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.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.