Modernizing Supply Chains with Logistics

Transcript

• Steve Statler 00:00

  Welcome to the Mr. Beacon podcast. This week, we are going to be schooling ourselves with the help of another journalist Jack Daleo, who writes for Freightwaves and Modern Shipper. So in the world of indoor positioning RTLs auto ID Logistics is front and center. As an industry that is driving demand, and is a key part of implementing systems, there's a lot to learn about it and some pretty cool stuff going on in warehouses in the last mile. Some buzzwords that we're going to be demystifying and explaining with the help of of Jack. So hope you enjoy the podcast. The Mr. Beacon podcast is sponsored by Williard intelligence for everyday things, powered by IoT pixels. So Jack, welcome to the Mr. Beacon podcast. This is part of a theme that we've had where we maybe take a step back from hardcore Bluetooth technology and the details of RTLs and actually look at what some of these tagging technologies are used for and try and understand our, our customer. And I think one of the best ways of doing that is talking to people whose job it is to actually cover those industries. So you you work for you write for freightwaves and modern shipper, what, you know, what are the personas? Who are you writing for, tell us tell us a bit about who you have in your mind when you're writing your pieces.

  
  

  Jack Daleo 01:46

  Sure, you know, the people that freight waves typically reaches our you know, people in the trucking space supply chain operators, C suite executives. But you know, I kind of center my work on the modern shipper brand, which is more focused on the last mile, warehousing and distribution, fulfillment and things like that. So I think that my work sort of reaches a little bit more of a broad audience. We reach a lot of delivery drivers, gig workers, folks who work in warehouses or in retail spaces. So those are those are kind of the folks that we are talking to a lot. And you know they are, there's a lot of problems that are facing the space that I'd love to get into.

  
  

  Steve Statler 02:26

  Yeah, well, let's let's dive into it. You know, what are some of those problems that are being dealt with and I kind of see it on in two hearts, there's the warehouse, and then there's the shipping from the warehouse, I don't know where you want to start, but you either would be fine. From my perspective.

  
  

  Jack Daleo 02:44

  Let's go ahead and start with the in the warehouse. So I think one of the big things that we're seeing there is just this complete lack of capacity. You know, there's, there's been sort of this flurry of activity, where you've got these, these big private real estate investors buying up industrial real estate properties, like warehouses, fulfillment centers, and things like that. And the market is just becoming flooded with these companies. And so it's becoming harder and harder for for smaller brands to sort of expand their warehouse network and add new facilities. But at the same time, you know, operators are also struggling to make use of the space that they already have. Because you've got this, this rise of E commerce orders that is pushing demand through the roof. It's making throughput higher than it's ever been before. So a lot of warehouse operators are stuck with the same amount of space, but maybe one and a half times two times as much product that they have to move through. So finding creative ways to make use of that space is definitely one of the big ones.

  
  

  Steve Statler 03:50

  And who is running the warehouses? Is it like third parties who run warehousing as a service? Or how does that work?

  
  

  Jack Daleo 03:59

  I can depend on the on the actual warehouse. I believe that some facilities will have other companies come in and sort of operate things. But a lot of the times it is it's people who work within that particular company that are that are operating.

  
  

  Steve Statler 04:14

  Okay. So there's a major capacity crunch demand is going up supplies limited. How are how are these companies dealing with with those pressures?

  
  

  Jack Daleo 04:28

  Yeah, they've they've had to get real creative. You know, one of the things that we're seeing a lot is sort of the shift towards verticality in the warehouse. You know, you can't, can't always build out so sometimes you have to build up. And a lot of the space that's unused in warehouses is you know, between the shelves and the ceiling. So you're seeing a lot more people sort of rearranged their inventory to be able to hold more in the warehouse. You're also seeing in or operators try to try to speed their Inventory through the warehouse more. So that less space is required to keep that, you know, you you saw for a while this trend of just in time inventory, where they, you know, a brand will try to have their suppliers send the products around the time when the consumer actually wants it. There's been sort of a departure from that with the supply chain disruptions that we've seen, just because it's less reliable to be able to, to have a product ship on command. So we're starting to see operators come up with different ways to do speed throughput. And a lot of that is through automation and new technologies.

  
  

  Steve Statler 05:42

  And so you're building up? That sounds a little challenging this stuff gets higher to the ceiling, how do you get to it? What are the technologies that people are using to solve that problem?

  
  

  Jack Daleo 05:56

  Yeah, how do you get to it? And how do you keep track of it, those are two really important things. So the getting to it part, you do see a fair amount of operators using robots that are kind of shuttling up and down shelves vertically to pick and return objects. You also see the use of overhead scanners and things like that more often. A lot of times operators will will tag their products with with an RFID tag or something like that. And they'll have an overhead scanner that allows them to get sort of a wider picture of where their inventory is spaced. So they can keep track of things that are both on the floor and in the air as well.

  
  

  Steve Statler 06:40

  So in the past, maybe they just scan things when they were putting them away, or they entered into the warehouse. Now they just want a continuous view a real time location system.

  
  

  Jack Daleo 06:51

  Is that right? Right.

  
  

  Steve Statler 06:54

  So how does a robot get up and down a huge stack of shelves? I'm kind of thinking of something out of Avatar or spider man, you know, Dr. Oculus, or whatever his name was? How does that work?

  
  

  Jack Daleo 07:11

  Yeah, the the kind of robot I'm talking about here. It's called an ASRS, or an automated storage and retrieval system. So a lot of times that will look like robotic shuttles that will either lay between shelves and run along, kind of a grid. So they can they can move between shelves that are tightly packed together. And then you've also got the vertical dimension of that, you know, a lot of times there'll be similarly robots that kind of attached to shells, and vertically arranged up to the product.

  
  

  Steve Statler 07:45

  Yeah, I've seen these things. And they're just amazing to watch. It's like a massive vending machine. But instead of potato chips, you have like a pallet of industrial parts that's being just whisked up in the air at incredible speed. We have a customer that's in the in the grocery space. And I just, I thought I was looking at science fiction when I saw these massive crates and pallets full of produce just flying up in the air and dropping down. And it was really, really cool looking. And I guess, you know, this is, you know, it requires an operating system. And there's a lot of technology there. And they must be pretty expensive, I'm assuming.

  
  

  Jack Daleo 08:31

  Yes, this is true, which is, which is definitely one of the things that has held robots back from from being adopted. But there is sort of this emerging trend that has begun to make robots a little bit more accessible. It's called robots in service. So a robotics company think like a Zebra Technologies, Berkshire Gray, Lucas robotics, they'll they'll offer their their AMRs autonomous mobile robots. These are the kind of robots that will move around the warehouse floor, and pick and transport inventory. They will allow warehouse operators to almost sort of subscribe to the robots. They'll sign a contract for a year, two years, three years. And they'll be able to use the service for that amount of time and they can pull out when they need to. So there are becoming they're they're becoming more ways for operators to start to experiment with this technology, which is, I think important because I think it's the way that the industry is going.

  
  

  Steve Statler 09:32

  Those again, are just fascinating to see zoom around as a as a consultant. I remember visiting a car parts warehouse that had these things in and they would play music, in order to say rather than just beeping at you, if you walked in front of them, they would play music. I can't remember I think it was from a major movie like Pirates of the Caribbean or something like that. But it was the same bit of music over and over again. Yeah, after. So after, like a weekend that you're like, I can't stand hearing it ruin the movie for me, unfortunately. So how do these robots know where they're going? What's happening in terms of that part of automation?

  
  

  Jack Daleo 10:21

  The Great question, you know, for a long time, operators used to use AGVs, or automated guided vehicles. So these were robots that they would follow like a set path along the ground, oftentimes, it would take the form of an actual line, and cameras and sensors would simply sort of follow that. Now, today, the technology has become a lot more complex and a lot more intelligent. You see a lot of artificial intelligence and machine learning being used with these robotics. Machine learning in particular, I think is very interesting, because, you know, there are there are companies that they're able to sort of collect data from robots that they've already deployed. And because because of the machine learning aspects, the robots are sort of connected with this kind of hive mind. So they're able to teach new robots based on what the older robots have already learned. So each new iteration becomes more intelligent. You're seeing really, really fascinating things like that happen a lot.

  
  

  Steve Statler 11:25

  Isn't it amazing how these science fishing concepts that maybe we saw in Star Trek, The Borg or something like that, and they the ideas get recycled and actually used for something that's actually very practical. That's really cool. So what else are you seeing I, you wrote an article recently about voice interaction, and I was trying to get my head around why people would use voice in a warehouse.

  
  

  Jack Daleo 11:55

  Yeah, I think it's really not even necessarily about voice, but about being more mobile, being more hands free. So you've got, you've got things like voice technology, where a worker will have a headset on. And, you know, rather than manually recording all of the things that they picked, they can just talk into the headset. And they can also receive commands from the headset, telling them what to pick and where it is. But then you've also got things like, like handheld mobile devices, a lot of times, you'll see workers have these and they'll be connected into a WMS. So that you can view your workflow from wherever you are in the warehouse. So you've got devices that they can connect to your wrists on your finger over your head, you've even got devices that can be integrated into like a forklift. There are they're kind of mobile tablets, if you will, that can be mounted on forklifts, for workers to be able to access their workflows while they're on the move in that way, as well. So it's a lot about, you know, minimizing the amount of downtime that that these workers are experiencing.

  
  

  Steve Statler 13:02

  something vaguely sinister about it, the the machine's absorbing the human being rather than the other way around. But you used an acronym there, which we should explore WMS. What does that stand for? What does it mean?

  
  

  Jack Daleo 13:17

  I should have explained that first. It's a warehouse management system. This is basically the way that operators will keep track of their inventory as it's going through the warehouse, as well as the way a lot of the time that they that they plan out their tasks and assign tasks to different workers. It's sort of like your your base of operations, if you will.

  
  

  Steve Statler 13:38

  And who are the players in the WMS? Space? Who makes them?

  
  

  Jack Daleo 13:45

  Off the top of my head? Let's see. Manhattan is a company that that makes it really popular one. You've also got companies Tompkins is one of them that has a WMS. Yeah, there's just a bunch of them really, the space is it's pretty saturated, actually.

  
  

  Steve Statler 14:02

  Interesting. And as you look at, you know, leaders in that space, you've talked about a lot of technology, and I don't know exactly how far it is in the adoption cycle. But who are the some of the brands that you see as being you know, leaders in this space? Are there names that you see popping up when, you know, the latest Israeli WMS startup starts quoting who they're piloting with? Who's Who are the thought leaders in this space from your perspective?

  
  

  Jack Daleo 14:38

  Sure. So from a tech standpoint, I think a company like like Zebra has made a name for itself in this space. They they make AMRs autonomous mobile robots and a bunch of other different kinds of warehouse tech. That's that's been seeing more adoption recently. Burchard gray, which I believe I also mentioned earlier, is Another is another big player. You'll also see companies that haven't traditionally been in the space starting to move into it. Honeywell is a company that comes to mind for me, that's kind of the company that inspired me to write that voice article. There, they're doing a lot of really innovative things in the warehouse space. Which is, it was surprising to me at first, because in my mind, I pictured them as a, as an aerospace and defense company, but you're really seeing the warehousing space become kind of attractive to companies in all sorts of industries.

  
  

  Steve Statler 15:35

  So Jack, thanks for that, that was really helpful for me. Let's talk about getting things into the warehouse and out of the warehouse to the to the customer, can you I have to admit to being somewhat confused by all of the acronyms that are used three PL and all that sort of thing. Can you untangle some of that? And how does how does stuff get in the warehouse? And how does it leave? And what are the what are the different approaches to organizing those logistics?

  
  

  Jack Daleo 16:09

  Yeah, I mean, it's a very, very complex process with a lot of different players involved, you mentioned three PLS, that's one of them. Third party logistics provider is what that stands for. So a lot of times a company will enlisted three PL to help them move goods from one place to the other. So a lot of times the methods that a three PL will use, you've got ground based methods, via truck via van, those are very popular, as well as rail and air. But, you know, one of the things that we're seeing a lot of is sort of this emphasis on a hub and spoke model, where you'll have sort of these distribution centers spread out around the country, those are your hubs. And then from there, the spokes are sort of the individual stores or the individual customers themselves. So rather than having, you know, one kind of major facility in, say, Seattle, a company will have facilities in Seattle, and Phoenix and New York, and each of those facilities will serve its own market. So there's sort of this emphasis on positioning the inventory as close to the consumer as possible, so that you don't have to move the goods as far

  
  

  Steve Statler 17:25

  back that's really interesting. As a computer scientist, it makes me think about caching mechanisms that are used in computers. And it seems like you were talking about warehouse management systems, I think about an operating system. And it's very interesting how these ideas get transplanted. So three, Pl third party logistics, what does that really mean? And what you know, what are the alternatives? Is there a four PL, two PL,

  
  

  Jack Daleo 17:58

  no, four PL unfortunately. But the alternative would really be just for a company to kind of handle those things itself. A lot of times, that's not really an option for a company, especially a company that's young, or that's trying to grow. But for some of the more established players, for example, you've got Amazon, they're not going to use a three PL, they've got their entire nationwide fulfillment network. They've got Fulfillment by Amazon, which lets other retailers use their fulfillment network. So they're, they're almost in a way functioning as a three PL of themselves. So I think it really depends on sort of the stage that you're at in business.

  
  

  Steve Statler 18:37

  And so it seems like Amazon are the leader, the thought leader, the implementation leader in this space, they've taken something that was a nightmare for most companies and turned it into a core competence and an advantage. What are some of the cool things that you see Amazon doing in this area?

  
  

  Jack Daleo 19:00

  Yeah, Amazon, they actually, just this week, they announced a new initiative. It's called by with prime. And this essentially is allowing retailers to offer products on their e commerce websites, and be able to offer their customers prime benefits, meaning free delivery, next day delivery and free returns and things like that. So whereas Fulfillment by Amazon was kind of a way for companies to just store their inventory with Amazon, not necessarily get the benefits of prime. Now you have a way for these customers or these companies to to make themselves more attractive to customers that that use Amazon, they'll they'll be able to include a little prime widget on their websites, that tells people which which products are eligible. And so I think that's kind of a big deal. You know, Amazon is really sort of relinquishing a little bit of the control that it likes to have over its consumers. You know, they've done it too. ton of interesting things in logistics space over the years, I think really just the sheer size of their network is this astounding to me. They've got hundreds of facilities across the country. And you know, some of those are 1 million square feet, 2 million square feet. They're, they're massive. And it's just, it's really incredible. And at the same time, though, you've got these massive facilities, but you've also got the smaller stores that Amazon is beginning to, to open. You know, they're traditionally just an online retailer. But they've actually opened brick and mortar stores to kind of try to position their inventory as I was talking about before closer to their customers. So providing them a physical place that they can go to, to access items.

  
  

  Steve Statler 20:50

  And full disclosure, I should say that, really, the my day job and the sponsor of this podcast is Amazon's an investor in our company, but that hasn't influenced all of the admiring superlatives. I've used here. Okay, that's great. So, you know, COVID is trained us to stay away from the shops order online. And so last mile delivery is becoming a lot more important. What are the trends that you see in last mile? Jack?

  
  

  Jack Daleo 21:28

  Yeah, I think one thing that you're seeing a lot of is consolidation. And I don't mean in the sense of companies merging or things like that, I mean, more in the sense of consolidating orders together to reduce the number of trips that that last mile delivery driver has to make. Because you know, one of the big problems facing the last mile right now is stainability. Just the sheer volume of products that are being shipped, you've got E commerce as well, which is playing into that it's creating many, many more miles traveled over the last mile. So companies are trying to look at ways to reduce those miles, you've got things like split cart, for example. This is the idea that you can bundle orders from different retailers and have them arrive at the same time at the same place. So that that kind of eliminates the need for multiple trips, you're also seeing retailers do things like looking at the last mile as the first mile of returns. Meaning that, you know, as as these companies make deliveries, they will also go out and pick up products that are there after returns, kind of reducing the number of trips in that way as well.

  
  

  Steve Statler 22:50

  That's really cool. And because that's kind of the winning, and one of the disadvantages that would stop you placing an order online is the whole returns process and so forth. So anything else in sustainability that you see, I do worry about that as a bit of a tree hugger myself, feel a little bit guilty as I order things online? And I feel like I'm just creating more of, you know, more trips, more co2 emissions from all these vehicles more packaging? To what degree do you see that as a problem? And is anyone got any answers to that?

  
  

  Jack Daleo 23:33

  Yeah, I mean, it is, it's a big problem. The transportation industry, I'm not sure the exact number, but it's responsible for a huge portion of US emissions. So it is a big problem. And you've you've also got the problem of, you know, wasted products or products ending up in landfills, things like that. So I do think, you know, continuing with the topic of returns that retailers are trying to make it easier for customers to return items, and then also easier for them to repurpose those items and resell them, instead of having them end up in landfills. So they're doing that in a few different ways. One of them is offering to go to the customer to actually make the return rather than having them go into the store and drop off the product. So you're seeing more of an emphasis on making that process as easy as possible for the customer. You're even seeing some retailers allowing customers to leave objects curbside. So they're, they're really making that process a lot easier. And then you know once those products are back in inventory, you also see a lot of retailers kind of dedicate an entire system to returns. It's called an RMS or returns management system, similar to a WMS but specifically for products that have been sent back to the retailer. So there's there's a big push to to repurpose those items and get them resold rather than have them end up landfills, which for a long time has kind of been the case with returns. And the majority of them have ended up in landfills up until recently.

  
  

  Steve Statler 25:09

  That's a really cool thing. I wasn't aware of that. And it sort of fits into this move towards circularity, maybe people will, that maybe they'll extend the definition of returns and start selling better quality products that people can actually give back when they've finished with their money. I mean, you see a lot of systems around by like, by nothing, and so forth, where people are sharing stuff. So it seems like there's an opportunity for brands to start to participate in that, especially as they have the logistics capability that can move these things around and help people get value from what they're doing.

  
  

  Jack Daleo 25:49

  Yeah, and I'm glad that you brought up that circularity because, you know, there, it's not just, it's not just products that are being returned, it's also the packaging, you see a lot of companies started, started taking on this, this reusable packaging, where the customer can receive the item and then return the packaging back to the retailer. There are two companies that come to mind that I've seen do this lotions are they're both. One is an apparel retailer, the other sells like fragrances and Bath, bath and body items. But those companies will offer reusable packaging, they'll they'll sell to the customer, and then the customer has the option to bring that back to the store to be used to package and other products. So you're seeing things like that as well.

  
  

  Steve Statler 26:36

  Yeah, I mean, we've been experimenting with these meal ready made meal or buying the ingredients. And I love it, apart from the fact that we just get this massive packaging that you have to throw away. And you know, it's basically a reason why we're not doing using those services more. And, you know, as the company will yacht's. I mean, that's basically our primary focus now is reusable transport items. And I think it's, it's not just about being virtuous, but we supply chains really tight. And so getting hold of the materials to make disposable packaging is becoming increasingly difficult and increasingly expensive. So it just makes economic sense to recycle that. So you don't suddenly find, oh, I can't ship things because I don't have the materials if you can, that now we have technology, we can manage these pools of reusable transport items so much better. So it's actually one of the things that makes me optimistic, as I go into into work in the morning. So I hope you found that discussion with Jack useful and educational. As part of our warmup process, we talk to our guests a bit about how they got their job, what they do, and their tastes and music. So take a listen to how Jack got to where he is, and a little bit about the music that inspires. So, Jack, you seem to have a very interesting job. You're covering all these trends that are central to the way business is done. Now with logistics and warehousing and so forth. How did you get to do the job that you do? And what is the job that you do?

  
  

  Jack Daleo 28:29

  Sure, it's a great question. So I write for freight waves, which is a publication focusing on the supply chain, logistics, freight and pretty much everything in that realm. Within freight waves, I also write for modern shipper, which is sort of covering the endpoints of the supply chain. So last mile delivery, warehousing and distribution, things like that. I came here actually, right after I graduated college, about a year ago, about a month after that I was I was at freight waves, you know, coming in here, I didn't really know much at all about the supply chain industry. But it's it's been a really great experience. So far. I've learned a lot. And I think that my perspective is kind of an outsider has always helped me a little bit because I'm able to sort of pick up on the things that are that are interesting to people who aren't familiar with the industry. So yeah, it's been it's been a journey, but yeah.

  
  

  Steve Statler 29:26

  How do you How did you get your first taste of journalism? It was before you graduated, right?

  
  

  Jack Daleo 29:35

  Yeah, so I actually went to school for journalism. I went to Northwestern University, it's outside Chicago. So I studied for four years there. And it's kind of funny because, you know, most of the people who work for freight waves they're, they're coming from within the supply chain industry or from within the logistics industry. So my background is actually in writing. So that's, that's kind of how I ended up here. Excellent,

  
  

  Steve Statler 30:01

  very good. Well, as you know, we have this musical tradition on the show, asking our guests about three songs. That means something to them. But what's your first choice?

  
  

  Jack Daleo 30:13

  Very excited for the segment. First Choice, I've got Dr. My eyes by Jackson Browne. It's a bit of an older song. But you know, growing up, my parents used to play that whole album on repeat pretty much anytime I got in the car and went anywhere. So that song is really kind of ingrained into my into my memory and it's, it's always going to have a special place in my heart.

  
  

  Steve Statler 30:37

  That's awesome, and not what I was expecting from someone of your era. So well done. Surprise. Definitely extra points for surprising us. What's number two?

  
  

  Jack Daleo 30:51

  All right, second one I've got. It's called under the Milky Way by the church. Maybe not as familiar of a choice. But it's the song that plays during the favorite scene during my favorite scene of my favorite movie. It's called Donnie Darko. So that song is has always kind of just stuck with me as sort of the the audio representation of that moment.

  
  

  Steve Statler 31:15

  And what do you like about that movie? It's it's pretty unconventional, isn't it?

  
  

  Jack Daleo 31:21

  So you know it? Yeah. It's it is a very unconventional movie. I just liked that. The way the way the story is told, it's just very interesting. It's it's unconventional. It makes you think a lot and it's very whimsical. I'm just a big fan of that.

  
  

  Steve Statler 31:33

  All right. Hopefully, people will check it out. It's definitely worth a view. And number three,

  
  

  Jack Daleo 31:39

  yes, number three, I've got Wish You Were Here by Pink Floyd. i It's really just a beautiful song. That album is one of the very first albums I got on vinyl. I have a small collection that I started. And you know, it's a little bit cliche, maybe but the the two vessels swimming in a fishbowl line. It gets me every time. I just love that song.

  
  

  Steve Statler 32:06

  Fantastic. Yeah, I've been listening to a podcast called Rock on tours, which has a couple of the, the bases and a guitarist who are now playing one of the instantiations of what's left of Pink Floyd. So I found myself going back listening to to their stuff as well. It's still holds up. Very good. Well, Jack, thanks. Thanks a lot for that. I really appreciate it.

  
  

  Jack Daleo 32:31

  Yeah, absolutely. Happy to share.

  
  

  Steve Statler 32:33

  Very good. Well, Jack, I really appreciate your time. You've certainly taught me a lot. So thanks for schooling us. And I hope we get an opportunity to do this again in the future. And you can keep us up to date on what's happening in warehousing, logistics and last mile. And we've heard a lot from you. And so I hope people will continue to follow you and you have a podcast as well, right?

  
  

  Jack Daleo 33:01

  I don't I should make one though. I am looking at starting to do a new video series though for modern shipper. So keep an eye out for that.

  
  

  Steve Statler 33:10

  Okay, fantastic. Well, appreciate the preview of that. And we'll, we'll look out for it and continue reading what you write on the modern shipper and freightwaves So thanks again.

  
  

  Jack Daleo 33:24

  Yeah, absolutely. Steve. Thanks for having me

  
  

  Steve Statler 33:26

  on. All right, that wraps up another week's podcast. I hope you enjoyed the conversation with Jack and some of those ideas inspired you and helped you a bit in terms of getting your head around how these industries operate. We really appreciate your following us staying to the end. And as you're obviously a committed listener, please do rate us rank us and share what we do with your friends and colleagues. So until next time, stay safe and be happy. All the best.