The future of warehouse space “We can compensate fluctuations well”.

What was still emerging as a trend at the start of the new millennium has long since become social reality: people like to order online, especially in the B2C sector. Compared to 2010, the volume of trade in e-commerce has almost quadrupled (Statista, Jan 2020). Covid-related lockdowns underpin the rising online trade in our society.

Factors such as growing e-commerce and uncertainties in global supply chains ultimately influence the demand and need for warehouse space. But what impact do these factors have on warehouse capacity in general and how must warehouse logistics change specifically when individual products need to be available more quickly? logistik aktuell spoke to Ole Trumpfheller, EVP Contract Logistics & SCM at DB Schenker for the Germany and Switzerland cluster, about the implications of this development.

logistik aktuell: Mr. Trumpfheller, the pandemic has affected most sectors of the economy – including our industry. Online trade is booming and pandemic-related lockdowns are reinforcing this development. What specific impact does this have on warehouse space? Is there a backlog of products or is there a big void when supply chains are interrupted?

Ole Trumpfheller: It varies from product to product and location to location, as we cover a wide range of customers at our more than 90 contract logistics sites in Germany and Switzerland. Initially, the lockdown had a major impact on our automotive sites, some of which came to a standstill for a short time. Meanwhile, however, this is no longer the case. At one of our sites, for example, we package spirits for end consumers and here sales have increased since the COVID outbreak. At another site, chocolate, which is sold particularly at airports, is stored and packaged – there, of course, we no longer have as much activity. When virtually no more goods came from China in the winter of 2020, many European warehouses were pretty empty for a while, and then when the Chinese economy got a boost again and a large volume of imported medical products added to the trend, free space was in short supply. So it is an almost daily challenge in contract logistics to manage these demands and changes operationally.

How does increasing e-commerce trade affect the size, location and requirements of intermediate consumer goods warehouses?

Amazon – the market leader in e-commerce par excellence – is already demonstrating the requirements that an ever faster supply chain entails. Since the supply is increasing at the same time, the warehouses are not getting smaller, but there are still more of them. However, the majority of DB Schenker’s contract logistics sites operate in the B2B sector – we are diversified and flexible, which is why we can compensate well for any fluctuations.

Ole Trumpfheller, EVP Contract Logistics & SCM at DB Schenker (Germany/Switzerland)

“We are diversified and flexible, which is why we can compensate well for any fluctuations.”

Let’s take a look into the future. How do you think warehouses will be sorted and operated in the future so that orders can be filled as quickly as possible?

The answer here is not always automation, because in addition to faster processes, customer requirements are also changing more and more rapidly. An automated solution can often only be adapted to specific requirements though. Therefore, there will always be manual processes in the future, which will of course be optimized through new technical innovations, such as pick-by-vision or exoskellets as lifting aids. Through the interaction of optimized processes and sensible automation, warehouse processes will still be able to be accelerated more and more in the future.

In the meantime, just-in-time delivery is also becoming increasingly important in industry. What needs to be considered here in terms of warehouse size?

Just-in-time is not a new invention in industry, and just-in-sequence (i.e., delivering the right goods, at the right time, in the right order) has also been practiced for some time. However, it still brings challenges. The need to keep a high variety of goods in stock increases the demand for space accordingly. A line stoppage due to missing parts makes every logistician sweat. High-bay warehouses help to utilize and compact the warehouse space as much as possible. DB-Schenker manages to combine flexible and breathing warehouses with supply chain monitoring so that, for example, a semiconductor bottleneck or the blockage of the Suez Canal does not bring production to its knees.

How flexibly can the warehouse systems react to changes at short notice – for example, when there is a surplus of goods or a lack of replenishment?

We are dealing with two very different problems here. When there is a surplus of goods or a lack of replenishment, even the best storage system is of limited help only. If a warehouse is really full and there is no alternative space, every square meter is used. All this means that storage and retrieval processes can slow down. DB Schenker is very well positioned in this respect, however, with over 1 million square meters of warehouse space in Germany alone. In the event of a lack of replenishment, a well-parameterized warehouse system detects this emerging bottleneck at an early stage, enabling a preventive response. Ideally, this replenishment monitoring is also in line with the customer’s delivery planning.

What technical innovations are there for warehouse operations? Has the COVID crisis triggered or accelerated new developments?

First of all, technical innovations in some warehouses have helped us to ensure that our employees are reminded of the distances between each other. As soon as employees get within 1.5 meters of each other, a device on their belt vibrates or a special high-visibility vest starts glowing. If a COVID event occurs, the employee’s contacts during working hours can be tracked. The already mentioned exoskeleton also helps to keep employees from coming too close to each other. While two employees had to lift a heavy part together before, technology now helps and the task can be done much easier alone.

“Ole Trumpfheller, EVP Contract Logitics & SCM at #DBSchenker, explains why #warehouses need to breathe during the pandemic and why #automation is not always the key to happiness.“

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However, since major innovations in the contract logistics world often take a few years to really catch on, it is not yet possible to say whether the corona crisis has had an accelerating or decelerating effect here in getting this off the ground.

Thank you, Mr. Trumpfheller, for the interview!

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