I recently had the opportunity to speak with Mike Khodl, VP of Differentiated Technologies at Dematic. We spoke mostly about achieving optimal warehouse performance. However, we discussed a number of key subtopics, beginning with the role of software intelligence in automated warehouses as a strategic value driver, and the critical role it plays in in managing the automation, manual activities, material flows, and order fulfillment within a facility. Subsequently, we discussed the broader concept of taking a holistic approach to warehouse performance improvement, including warehouse process design, solution selection, and the role of specific steps in achieving overall success in warehouse operations. Finally, we discussed the hot topic of grocery fulfillment and the challenges facing grocery operations as e-grocery growth accelerates across regions. Below are some key points made in the discussion. Watch the attached video for the full interview.
Warehouse Software as a Strategic Value Driver
Warehouse software has classically been viewed as warehouse control software or warehouse management software. A more contemporary view divides the discussion into three layers. Warehouse control is the layer that manages the real-time activities, giving directions to mechatronic systems to perform in an optimized way. The second layer is the execution layer that bridges the gap associated with overall material flow between the functional areas of a distribution area – creating functional linkages. Third, is the order management system that orchestrates the overall facility processes with a focus on the outbound objectives of the warehouse operation. Together, these three layers drive an optimized facility.
Methods for Achieving A Holistic Solution
Dematic has formalized the use of an OLE (overall logistics effectiveness) measurement into the grading and measuring of each functional element of a facility. The measurement process takes planning, machine capacities, system capacities, and quality measures into consideration. These measurements are then utilized as an element of judgement to determine if they are achieving the project’s operational goals. Dematic takes a holistic approach, helping customers develop an operating plan, which then drives what needs to be achieved and the measurements of that success.
The Rapidly Evolving Grocery Supply Chain
The grocery supply chain is evolving rapidly. Grocery is moving toward microfulfillment and urban fulfillment models. The underlying value driver is the ability to respond in a two to four-hour time frame with fresh goods. In short, the future of grocery is a very dynamic, very fluent fulfillment operation. In turn, grocers are pressured with instituting efficient and effective processes for picking those orders and then buffering those orders for last mile delivery or portal pickup at the grocery store. A subsequent challenge will be the ongoing performance and maintenance of the automation installed in this decentralized fulfillment model.
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