiliation. Too much to hope for? We’ll see…

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Scotland Works for Safer Logistics 12/04/2017

We’re very excited that our Safer Logistics brand will make it debut in Scotland in May, as part of the Scotland Works exhibition (May 3-4 at Glasgow’s SEC).

Safer Logistics partners for the event are the Fork Lift Truck Association (FLTA), RTITB, the regulatory body for workplace transport training, and the Chartered Institute of Logistics & Transport (CILT). Barrier specialist A-Safe is sponsor of the Safer Logistics Theatre area.

Visitors to Safer Logistics Scotland will benefit from key safety learnings from one of the world’s leading air conditioning manufacturers. The team from the Livingston site of Mitsubishi Electric Air Conditioning Systems Europe will present on both days of the key event for boosting safety in Scotland’s logistics industry. Attendees at the free event will hear how Mitsubishi promotes a positive safety culture in a big, busy complex containing six different facilities in Livingston with over 900 employees.

We are delighted with the strength of the Safer Logistics Scotland programme. The presence of such a number of industry bodies as well as heavyweight manufacturers based in Scotland mean there will be much to learn for those that can take a day out of the office or warehouse to attend this free conference.

We often hear how visitors to safety related events pick up advice, or make contacts that help their companies push on to the next stage of improving safety in their operations. This is the perfect opportunity for that.

Safer Logistics Scotland is part of a suite of six related B2B exhibitions for the Scottish market at Scotland’s best venue – Glasgow’s SEC. With its unrivalled facilities, central location and easy transport access, the soon to launch Scotland Works bids to become the best show in Scotland - and importantly show the world that Scotland has got what it takes.

You can see more at www.scotlandworks.com.

Safer Logistics is already a well established seminar and feature area at The Health & Safety Event at the NEC Birmingham (March 21-23), and launched as a campaign four years ago in Handling & Storage Solutions magazine where it has been helping to raise awareness on logistics safety hot spots ever since.

FLTA Awards

I had a great time at the recent FLTA Awards, attending as the editor of Handling and Storage Solutions, the media partner for the Awards. We’re proud to champion the FLTA Awards for Excellence and its efforts to showcase our industry’s leading lights. This year, to maintain the integrity of the Awards and avoid potential online voting manipulation, changes were made to the voting process, with the introduction of a jury to ensure that winners are determined on merit alone. This group of 12 men and women brought admirable experience and technical knowledge to the job and the Awards are all the better for it. You can see all the winners and finalists in our FLTA Awards special in this month’s Forklifts supplement.

Jungheinrich interview

A wide-ranging interview with Jan Lorenz, UK MD at Jungheinrich also features in our annual Forklifts supplement. It was interesting to here how different sectors are regarding Brexit very differently in investment terms, with those seeking to make long term investments more reluctant to commit.

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Is last mile logistics nearing a solution? 13/02/2017

A few years ago I wrote about the speed of growth in eCommerce and how logistics may struggle to cope with it. I thought if the fulfillment function (both in terms of warehousing and transport) reached its capacity, prices will inevitably be pushed up and that would put the brakes on the growth of online retail. While it is true that growing parcel volume and demand for fast and convenient delivery have been pushing fulfilment costs up dramatically, that might be about to change.

If it does so, the assumption that online retail will plateau may need to be re-visited. At The Delivery Conference Accenture spoke about the last mile, highlighting the start-ups that are entering the market. They are built around a ‘density’ delivery model utilising algorithms and self-employed couriers; rather than hard assets such as warehouses and trucks and vans. Basically they use self-employed couriers in their own vehicles to, at short notice of an order, go to the nearest pick up point, collect a parcel and deliver it to a consumer nearby. This operates at a much lower cost than a traditional logistics model, which will in turn give retailers more leeway to extend online sales.

This should not be as disruptive as early online retail, because it builds on existing retail store footprint and its attendant supply chain, using them as pseudo distribution centres. A truly Omnichannel solution. It’s a B2B variant on Click & Collect, with a courier picking up for the consumer and taking care of the last mile. Also in the Delivery Conference feature, we have building products supplier Wickes explaining how it delivers sameday and one hour slots with a courier using its Click & Collect process.

The model will be a threat to the traditional courier model, which sends vans from location to location, dropping off parcels. It is asset heavy and more expensive, with couriers owning sortation centres, warehouses, fleets of trucks and vans etc. However, it remains to be seen how scalable density models can be. They may be restricted to heavily built up areas, and their reliance on casual labour may cause problems down the line. We have an interview with one such start-up, Stuart Delivery.

eCommerce is also becoming more personalised for consumers. Their habits are monitored and retailers try to predict what they will want, and cater to their every whim - more choice and faster and more convenient deliveries. But is there a direct correlation between increased personalisation for consumers and increased dehumanisation of those working in the logistics sector? We see reports of workers at e-tailer Boohoo’s Burnley warehouse receiving a ‘strike’ for smiling, and there was the well-publicised abuses at Sports Direct.

I assume if you went back to the pre-eCommerce era, people who worked in warehouses were not subjected to these stresses and tightly regulated regimes. It’s important that our desire to enhance the experience of online shoppers does not diminish some of those responsible for making it happen.

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FLTA Awards Judging Day impresses 17/01/2017

In December, I attended the FLTA Awards Judging Day, looking closely at a number of product, company and individual categories. I was greatly impressed by the depth of quality on show.

All finalists deserve great credit for their nominations and the effort spent on making their case. The debate the judges had on the nominees was stimulating, it’s great to hear the opinions of a range of intelligent, knowledgable people from a range of different perspectives in the forklift, and broader logistics world. We can’t wait until the Awards night itself on March 4 at the Telford International Centre.

As well as being an enjoyable experience, there is no doubt the Judging Panel has led to a fairer process than the online voting system, which was open to abuse, just think ‘Boaty McBoatface’.

I was very impressed with the probity of the process and all of the judges involved and this will certainly increase the gravitas the FLTA Awards already undoubtedly enjoys.

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Black Friday challenge - what's the answer? 25/11/2016

Black Friday is relatively recent introduction to the UK’s retail calendar and while the front end of retail - the sales teams, the marketing bods, the merchandisers are no doubt rubbing their hands with glee – at the operations end it simply represents a massive challenge.

Indeed according to a report from supply chain consultancy LCP, many retailers are now waking up to the reality that it might not be such a great idea after all, because while the sales do surely flow in, so do the costs associated with selling so much merchandise in singles, and delivering them direct to the customer rather than to those old fashioned things that in the old days we used to call ‘shops’.

As Stuart Higgins, retail partner at LCP succinctly summarises: “Profit during Black Friday is not driven by sales increases; it is driven by the additional operating cost and the complexity of managing operational peaks.”

Its survey found that most UK retailers find Black Friday ‘margin erosive and unprofitable’. And yet most retailers, save perhaps a few such as Asda, cannot resist participating.

Separate undercover investigations have highlighted how difficult it can be keep food delivery vans clean while running a fast and lean operation. The BBC also raised concerns that some third party couriers delivering for Amazon were expecting too much from their drivers and paying them too little.

These challenges place pressure on the supply chain to improve efficiency. One way this can be achieved is through the intelligent roll-out of automated solutions. I enjoyed visiting Pharmacy2U in Leeds earlier last month, true, the online pharmacy does not operate in the the retail sphere, but the business shares many characteristics. What impressed me most about Daniel Lee, chief operating officer at Pharmacy2U was the serious and thorough approach he took to the upgrade of his automated warehouse – which was in turn absolutely key to the growth of his business. For anyone facing up to such a challenge now or in the future, this article is essential reading.

This year’s Fork Lift Truck Association Pick of the Year highlights the nominees for the prestigious FLTA Awards for Excellence, which takes place in early March. This is the highlight  of the materials handling calendar and is always  a great networking event and a night of great  fun, whether you are a winner, a runner-up or simply enjoying the atmosphere. The Pick of the Year supplement offers a great insight into the best products of the year in the categories of Environment, Ergonomics, Safety and Innovation, as well as giving companies the chance to compete for the Safe Site award, given to the company that demonstrates the greatest improvements in forklift safety in the year. The awards also laud the achievements of those who have devoted years of service to both the association and the industry. In years past, some of the categories were decided by public vote, but this year see the start of a new era of Awards decided by a Jury of industry experts, I am proud to say I will be joining the panel.

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The hardening reality of Brexit 30/09/2016

A white paper from LCP Consulting makes for interesting reading as Brexit starts to get real. Just as Nissan has asked the UK Government to compensate the manufacturer in the event of a 'hard Brexit', LCP Consulting gives an in-depth and thoughtful reading of how Brexit could impact the supply chain.

Nissan made the request just as it plans to make its latest investment - for manufacturing the next version of the Qashqai. It says it cannot wait for Brexit to happen before it decides where the cars will be assembled. The implication is that if the UK Government wants the Sunderland plant to get the work, it must agree to compensate Nissan if the company faces tariffs to export cars to the EU post-Brexit.

The LCP story is a snapshot of an in-depth white paper produced by the consultancy firm. Among the insights are that British retailer Next has said the weakness of the pound since Brexit is likely to increase sourcing costs and as a result, consumers may see price rises of up to 5%. In order to mitigate costs further, they are continuing to increase efficiency, improve capabilities and develop sources of supply in places such as Bangladesh, Cambodia, and Burma.

Low tax

It was also interesting to hear the opinions of Francis Maude, Baron of Horsham, who until earlier this year was Minister of State for Trade and Investment.

Maude spoke at the PPMA Total Show and outlined that Brexit gave the UK potential to 'create a great environment for businesses but also more scope to screw it up'.

He added: "A disadvantage of leaving is we won't have the clout of being part of a bigger club. But advantages include that we are in favour of freedom of trade, not so in some parts of the EU, which means we can go as fast as we like.

"There should be low business tax to support exports. I hope Government will reduce corporation tax, which is already competitive in G20 terms. The closer we get to Ireland's 12.5%, the more attractive to business we will be."

This is an interesting viewpoint and it went down well at the show. But it assumes that the UK lowering corporate tax would be a decisive move. This would not necessarily be so. Small and relatively insignificant economies such as Ireland can slip under the radar to some extent, but the UK is too big to ignore.

I would expect the EU to react to negate such a move, even if they didn't reciprocate by cutting their own tax rates. Perhaps they would do so by imposing greater costs on the UK for doing business with the EU.

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Safety culture 02/09/2016

Mitsubishi Electric Air Conditioning Systems Europe is a company that emphasises empowerment of its workforce to be involved in all aspects of the business. 

The employees created a forklift safety initiative at its huge Livingston facilities to change operations from the bottom up. I visited the team to hear their story and take a tour of the business. We have an in-depth feature here although to be honest I could have written a much longer article, such is the wealth of employee buy-in at the site.

If the key to improving safety lies less in gizmos and risk assessments, but more in the safety culture that is created and sustained by the engagement of all levels of employees – then the Livingston site is a great example to all.

One of the forklift operators, process co-ordinator Scott Collins, summed up the importance of the initiative when he said: "I used to work at a place where unfortunately there was a death in the yard. I look back on this when we are working on these initiatives and it brings it home that health & safety is the most important thing in here. You can replace parts or forklifts, but you can't replace somebody's life."

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Agility key to your Brexit strategy 18/07/2016

I don't want to get bogged down in personal opinion on Brexit, or linger too long on predictions that are almost impossible to call. But I will quickly present the situation as I see it.

Brexit won't have any regulatory impact for two years at least and is unlikely to deliver an economic shock to the UK, as it is almost inconceivable the Government will fail to negotiate some sort of viable trade deal with the EU. So there is certainly no need to panic.

However, there will be some price to pay to access the EU club as a non-member. The price is the key and that may manifest itself in many and varied ways. For an example of one such potential cost, read Ian Stansfield's comment in our lead story regarding duties on goods imported to the UK for re-export to the EU.

So how best should you position yourself? As with all disruptive forces, there will be winners and losers. Just look at online retail - the major disruption caused by changing consumer buying habits has effectively created a new industry of online retailers, but not without trashing much of the old retail world that could not adapt. Agility is the key.

Businesses, and logistics operations, will need to be able to adapt. Equally it is important not to retreat into over-caution, and to continue to embrace the many opportunities that will unfold over the coming years.

I would urge readers to get involved, either directly or through industry bodies, and make it clear to politicians how important the logistics industry is to the running of UK plc, and what you need to ensure the logistics industry continues to be the effective strategic asset underlining the strength of the UK economy.

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PROFILE

Simon Duddy is an experienced B2B editor and has worked across a range of titles including Handling & Storage Solutions, Heating & Ventilating News and Arabian Computer News.