How to Avoid the Wrong Automation Investment

This shows the whole industry if even Amazon, Okay, they have a very big range of products, they still struggle with robot picking. So this is a good signal for the industry. And there we see where we are at the moment well. And I think that's also an interesting statement back to our previous point about finding the solution that is the right fit for the use case we're looking at in that moment, because while Amazon may not be able to get that technology to work given their huge skew profiles, you know, maybe another company that doesn't have that level of complexity could find very good use case out of this particular technology.

Welcome to Speaking of Supply Chain, where mebock experts from around the world unpack the real stories, strategies, insights and innovations shaping the future of supply chain. I'm your host, Ellen Wood. As we approach trade show season, the industry is once again gearing up for bold announcements, innovation awards, and big promises about the future of inter logistics. But here's the question I think matters most what actually sticks.

Every year we see impressive demonstrations, ambitious robotics concepts, AI driven optimization claims, and award winning solutions, but a year later, how many of those technologies have truly established themselves in the market. So today, instead of talking about hype, we want to talk about traction. What established itself after the last Logimat, Is the market reaching saturation, are we heading toward consolidation? And how should decision makers prepare to extract real value from the show this year.

Joining me to dive into some of these answers today is my colleague from Berlin, Sasha. Welcome, hi Ellen, Yeah, good to talk to you. Great to have you on the show today. Yeah, short introduction from my side, So, Yeah, my name is Sasha.

I'm based in Berlin. I'm working for me Bach for about two years now and I'm doing concept designs, detailed designs, and I do a lot of research about new technology. So I think that's the perfect podcast for me to talk about new technologies, what is established in the market, and maybe what's coming next week. Can talk about what we expect in the coming years.

Absolutely what's going to happen this year and incoming years at Logimat. So looking back at the last one, when we separate show floor buzz and excitement from real commercial traction, what truly established itself in the market, what solutions stuck. So I think we should not only look at the last logimat because one year to establish a new technology or a new product is quite a short time. So I would like to talk about maybe the last three to five years, what was announced and launched Loggimut and what really established from the market.

And there are award winning categories or award categories from the Loggimut. There is a jury they announce every year in three categories the award winning solutions. And the first category is about order picking, conveying, lifting and storage technology. And I think this is maybe the most focused on category because it's the it really meets the heart of a new warehouse.

So it's the pace setter technology in a warehouse. It's about storing, storage and retrieval system and picking systems. And when we look there the last five years especially, so it's very obvious that it's always about amos and AGVs. So these kinds of technology is driving the market the industry because these kinds of technology is providing flexibility and scalability compared to traditional technologies from the past ten years.

And last year we had the Club Aerobot lounge at the Logimut and this and this solution won the award, and I think this was the right choice of the jury. Of course, the Club Aerobot belongs to the wreck climbing robots, so this is the basic principle behind these kinds of technology, and that's the first technology that is four times deep in this category. This is very innovative. So when I stood at the booth of Club last year, I was really impressed and excited when I saw this robot and with a small satellite that is driving through the wrecking and it's doing the retrieving of the bins and storing.

So we really have now new opportunities with the rec climbing robot four time steep. What also was launched last year is from Have Robotics another red climbing system, the High Big Climbs. And I think the main impact on the market and on the industry by the award winning air robots from Club and also by the he Robotics side Big Climb system is that we have now a real competition, competition in this category of red climbing robots. Before that we only had ex attack on the market.

This was the market leader and now we have competition on the market, and I think this is the biggest benefit of the industry we can have. So I expect that we will have a price decrease or discount in this category. So yeah, we can. We have very happy to have now a competition in this category.

When we talk about the variety of solutions on the market. I can remember when I was in China. It was about one year ago and I was there for just technology scouting to see what is happening in China, what kind of ignoligy frees do they have there, and what is there the customer expectations and so on. And I also had a dinner with Professor de'andrel Fang and he's a representative for the Varnhofer Institute, but he lives in China and he knows the market very well, and so we had a dinner and he was talking about the market, and he was predicting for the Chinese market that there will be a consolidation on the market because there are too many suppliers with similar technologies and not every technology and every supplier can survive in this market.

And I have the feeling that this consolidation has already started also in Europe. For the European market. When we look, for example, at the Cube systems, we have these outer store, we have Okado grit store, in teleystore and so on. But products like the atabiotics system or the power Cue they disappeared, they are discontinued.

Yeah, because the market is full of other suppliers. So there's a market seration. And when we now look at the red climbing robots with this new technologies from Club and from hier Robotics, I think even with together with Exo Tech, the three of them is enough for the market. And every new supplier maybe this year he can enter the market.

But if another company will want to enter the market in two or three years, it can be really hard for them to compete against these established companies. But I think we also should mention when it comes to what establishes on the market, we should look at the bright big Auto pickup, who was the award winner the year before. So and the very nice thing about this technology is that is the first technology with a robots to goods concept and not a goods to robots or goods to person system.

So and this is what I expect. This year or the coming years at the Loggimut, that we will see more technologies of this kind, that we have robots that arrive through the wreckings and restoring and it's doing the storted retrieval process and in between the picking. So yeah, I think this will be what we will see, maybe also already this year, but definitely in the coming years. And for example, I talked to another company, a big company that is they have already an AMR, a solution on the market, and they are working on a solution like this like p's picking Robots AMR, and they wanted to launch it at the Logimut this year, but they weren't sure at the end of last year.

So they will definitely launch it in twenty twenty six. Yeah, I think this is what we could expect this year. So it will be definitely again about amrs and AGVs, and I hope to see more about peace picking robots and more developments in this direction. I hear a lot of excitement about some of these technologies, and especially that they're being offered by more than one vendor in order to you know, maybe drive some of that cost down or one other question I would have, as you know, where are each of these culture clip Where are each of these more commercially mature.

Are they still only in selective use case solutions or are they universally applicable in that warehouse, you know environment. That's a very good question, of course. So every technology has its specific use case. So we do not have technology that can be applied to every ware else concept.

So, and this is the big challenge we are facing today when we do warehouse concepts and warehouse designing, because we have quite a bunch of technologies that are really different. They have pros and cons. And for example, the wreck climbing robots we were already talking about, they have there the robot has access to almost every toad in the system, and this is more the benefit of this principle applied behind the technology Compared to this, maybe the cube system for examples, where we have also a lot of a lot of suppliers on the market.

They are the benefit of these kind of technology is that they have a very high storage density. So it really depends on your use case if you're more focused on high storage density, if you are limited in space, for example, a cube system can be the best choice for your wear. If it's about the order structure, it's probably more a rec climbing robot system, or if it's about high throughput and short put short lead times. If it's about high throughputs and short lead times in the warehouse, it's maybe more the shuttle.

It really depends on your specific use case. So are we now past the proof of concept for these or are we still looking and trying and testing to see where these fit. Best technologies like tube systems and red climbing robots or robotic shuttles or mobile shelves. Some of them we have already about ten to fifteen years on the market.

For example, out of store they the first outer store was to go Life was about the year around the year two thousand. So they are major technologies of course, but as you said, we have to be a little bit cautious when it comes to the choice of the supplier. When we see we see a lot of new suppliers on the market, and it will really have to question if this supplier will be on the market in ten years or if the technology they provide will be discontinued maybe in the next coming years, because it's not a very economic to bring this product on the market.

Market For example, we just have a project for a company and they and this company invested into an Avett system from SZ Schaeffer, and this technology was discontinued after I don't know twelve fourteen years, and we are now planning to replace this system. And this is really what we have to consider now when we build a warehouse and we want to select the supplier, how mature is the technology, but also the company behind this technology. So that sounds a lot more like a planned obsolescence in when we're putting these things into place knowing that there's going to be so much shift in the market going forward, whether it's companies that come and go or just drop product lines in favor of newer and more affordable technology.

Is that something that customers are or that is going to make customers, you know that come to see these types of technology really pause and reconsider what it is that they're trying to do. Because when we're talking about these solutions, these are not small integrations. These are not small changes to their supply chain or their facilities. These are major, major interruptions and major investments.

So if we're looking at perhaps a ten to fifteen year obsolescence on equipment. Does that cause that consumer to be a little more hesitant to even consider doing anything that automated or anything that I should say that untested in the market. We as a consultant, we were asked, or we are asked at the end by our customers, which technology or which supplier we recommend. And this can be a really hard decision or recommendation for us, just because as we already talked about some we really have to be sure that the technology will be available also in ten to fifteen years.

That technology from sz Schiffer I was talking about, it's not the only one that was discontinued. When we look, for example, at Cube Systems. At the moment, we have Ocado as a high end product, we have out Store as a low cost mass product, or we have Intelli Storre and grid Store. There is something in between.

But there was also in the cube system field products like from Atabotics or the power Cube system. So they wanted to be a little bit fancy and they change the core idea of this technology. They added free spaces into a cube system, or they just put it up, or they lifted up, or the power Cube system just lifted up the toad stack from the bottom. So and this is a little bit contradictive to the major idea of this principle.

So when we make a recommendation for technology or I do it at least I really focus on to have a very strict concept behind the technology and not to do a recommendation for it to fancy technology. I think this is very important at the moment at the market. The flexibility there is really going to drive those decisions. Knowing that there are some different options out there that may be a little bit too niche almost that we need a solution that has a little bit more, a little bit more adaptability and can weather those technical logical improvements over the years, that can be scaled up or down as needed as business needs change.

It sounds to me like those are the are the companies and the solutions that are going to last. Yes, And of course we can't have a conversation in twenty twenty six without touching on AI. So where do you see artificial intelligence creating any practical value within these automated solutions right now? AI?

So AI of course belongs to the IT and there's also a category of awarding of course about software communications IT and this is where AI is sneaked on or labeled on. And first of all, many products claim to be AI powered or based on AI, and we really have to be cautious what is really behind this. So AI is not a legal protected terms, so everyone can use AI for their advertisement. It's getting more and more important to think about systems instead of machines.

And this is the same point when we talk about orchestration. It's really about the synchronizing of different systems. So yeah, we go away from this very isolated few on single systems on specialized machines. We can run them, they are established, they do their job.

It's more about the orchestration of the full warehouse and the next step after we have orchestrated the inside the warehouse, the next step will read just to expand the scope to the upstream and downstream processes, just for example like route planning, so this will be one day integrated into one system and this is something AI will support of course. For example, this was the award winning in the in this category. It was the p S I w M S who won the award and that is based on AI.

Where also AI helps us in our industry is of course all about perception. We have robots a mrs that drive autonomous through the warehouses and they need a kind of perception of the surrounding. There can AI really do a lot. And of course it's about image recognition, and image recognition is highly related to autonomous or robot picking, and robot picking is still of the one of the biggest challenges in the market.

In the industry, we have a lot of solutions for unloading and loading, for as R as for storing and retrieval, for for transports or for transport in the warehouse, but the picking process, there are a lot of solutions. But when it comes to a high variety in your SQUS, in your your items, most of the systems still effacing their limits. Source still come to the limits. For example, even Amazon, they had a big initiative with a so called blue Jay.

It was an autonomous picking piece picking robot and they stopped this initiative in January because they so insiders say that the robot was or so the blue Jay robot was introduced to Amazon and they expected about seventy five percent coverage of their SKUs and they discontinued this or they stopped this initiative because like insiders say that they didn't reach the seventy five percent. And on top the implementation was to complex for these robots. So and this shows the whole industry if even Amazon, Okay, they have a very big range of products, but they with robot picking.

So this is a good signal for the industry. And there we see where we are at the moment. So here also can AI support other products because AI brings intelligence into the hardware. Well, and I think that's also an interesting statement, you know, back to our previous point about you know, finding the solution that is the right fit for the use case we're looking at in that moment, because while Amazon may not be able to get that technology to work given their huge you know, Skew profiles, you know, maybe another company that doesn't have that level of complexity could find very good use case out of this particular technology.

Sorry, just I know we were on the AI subject, but I think that really you know, brings that point further home that you really have to do look at exactly what it is this individual company, this individual facility is attempting to achieve in order to find the solution that's best. Because when you go to affair like Logimat. It is huge and there are so many, so many suppliers and vendors with similar and slightly differing technologies and finding that right fit is difficult, absolutely right.

So when you go to the logomat, you really have to think about what is your goal from the logomat, What do you expect from the logomo when you go there, And it can be really overwhelming or it is overwhelming when you go to logomo there are hundreds of new products, and I think it's very important to be prepared and not to go there and just go from booth to booth and look at what products are they're presented. I would really recommend and this is what I do. What is really the need?

So what is your use case at the moment? Think about what is your three to five year's plan or what is your plan for the next three to five years, and what is your SKU profile, what is is it a green field or brown field? And really focus on only technologies like this and don't be catched by these fancy technologies. So I really doubt that if the technology is too complex, it maybe really look cool.

When you go to the logomot, it looks cool and you are excited, but these kinds of technologies often fail. So again I think it's really important to focus on robust products, a really robust technology behind that behind it, and mostly it's very simple. In the end, we have the category about auto picking, conveying, lifting and storage technology. This is one category for the awards, and then we have the software Communication I T and the last category is about identification, packaging, loading and load securing.

So this is also very interesting. The last year's the focus was not really on this on this area, on this field. But so the first thing is the last couple of years we saw especially r of I D Technologies technologies winning the award based on our of I D r F i D. They generate data and these generated data will be then processed by for example AI based IT systems and the data processed by these r of ID chips will be processed by AI powered the systems.

But what's also very interesting in this category is the topic of packaging. Especially in Europe, the companies will really have to face the packaging or especially in Europe, the packaging the packaging technology will be more focused on in the coming years because we have the PPWR Packaging and packaging waste regulation in Europe that is coming yes and from twenty thirty on, and there are some obligations and this will impact the whole industry, especially, for example, the e commerce industry, and companies have to reduce the shipped air in their shipping cartons, for example, they have to reduce the packaging material the waste and this is something where automation really can help.

So we had already twenty twenty four packing machine winning the award, but I'm pretty sure that in the coming years there will be even new innovations in this direction and hopefully win the award and bring the industry forward to fulfill the requirements by this regulation. And I just recently have been to the e Commerce Expo in Berlin, and the expo is more focused on web shops and ERP systems, but I also even saw there because it's about e commerce and it's about this packaging regulation, that there are companies providing software for manual packing packaging processes.

So the software can, for example, can support the operator who's doing the packing in selecting the right curtain size, and the system can also show him how to locate, how to position all the items in the cartoon to be space efficient will get more important because not every company can afford or for not every company it's economic to invest into an automated pecking machine with two hundred thousands up to more than one million investment. So also these solutions will be very important in the near future because of the regulation.

And I love that idea that the being at a fair like Logimat is essentially technology tourism. You know, people are going there to see what's new, what's innovative, what's exciting, but others are going there to look for the practical solutions, the things that they need for their business. It's not just a sight seeing trip. It is a lot of fun.

There is a lot to see, but to your point, you know, they get distracted by the bells and whizzles and moving parts and the innovation. It's very inspiring, but that doesn't mean that it's practical for use for every single case. So I love your advice that people attending these fairs that do have a solution in mind, or that have a need that they're trying to fill, attend with a little bit more intention. We already talked about AI, and talking about AI always reminds me about human EID robots, So I'm pretty sure we will not see the humanoid robots on this logomat maybe as a very very pilot humanoid robot at an early, very early stage.

There are already companies using human eye robots, especially in the automotive industry. There are some companies they have pilots just like Mecedes or bing Wu in Germany, but especially in Apex, they are testing human eighte robots and experts predict that we will have humanid's robot as a mass product in three to five years, but they tell us since ten years, so it's always about three to five years. We will see when we really have human eight robots. What just came in out of my mind when I was thinking about human eight robots in the last couple of days is currently we really build these high automated warehouses where we have specialized machines for unloading, for packing, for storage and retrieval and so on.

The picking process. It's still a little bit behind. There is potential for developments, okay, but for almost the whole warehouse functional areas, we have already specialized, high performing solutions that are very efficient in these kind of warehouses. We do not really have the need for a lot of human eight robots because the goal at the moment is already to reduce the number of fts the labor requirements in the warehouses.

So for these kind of warehouses, the benefit from human robots is very limited. I think we will we would adapt or maybe even we have just take the picking process. As soon as the human eight robots is able to do a proper picking we will have I think we will have specialized picking robots even before the human eight robots can do this. So the human eighted robots, to my opinion, are very good opportunity for smaller warehouses and for green field projects when we have still maybe in five to ten years, when we then have the human eight robots and we still have pick towers, or we have warehouses where we pick from pellets.

Usually these are then smaller warehouses, then we need a human eight robot. But for these highly automated warehouses, we do not need them. So what are some other things you might advise someone in their preparation for knowing that they're going to logimat Obviously they have vendors they want to see, but they're going to be distracted by a lot of the moving parts as they walk through the halls. You know, are there any other practical steps they should take in order to leave with actual insights rather than just dreams.

Yeah, you must be prepared, so I think so if you really have, if you have a project that is running and you are looking for that it right technology, one advice would be just be prepared and even make appointments for the with the companies you're interested in, and also bring bring some some key facts of your project and then let them explain why the solution could fit or just discuss with them honestly and open what why this technology may be not fitting for this use case. Yeah, maybe you have your LUTTERP with you or or print out with the key facts of your projects of your demand at the moment and discuss this with the companies on site and or with the companies at the Logimat.

And yeah, do appointments. So they are happy to have customers with appointments there. So yeah, truly, yes, the companies that are exhibiting at Logimat are very very open to setting up appointments ahead of time in order to go through these things, including me boch so our team will be on the floor at Logimat in Hall three at our booth BO nine, to not to sell a product, but to help you interpret what you're seeing benchmarket against market maturity and translate innovation into real operational value.

Reach out ahead of the show to schedule time with our experts like Sasha or anyone else who is in the booth at Logimat this year. And as always, thank you for listening to Speaking of Supply Chain. You've been listening to Speaking of Supply Chain a meboch podcast. Keep connected with us by somescribing to the show in your favorite podcast player.

If you like what you've heard, please rate the show that helps us to keep delivering the latest in supply chain information. Thanks for listening. Until next time.