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Be brave and curious

06 January 2022

We have some great advice on warehouse automation from tech-led logistics firm GXO. Its UK & Ireland managing director Gavin Williams outlines some key options to consider and updates on GXO’s advances in automation.

TECHNOLOGY IS playing an increasingly important role in third party logistics.

GXO UK & Ireland managing director Gavin Williams, says around 30% of its operations are tech-led in some way.

“The most extreme example would be the Nestle facility at East Midlands Gateway, which went fully operational in April 2021, where it is very highly automated. But software tools and modular automation also play a key role.

“Be brave and curious, those that are deploying the technology will be the game changers. There’s greater risk in being left behind by not going for it, than there is in being brave.”

“The segment of our business that is tech-led is around 30% and growing. We think this figure compares to around 6% among our competition. I can’t remember any presentation in the last 18 months that hasn’t involved some level of tech in our proposition. The business case for technology is increasing because labour price inflation is ongoing. A business case that was sound and successful two years ago, is now many times more successful.”

The drive towards technology has not led to fewer workers. GXO is also increasing its head count, having taken on some 10,000 people in the UK in the last 12 months. It’s not about replacing people, says Gavin, it’s about making people more efficient at their jobs.

“We deploy the GXO Smart labour management tool to demand plan and make the workforce more efficient. It tracks an individual’s productivity,” he says.

“A manager’s job is to manage performance, and tools such as GXO Smart simply give better quality information to assist. I can remember starting in logistics 20 years ago and we’d manage people’s performance on spreadsheets. The new tools give more intelligent information.”

Modular automation

Gavin continues: “We are looking heavily at what I call modular technology. For example, AGVs are being rolled out throughout the UK business and globally. They take out wasted time, allowing operatives to focus on valued added tasks, such as improving pick accuracy. A major knock-on effect of the use of robots and AGVs, particularly in eCommerce, is greater picking and packing accuracy.”

In terms of advice on warehouse automation, Gavin urges firms to do your research, carry out pilot testing and learn fast. 

“Start small and modular and then rapidly scale up if it’s getting the results you want,” he explains. “At GXO, we don’t deploy the same tech across the business at once. We trial it, expand and move it across operations where it has credibility. 

“Be brave and curious, those that are deploying the technology will be the game changers. There’s greater risk in being left behind by not going for it, than there is in being brave. We aren’t always talking about huge sums of money, and you can lease equipment also, it’s easier to procure.”

The difference in tenders between now and ten years ago is that automated solutions are much more varied.

Gavin says: “In the past, large, expensive automated solutions that would have fairly fixed throughout for a long period were the norm. The technology that has been added recently is more modular and cheaper, you can lift it and shift it. It has a faster ROI, and is easier to train on.”

Contract length

Gavin also expanded on the impact of the pandemic and Brexit uncertainty on contract length.

“Change is a good thing for contract logistics players like us. There has been an increasing theme over the last few years where companies that have traditionally insourced have outsourced to us, partly because of the problems with the pandemic. 

“Contract lengths are increasing, our average is about 5 years. They are increasing partly because of technology. When you are  investing more in a customer’s business there needs to be an increase.”

Gavin continues: “We’re finding that customers are wanting to be strategic with contract logistics players like us. We may start with a small contract, for example, outbound eComm, but we can develop from there and talk to them about how we can improve upstream logistics as well.

“Our top 20 clients are all growing with us. The more strategic the relationship, the better the return is for both the customer and us.”

Peak planning

We also discussed peak planning with GXO, with Gavin outlining some of the ways the 3PL gets on top of this challenge.

“This Peak has been harder to prepare for, there has been greater labour uncertainty, due to a shrinking pool as well as absentees due to the pandemic. We’ve been managing the pandemic for nearly two years.

“We start planning for Peak in Easter. In 2021, customer forecasts were less certain about supply and how consumers were going to respond.

“Our top 20 clients are all growing with us. The more strategic the relationship, the better the return is for both the customer and us.”

“We work with a core of labour agencies that are aligned to our values. We have 240 sites in the UK and monitor on a regional basis, so we can see where we have shortfalls. 

“Taking returns into account, Peak will last until mid February. This is particularly an issue for the fashion sector. We can put in a white room, go through returned garments, sort out those that are damaged, so customers can get 90% of product quickly back in stock to be re-sold. It is good for customers and also good from sustainability perspective.”

For more information, visit www.gxo.com

 
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