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.