Interview: Markus Schmidt of Swisslog Logistics Automation – Americas
In our continuing series of discussions with top supply-chain company executives, Markus Schmidt discusses automation’s role in the wake of the Covid-19 pandemic.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Markus Schmidt is a Swisslog veteran and has been president of the Americas region since 2005, which includes Swisslog operations in North America and Latin America. During his tenure, the organization has grown to more than 400 people with revenues in excess of $250 million. He is also a member of the board of the Switzerland-based automation and material handling company as well as a member of the top management circle of Swisslog’s parent company, Kuka. Prior to his arrival in the U.S., Schmidt was managing director of Swisslog in the U.K.
As president of the Americas region, Schmidt implemented Swisslog’s market focus strategy in establishing consumer-goods and e-commerce/retail business units in these markets. He also spearheaded the acquisition of systems integrator Forte in 2015 and pallet-shuttle system manufacturer Power Automation Systems (PAS) in 2016.
Schmidt, who earned his degree in production manufacturing at the University of Cologne in Germany, has also been actively involved with MHI, serving as a member of its Roundtable Advisory Committee for eight years. He recently spoke with DC Velocity}Editorial Director David Maloney.
Q: How do you view the current state of the material handling market?
A: Just a few weeks ago, I would have said that the market for material handling equipment and software was thriving and highly competitive. We are certainly seeing the increased adoption of goods-to-person automation systems for cube storage like AutoStore, mobile robotics solutions like CarryPick, and high-speed case-shuttle solutions like Cyclone that were considered risky to adopt six to 10 years ago but are now seen as proven, reliable technologies and essentially mainstream.
The trend toward the rapid adoption of flexible, robotic, and data-driven solutions is accelerating. We also see this clearly in the entry of venture capital into the market to fund numerous startups and invest in existing companies.
There is a discernible movement away from the more rigid bolted-down systems that are based on miles of conveyor and sortation equipment. Although those kinds of systems still have their place in the market, they really represent an era of mechanization more than they do automation.
Particularly with the recent explosion in e-commerce, companies are looking for solutions that afford them greater flexibility, take up less space, and have the ability to adapt to rapidly changing requirements in the market. They want solutions with more embedded intelligence that can optimize based on the data that is being continuously collected by sensors and software.
While I still believe in these megatrends, this was also before the novel coronavirus that caused the Covid-19 pandemic had made its way to the USA. In just a few short weeks, things have rapidly changed. Suddenly, the supply chain is at the center of every conversation, and now the entire world is waiting to see how our economy recovers. Consumers are relying more than ever on e-commerce and e-grocery, resulting in increased adoption and shopping preferences that may never return to pre-pandemic levels.
While some industries may be stunted in the short term by this pandemic, one thing is certain: All companies will be changed by this experience. After we make our way through this difficult time, I expect corporate behaviors to change, and Swisslog is ready and looking forward to continuing to innovate and automate their supply chains.
Most importantly, I am proud of our Swisslog team that has been “essential” for our medical and consumer-goods customers working to install goods-to-person systems that are set to go-live in the next months, as well as our systems operations teams working onsite running our customers’ warehouses and our support teams for keeping things running smoothly.
Q: During your time as president of the Americas for Swisslog, the company’s presence here has grown tremendously. What insight can you share from that growth and expansion?
A: When Swisslog first entered the U.S. market, we were known as something of a boutique for our pallet-handling technologies like our Vectura pallet-stacker cranes for large retail customers. Pallet-stacker cranes and pallet-shuttle systems are still core to our DNA, and we continue to build on our very successful base of operations in the U.S. But the real game-changer for us was our entry into the e-commerce space with goods-to-person solutions like AutoStore, CarryPick, and Cyclone. We are the world’s largest integrator of AutoStore, but we also now offer an array of other types of solutions. Our CarryPick mobile robotic solution is gaining in popularity as is our Cyclone case-shuttle system.
We’re also now actively integrating robotic single-item picking with our goods-to-person systems to help companies solve their labor challenges. Our SynQ warehouse software is a comprehensive solution that orchestrates equipment, processes, and people—really the brains behind every solution we implement. These are the factors that have really driven our growth in recent years.
Also, we maintain a very customer-centric organization with a robust customer support operation. In recent years, we’ve focused on developing training programs that are critical to supporting our growth and expansion. To state the obvious, Swisslog only exists because of our customers. And with each expansion, we have added passionate and dedicated employees.
You could say that our customer-centricity is what makes us stand apart, but we’ve also worked hard to demonstrate that we are taking care of our greatest asset, our people. Successful talent recruitment, training, individual support, and leadership development embedded in a dynamic culture of innovation with mutual respect—that’s what has really enabled our growth in recent years.
Q: What are the advantages of working with a company like Swisslog that offers a wide range of warehouse solutions?
A: As a global company, we can bring our expertise from different regions of the world to our customers here in the U.S. We work in a very collaborative environment and see ourselves as one Swisslog, no matter whether we’re here or in Europe or the Asia Pacific. We share key learnings from the work we’re doing all over the world to automate distribution operations. Although we are not all things to all customers, we do offer a wide range of technologies that can be tailored to the specific requirements of each customer in each region.
We have organized our company around specific industry segments, so our people have developed deep expertise in those industries. The needs of a refrigerated warehouse handling pallets are quite different from an e-commerce operation, so we bring the correct resources to bear on every opportunity. While we are global and provide such benefits, we “act local” and have a sizable organization in the Americas to be close to our customers, not only for support, but also for software and controls deployments and all related project services.
Q: What do you feel the next few years will hold for automation applications within distribution centers?
A: In the coming years, we expect to see the increased adoption of flexible and scalable solutions like our CarryPick mobile robotic storage system, because the system can easily and quickly scale up or down as needed without disrupting operations. At the same time, our customers increasingly see the hardware or equipment as something of a commodity, so what will really differentiate us is our expertise and our software. The more intelligence that is embedded in a system, the more easily it can optimize itself to changing demand without intervention.
Whether we call it “the Industrial Internet of Things” or “Industry 4.0,” we are definitely headed toward a future where the software and algorithms behind the system are what is most important. Needless to say, e-commerce automation will continue to grow and, in many cases, will move away from large distribution facilities toward smaller, more agile fulfillment centers that are closer to the customer.
Q: You have been involved with MHI and other groups for a number of years. What do you see as the value of working within industry associations?
A: I was elected to be on MHI’s Roundtable Advisory Committee for two periods of four years each from 2010 to 2018. While the association is not playing an active role with respect to the supplier/customer relationships, it often provides platforms for those parties to find each other, like the huge industry trade shows that MHI runs. Also, it should not be forgotten that best-practice standards and regulations are driven by associations, and that these groups also provide general education opportunities for employees who want to enter our industry.
Robots are revolutionizing factories, warehouses, and distribution centers (DCs) around the world, thanks largely to heavy investments in the technology between 2019 and 2021. And although investment has slowed since then, the long-term outlook calls for steady growth over the next four years. According to data from research and consulting firm Interact Analysis, revenues from shipments of industrial robots are forecast to grow nearly 4% per year, on average, between 2024 and 2028 (see Exhibit 1).
EXHIBIT 1: Market forecast for industrial robots - revenuesInteract Analysis
Material handling is among the top applications for all those robots, accounting for one-third of overall robot market revenues in 2023, according to the research. That puts warehouses and DCs on the cutting edge of robotic innovation, with projects that are helping companies reduce costs, optimize labor, and improve productivity throughout their facilities. Here’s a look at two recent projects that demonstrate the kinds of gains companies have achieved by investing in robotic equipment.
FASTER, MORE ACCURATE CYCLE COUNTS
When leaders at MSI Surfaces wanted to get a better handle on their vast inventory of flooring, countertops, tile, and hardscape materials, they turned to warehouse inventory drone provider Corvus Robotics. The seven-year-old company offers a warehouse drone system, called Corvus One, that can be installed and deployed quickly—in what MSI leaders describe as a “plug and play” process. Corvus Robotics’ drones are fully autonomous—they require no external infrastructure, such as beacons or stickers for positioning and navigation, and no human operators. Essentially, all you need is the drone and a landing pad, and you’re in business.
The drones use computer vision and generative AI (artificial intelligence) to “understand” their environment, flying autonomously in both very narrow aisles—passageways as narrow as 50 inches—and in very wide aisles. The Corvus One system relies on obstacle detection to operate safely in warehouses and uses barcode scanning technology to count inventory; the advanced system can read any barcode symbol in any orientation placed anywhere on the front of a carton or pallet.
The system was the perfect answer to the inventory challenges MSI was facing. Its annual physical inventory counts required two to four dedicated warehouse associates, who would manually scan inventory to determine the amount of stock on hand. The process was both time-consuming and error-prone, and often led to inaccuracies. And it created a chain reaction of issues and problems. Fulfillment speed is one example: Lost or misplaced inventory would delay customer deliveries, resulting in dissatisfaction, returns, and unmet expectations. Productivity was also an issue: Workers were often pulled from fulfillment tasks to locate material, slowing overall operations.
MSI Surfaces began using the Corvus One system in 2021, deploying a small number of drones for daily inventory counts at its 300,000-square-foot distribution center (DC) in Orange, California. It quickly scaled up, adding more drones in Orange and expanding the system to three other DCs: in Houston; Savannah, Georgia; and Edison, New Jersey. The company plans to add more drones to the existing sites and expand the system to some of its smaller DCs as well, according to Corvus Robotics spokesperson Andrew Burer.
Those expansion plans are based on solid results: MSI’s inventory accuracy was about 80% prior to the drone implementation, but it quickly jumped to the high 90s—ultimately reaching 99%—after the company initiated the daily drone counts, according to Burer.
“We actually had an incident early on where one of the forklift drivers ran into the landing pad, rendering it inoperable for about a week while the Corvus team fixed it,” Burer recalls. “When we restarted the system, we noticed MSI’s inventory accuracy had dropped down to the 80s. But after flights resumed, accuracy quickly improved back to near perfect.” He adds that such collisions are rare as Corvus mounts landing pads high off the floor to avoid impacts but that accidents can still happen.
Overall, the system has helped speed warehouse operations in two key ways: First, the accuracy improvement means that associates no longer waste time searching for missing material in the warehouse. And second, the associates who used to conduct the physical inventory counts have been reallocated to picking and replenishment—creating a more efficient, and optimized, workforce.
A SAFER, MORE EFFICIENT WAREHOUSE
Robot maker Boston Dynamics is well-known for its Stretch and Spot industrial robots, both of which are at work in warehouses and DCs around the world. Earlier this year, Stretch made its debut in Europe, teaming up with Spot at a fulfillment center run by German retail company Otto Group. The deployment marks the first time Stretch and Spot are being used together—in a partnership designed to improve Otto Group’s warehousing operations by increasing efficiency and making warehouse work safer and more attractive to workers.
The partnership is part of a two-year project in which Boston Dynamics will deploy dozens of its warehouse robots in Otto Group’s European DCs. The first location is a fulfillment site operated by Hermes, the company’s parcel delivery subsidiary, in Haldensleben, Germany—a facility that handles as many as 40,000 cartons of goods on peak days.
At the site, Stretch—which is a mobile case-handling robot—autonomously unloads ocean containers and trailers, using its advanced perception system to pick and place boxes onto a telescoping conveyor inside the container or trailer. Spot—a quadruped robot—helps with predictive maintenance by collecting thermal data and performing acoustic and visual detection tasks throughout the facility to reduce unplanned downtime and energy costs. One of Spot’s jobs is to detect air leaks in the facility’s warehouse automation systems; future duties may include conveyor vibration detection, according to leaders at Otto Group.
Both Stretch and Spot will help the Haldensleben facility run more efficiently, especially during fall peak season when volume increases and work intensifies. The addition of Stretch addresses safety and comfort issues as well: Trailer unloading—a process that entails repeatedly lifting and moving heavy boxes inside a trailer, which can be dark, dirty, cold, and/or hot, depending on the weather—tends to be unappealing to workers. Along with reducing the amount of labor required, automating these tasks will have the added benefit for European facilities of helping them comply with EU (European Union) regulations limiting the amount of time workers can spend in those conditions.
Essentially, the robots are making life easier on the warehouse floor and for the company at large.
“Stretch is going to have a ton of benefits for customers here in the EU,” Andrew Brueckner, of Boston Dynamics, said in a recent case study on the project.
The trucking industry faces a range of challenges these days, particularly when it comes to load planning—a resource-intensive task that often results in suboptimal decisions, unnecessary empty miles, late deliveries, and inefficient asset utilization. What’s more, delays in decision-making due to a lack of real-time insights can hinder operational efficiency, making cost management a constant struggle.
Truckload carrier Paper Transport Inc. (PTI) experienced this firsthand when the company sought to expand its over the-road (OTR), intermodal, and brokerage offerings to include dedicated fleet services for high-volume shippers—adding a layer of complexity to the business. The additional personnel required for such a move would be extremely costly, leading PTI to investigate technology solutions that could help close the gap.
Enter Freight Science and its intelligent decision-recommendation and automation platform.
PTI implemented Freight Science’s artificial intelligence (AI)-driven load planning optimization solution earlier this year, giving the carrier a high-tech advantage as it launched the new service.
“As PTI tried to diversify … we found that we needed a technological solution that would allow us to process [information] faster,” explains Jared Stedl, chief commercial officer for PTI, emphasizing the high volume of outbound shipments and unique freight characteristics of its targeted dedicated-fleet customers.
The Freight Science platform allowed PTI to apply its signature high-quality service to those needs, all while handling the daily challenges of managing drivers and navigating route disruptions.
STREAMLINING PROCESSES
Dedicated fleets face challenges that evolve from day to day and minute to minute, including truck breakdowns, drivers calling in sick, and rescheduled appointment times. PTI needed a tool that allowed for a real-time view of the fleet, ultimately enabling its team to adjust truck and driver allocation to meet those challenges.
The Freight Science solution filled the bill. The platform uses advanced analytics and algorithms to give carriers better visibility into operations while automating the decision-making process. By combining streaming data, a carrier’s transportation management system (TMS), machine learning, and decision science, the solution allows carriers to deploy their fleets more efficiently while accurately forecasting future needs, according to Freight Science.
In PTI’s case, Freight Science’s software integrates with the carrier’s TMS, real-time electronic logging device (ELD) data, and other external data, feeding an AI model that generates an optimized load plan for the planner.
“We’re an integrated data analytics company for trucking companies,” explains Matt Foster, Freight Science’s president and CEO. “We’re talking about AI.”
The benefits of the real-time data are difficult to overstate.
“We’ve been able to execute in the toughest of situations because we’ve got real, live data on how long each event is actually going to take and a system to aid and even automate the decision-making process,” says Chad Borley, PTI’s operations manager. “From what traffic patterns we are battling in the morning and evening with rush hour and things like that, to the impact of additional miles to a route, or even location-specific dwell times, it’s been a huge differentiator for us.”
REALIZING RESULTS
A case in point: the collapse of Baltimore’s Francis Scott Key Bridge in March. PTI was scheduled to go live with a new dedicated account in the area just days after the collapse, which would mean rerouting and the potential for longer transit times. Instead of recalculating based on assumptions or latent data, PTI was able to reroute freight based on real-time information and analytics to give the customer timely updates.
“With the bridge going out, that changed our ability to make as many turns a day as the customer would expect,” Stedl explains. “But one of the things Freight Science could do [was to] quickly [assess] how much of an impact that traffic would have [and] what the turns [would] be based on what’s happening on the ground.
“So we were able to go back to the customer and readjust expectations in a real way that made sense, using data. Now expectations can be reset¾we’re not asking for forgiveness when there’s no reason for it.”
The system’s advanced algorithms make load planning more cost-effective and scalable as well. The platform allows PTI to monitor trucks, trailers, and driver hours in real time, recommending additional loads with remaining driver hours that would otherwise be wasted.
And they’re doing it all with much less. Stedl says tasks that used to require five people and hours of work can now be accomplished by one person in mere minutes, improving productivity and profitability while reducing labor and operational costs.
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.