Industry 4.0 Smart Warehousing Solution Shows Promise in Asia-Pacific

Subscribe To Download This Insight

4Q 2019 | IN-5634

Deutsche Post DHL Group’s supply chain solution arm, DHL Supply Chain, successfully deployed its DHL digital twin smart warehouse technology solution for Tetra Pak’s Singapore warehouse. The solution recreates a 3D model of the warehouse with Internet of Things (IoT) data collected from sensors, allowing for the real-time analysis, and thus optimization, of warehouse operations. This is the first time DHL’s digital twin project was launched at such a scale, with Asia-Pacific chosen for its first deployment.

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.

 

DHL Making Waves in APAC

NEWS


Deutsche Post DHL Group’s supply chain solution arm, DHL Supply Chain, successfully deployed its DHL digital twin smart warehouse technology solution for Tetra Pak’s Singapore warehouse. The solution recreates a 3D model of the warehouse with Internet of Things (IoT) data collected from sensors, allowing for the real-time analysis, and thus optimization, of warehouse operations. This is the first time DHL’s digital twin project was launched at such a scale, with Asia-Pacific chosen for its first deployment.

The solution helps the Tetra Pak warehouse:

  1. Reduce congestion and improve resource planning/workload allocation by equipping supervisors with real-time operational data from sensors;
  2. Maintain 24/7 coordination of operations, resolving safety and productivity issues as they arise;
  3. Maintain lead-time of inbound and outbound goods through a DHL control tower that monitors operations, with goods being correctly shelved within 30 minutes of receipt and ready for shipment within 95 minutes;
  4. Minimize operational risk and improve employee safety via a storage container management solution;
  5. Monitor controlled and restricted areas with management alerts;
  6. Reduce collision risk of Material Handling Equipment (MHE) with proximity sensors.

In May 2019, DHL also announced the rollout of Google’s second-generation Glass Enterprise Edition for its DHL Supply Chain and Express mail division staff and a client, Ricoh. The smart glasses will utilize Ubimax’s vision picking AR software, xPick, allowing for hands-free picking via automatic bar code scanning. Concurrently, DHL Express debuted an Autonomous Aerial Vehicle (AAV) last-mile drone delivery service in China, the result of the partnership with Chinese drone company EHang.

Logistics Companies Can Get Involved

IMPACT


DHL’s Industry 4.0 efforts at this point demonstrate two things. The first is that Industry 4.0 momentum is beginning to gain in emerging countries, and the second is that companies themselves can become Industry 4.0 providers. In our 2019 Digital Factory Data (MD-IICT-104) Market Data, ABI Research forecast the Compound Annual Growth Rate (CAGR) of digital factory connections in China to outpace the United States between 2019 and 2030, at 37% and 31% respectively. However, within this time period, the United States is forecast to maintain a higher number of installed connections compared to China. This disparity indicates that Industry 4.0 adoption will not vary materially in the future between key Western and Eastern companies. It affirms the global nature of Industry 4.0 and the need to digitally transform regardless of industry or geography. Even major low-cost emerging economies are not being left out; ABI Research forecast the top four economies in terms of CAGR of digital factory connections between 2019 and 2030 to be China, Japan, Brazil, and India.

Industries do not have to rely only on Original Equipment Manufacturers (OEMs) or non-OEM IoT platform players to implement Industry 4.0 solutions; there is potential to generate new revenues by providing such services to other companies. There is an upside to this model: Industry 4.0 implementations can first be tested by the providing company and, after demonstrating a compelling Return on Investment (ROI), make it more palatable for other companies to purchase the solution. This could be profitable in the short term for early adopters of Industry 4.0, as it would allow them to set the benchmarks and standards and sell solutions to followers. This may not be a cash cow model, as it requires the initial company to bear the cost of testing and investments while competing in a crowded market against system integrators, Mobile Service Providers (MSPs), robotic OEMs, industry OEMs, etc. However, the introduction of companies as providers brings us closer to the concept of Industry 4.0, which, in its ideal state, connects to not just one warehouse, but across to partner warehouses and the entire supply chain. Moving forward, this will bring about new questions to be answered, such as which company has access to which information on the cloud, if all parts of the supply chain were to be integrated.

Establishing Connectivity as a Foundation

RECOMMENDATIONS


ABI Research recommends that logistics companies consider moving forward with a strong connectivity strategy to enable Industry 4.0 capabilities. All three examples above demonstrate that connectivity is the crucial component. The entire warehouse stack needs to be connected, starting at the lowest physical layer. The Programmable Logic Controller (PLC) must connect to a Warehouse Management System (WMS) or Warehouse Control System (WCS) up until the highest layer of the Enterprise stack—including Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM)—and Cloud-Analytics stack. Information from warehouse supervisors and company executives must then be communicated in real time to resources on the warehouse floor.

Moving from a wired warehouse to a wirelessly connected one requires infrastructure change, costs, and downtime. Rather than transforming everything at once, logistics companies should isolate and prioritize use cases based on financial ability and work from there. A cellular network is recommended, as it allows for scaling and dedicated bandwidths, compared to other wireless Local Area Network (LAN) technology that has limitations to the number of access point connections and is an open signal, which are susceptible to jamming. Using the Industrial, Scientific, and Medical (ISM) band may not be suitable as it can be crowded. A cellular network can ensure that Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs) do not have latency drops during handovers and can also communicate beyond the factory if a campus network that uses a dual public and non-public slice is deployed. This would allow the factory to communicate with commercial transport vehicles on the road.

Moving to wireless connectivity can also help save cost and improve productivity. According to Nokia, one cable deployment can cost between US$700-900 for a single machine. Of course, while this differs according to machine requirements, type, and quantity, it is still a much more costly alternative to wireless, and much less scalable. To reduce downtime, wireless solutions that can be retrofitted should be explored. Solutions include Bosch’s Connected Industrial Sensor Solution (CISS), a small multi-sensor device designed for condition-based monitoring. Wireless connectivity can also improve productivity: 50% of warehouse hours are spent picking, but with vision picking, companies stand to gain an improvement of 15% in productivity and spend 50% less time on training and onboarding. It also provides the ability to monitor new devices, as wired technology cannot reachmany areas within the warehouse, in environments that are dangerous or include moving or rotating objects and remote areas that are far away from nodes. New weight and dimension technologies that are being rolled out also require wireless connectivity—DHL has implemented scales on forklifts which can measure the weight and dimension of parcels and send the data wirelessly to the scale ticket printer. What was once a manual process can now be done wirelessly, saving approximately 15-20 seconds per parcel, equaling 111 hours per week of time savings for shipments.

 

Services

Companies Mentioned