DHL makes e-fulfilment more effective with AI algorithm
With the impact of COVID-19 increasing online sales, DHL recognised the challenges facing retailers around the world. As a result DHL reports that in many cases, orders have increased, but the shipment sizes are smaller. With these new and diverse product ranges, retailers require more stock keeping units, as well as the capability to meet customer demands, including: fast or same day delivery, high transparency and traceability.
In order to tackle these challenges, DHL Supply Chain - a leading contract logistics provider and subsidiary of Deutsche Post DHL Group - continues to increase its reliance on intelligent, IT-based forecasting and analysis tools. These tools allow the logistics company to optimise its warehousing and its online order processing for major online sellers.
"The COVID crisis has shown us that unforeseen volume fluctuations for individual products can put enormous stress on supply chains. Lack of clarity regarding stock levels and incorrect data on availability can lead to bottlenecks for individual products and then delays in delivering to end customers," commented Markus Voss, CIO & COO at DHL Supply Chain.
"We are working with our customers - large online stores and retail companies - on more stress-resilient, reliable algorithms and tools to better anticipate demand fluctuations, optimise the allocation of manpower and thereby accelerate the throughput of goods and order cycles."
DHL details that overall, the IDEA algorithm can significantly improve order picking processes in a DHL operated warehouse, with the associated costs being comparatively low, due to the software - developed by DHL - being compatible with most traditional warehouse management systems (WMS). The software can also be integrated with existing IT infrastructure.
Reporting on its first commercial deployments, DHL notes that the solution has reduced the distance traveled by warehouse employees by up to 50%, as well as increased productivity of individual locations by up to 30%.
Developed and designed by DHL Supply Chain, the IDEA software solution is specifically built for e-fulfilment warehouses. DHL employs a dedicated team of some developers, engineers and solutions designers to continuously develop and optimise its warehouse logistics processes for its clients.
"Our IDEA analysis tool is one of our many answers to these e-commerce challenges," added Dietmar Steins, EVP Solutions Design at DHL Supply Chain.
"With its algorithm, this 'artificial intelligence' solution helps optimise picking routes within the warehouse. Orders are also clustered logically, which helps optimise picking by our colleagues in the warehouses. The integrated, intelligent task planning can also optimise workload distribution for warehouse staff and help prioritise more time-critical shipments. Moreover, IDEA reduces error rates as well as the time required for employee training,” concluded Steins.
Grupo Espinosa: 70 years of constant evolution
Founded in 1952, Grupo Espinosa has been relentlessly supporting the publishing industry with producing more than 100 million copies every year – whether its books, magazines, catalogues or single-order custom prints. No project is big or small for Grupo Espinosa, as the facility can scale up on demand and their turnaround times are highly competitive. Grupo Espinosa works with on-demand digital press or offset press, in paperback with glued softcover binding, PUR softcover binding, stitched paperback binding, binder’s board, hardcover, saddle stitched, Spiral or Wire-O. Equipped with the experience needed for a product to leave the plant ready for distribution, Grupo Espinosa delivers anywhere inside or outside Mexico. Traditionally starting off as a black and white printing press, Grupo Espinosa has experienced transformation first hand – from colour to digital offset printing. Currently, Grupo Espinosa is also looking at making capital investments into audio books to match with the increasing demand.
So how did a seemingly local operation in Latin America become a world-renowned printing facility trusted by hundreds of clients? As Rogelio Tirado, CFO of Grupo Espinosa for the last six years says “It all comes down to our market experience and our dedication to quality”. With nearly 70 years behind them, and located in Mexico City, Grupo Espinosa has two major locations – one spanning 75,000 square metres and the other about 45,000 square metres. Both locations are controlled by a single ERP (Enterprise Resource Planning) system ensuring speed, consistency and quality of work. Tirado says this isn’t their only competitive advantage. He adds “Our competitive advantage is the relationship we have with customers and the trust they put in us with their intellectual property”. Speaking of trust, global publishing giant Macmillan Education exclusively partners with Grupo Espinosa for their Latin America operations, as part of Macmillan’s decentralized hub strategy. Having a facility that offered the full spectrum of service – from storing digital content to printing and distributing – was one of the major requirements for Macmillan, and Grupo Espinosa was recognized as the leading printing hub for providing this 360 infrastructure. Another factor that has led to success for Grupo Espinosa is the absolute focus on quality and time. The staff are committed to providing the best quality in the best possible time, without causing wastage of resources. Sustainability is a huge factor playing into Grupo Espinosa’s operations, and they’ve created a healthy environment with the sustainable use of paper and energy resources as well as keeping their employees – most of them associated with the organisation for over 10 years – happy. He adds, “In order to be truly successful, you need to be good to the environment, employees, suppliers, and your customers. But most importantly, you need to be sustainable, you need to have proper working conditions, pay proper salaries, proper prices for paper, source the paper from sustainable sources, pay your taxes, basically be a good global corporate citizen and that's probably one of the biggest achievements that we have.”