Beyond Threads - Ep. 3 - De kracht van software in logistiek met Kevin Paindeville & Bart Gadeyne

Transcript

<sub>Erik Janssen Steenberg: Hi there, and welcome to the Beyond Threads podcast by Bleckmann. My name is Erik Janssen Steenberg. I'll be your host today and I'm thrilled to have you here today. We have an action-packed podcast for you with some exciting topics and discussions. And regardless if you're joining us from your couch at home, from your car during your commute, or from your office, it's nice that you join us, so let's get going.

In all episodes of Behind Threads, we dive deep into topics that are relevant at the moment to keep you up to date on all the developments in the logistics sector. Today, we have a particularly exciting topic because we're taking a deep dive into innovations. What does it take to stay relevant in logistics in supply chain management, in fulfilment? And what do we need to do to make sure that we keep up with the developments in our sector? So, today I'm joined by Kevin Paindeville, Bleckmann's very own Warehouse Solutions and Innovations Director.

Welcome, Kevin.

Kevin Paindeville: Thanks for having me. Great to be here.

Erik Janssen Steenberg: Absolutely. Our second guest is Bart Gadeyne from Optioryx. Thank you for being here today.

Bart Gadeyne: Thanks for having me. Very excited to be here.

Erik Janssen Steenberg: Absolutely. Today, we'll be covering the topic of software systems in logistics. Kevin, to kick things off, Can you give us a brief overview of what those innovations in software applications are and maybe start off with a brief introduction of yourself.

Kevin Paindeville: As you mentioned, my name is Kevin, I've been working at Bleckmann for 4 years. I'm responsible for warehouse solution design and innovation and I've been working in logistics for over 15 years. I try to help companies to optimize and streamline their operations.

Coming back to your question, if you look at the timeline the evolution of software in logistics started with pen and paper. Then we saw evolution, where some software dedicated for this purpose was developed. The so-called warehouse management system, transport management system.

Those monolithic applications that are very useful and were a big jump from the pen-and-paper way of operations. The last couple of years, we've seen a revolution where vendors of WMS and TMS try to propose all those features that were embedded in monolithic software and propose them as individual features, the so-called...You can call it via API, and receive feedback. The so-called microservices approach. That's an evolution we see and notice, and it's a great evolution.

Erik Janssen Steenberg: You made me feel old there, because I can still remember going into the warehouse with pen and paper anytime I wanted to see something.

Don't feel so old. There are still warehouses where pen and paper is used where WMS and monolithic transport measuring systems are used. We've just seen a couple of them that use microservices-based software so don't feel old.

Erik Janssen Steenberg: No, but developments move very quickly.

Kevin Paindeville: Correct.

Erik Janssen Steenberg: And ever quicker.

So, what role does software currently play in enhancing logistics and warehousing for our customers and in the industry altogether.

Kevin Paindeville: If you first look at the jump from pen and paper to using WMS in the warehouse you started logging every action in your warehouse keep track of your inventory, of the processes, productivity, and so on. You become more aware of what's really happening in your warehouse. Since the last couple of years, evolution is really about the optimisation on top of it. You can really squeeze the gain you can do within your warehouse.

Erik Janssen Steenberg: Right, so it starts with knowing what you don't know, getting more aware and then you apply it to your own benefit. Oh that's... Okay.

And of course, Optioryx has played a role in that within Bleckmann. And we're very lucky to be joined today by a representative of Optioryx. Bart, can you please introduce yourself and explain what Optioryx is all about and how they help companies like Bleckmann?

Bart Gadeyne: Sure. I'm Bart, founder of Optioryx. I have a background in algorithm development. The last 10 to 15 years, I've been focusing on bringing algorithm development into the logistics industry and getting to those value cases. And 2 years ago, with Vic and Gilles, I founded Optioryx. There we focus on bringing optimisations to the warehousing industry specifically. To be more precise, we help companies like Bleckmann increase picking productivity and also to ship less air in boxes, on pallets, and in trucks. And to gather master data in a more user-friendly way.

Erik Janssen Steenberg: Yeah, where 'please' and 'thank you' used to be the magic words these days it's 'algorithm', indeed. You can hear the word everywhere. So, it's good to know you, because it's still Greek to me. But how is Optioryx then revolutionizing logistics through its software?

Bart Gadeyne: Kevin already mentioned it. Typically, logistics providers use warehouse management systems. But very often these systems have intelligence gaps. They use a lot of business rules to streamline operations. But sometimes the optimisation power is not there. And this costs logistics providers a lot of money. And that's where we come in. We have a techoriented team that focuses on the AI component. We develop AI add-ons to streamline those processes and make them more efficient. Just to name a couple of problem processes we identified.

First of all slotting. That's putting the SKUs, the products, on a specific location ID. If you don't do this correctly, you end up with long walking distances. And AI can play a role there.

We can detect order patterns not only looking at sales rotation, but also item correlation. Take for example shoes and socks. They are often sold together in the fashion industry, so yes, it's better to put them together. It sounds very easy, but if you have thousands of SKUs it becomes big data, and then you need advanced algorithms or AI to solve that.

The second one is picking optimisation,so order grouping. If you base this on business roles, you end up with long walking distances. The same goes for packaging, so there we have 3D-loading load building algorithms to give box recommendations. We do the same in trucks.

And last but not least, we've seen that master data gathering is very important so, dimensions rates, stackability classes, fragility, etc.to be able to optimise the other processes. But yeah, the currently used systems were quite expensive and not so easy to use, so for that we developed a product as well.

Erik Janssen Steenberg: And specifically about your last example. That really hits a note in my book because I've seen that even the very large brands that we work with or brands that we don't work with as well we see they're very knowledgeable about their products what they sell and how they want to sell it. But they are far less educated or automated on capturing the weights, the dimensions, the characteristics of their own products. So, I think that's a huge game changer for companies like Bleckmann.

Bart Gadeyne: Absolutely.

Erik Janssen Steenberg: Bart, can you share a specific example of how your software has changed a process, or segments of processes, within a Bleckmann warehouse?

Bart Gadeyne: Yes, to elaborate on what you mentioned about master data. It's a pain point every company is facing. So, that's what I'm really proud of, how we got there. So, we had these packaging recommendations but if you want to do that, you need the right master data. Customers wanted to move ahead with optimisation products, but lacked the data.

So, then you look for alternatives, to be honest. You can take manual measurements with the old tape measure, but it's not ideal. Again, I can remember. Or you can go for the more expensive static dimensioners which are a bit capital-intensive. So, I can still see our team sitting in the pub around the corner near the office. We were thinking: How can we help these customers? Because a problem for them is a problem for us.

And all of a sudden, after a couple of beers, my co-founder Vic saw the light. The famous Ballmer Peak. You have one for coding. But you also have a Ballmer Peak for creative thinking. So, he had a lightbulb moment on how to create the first mobile dimensioning app. So, we said: 'How long will it take?' He said: '2 weeks development time.' And 6 months later, he finally finished the app. But it allows you to capture master data very easily just by walking around with a mobile phone or an iPad. So, how is this put in operation? Most of the time, it's on inbound. When a new SKU comes in you run some kind of checklist. Which supplier is it? What are the weight and dimensions? Is it fragile, is it stackable, or not? But we see that's use in all kinds of processes. Also in outbound operations, to calculate shipment costs of a pallet. Nowadays, volumetric transport rates are going up. That's also a pain point. And if you don't have a static dimensioner, you can walk around the pallet, scan it and immediately capture those dimensions to calculate the rate and invoice amount. It's also being used in hospitals, so it has a wide variety of use cases.

Erik Janssen Steenberg: That also means that it's very exact. Otherwise it's not allowed to be used in a hospital environment. Now getting back to capturing of data at inbound. Don't underestimate the impact, because don't forget the products that we ship, belong to our partners, the brands. Even though they spend a lot of time and money on designing their products they'll never have held that exact product in their hands when we receive it. We are the ones actually looking after the product's quality and quantity. And with your tooling, we can do that a lot better, and a lot more precise and in a quicker and more cost-efficient way. So I, for one, can see the benefits most definitely.

Kevin, can you share a bit more about Bleckmann's case study or business case around the success story with Optioryx?

Kevin Paindeville: Sure. So, we were talking a few years ago, I think it was 2 years ago and we were meeting Bart, Vic, and Gilles for the first time in one of our warehouses in Belgium. It was just before Black Friday. And we were just brainstorming about some potential use cases.

Bart Gadeyne: I still remember. I was pitching the load building capacity and Kevin said: 'We don't need this here. We have fashion products, it's not that interesting.'

Kevin Paindeville: But still, we came to this idea where I said: 'Okay, we still have, we innovate and automate, but we still have a lot of manual operations. And it would be very nice if we're able to optimise our picker's walking distance. When you look at the picking process, at the literature, and also in the database 50 or 60 percent of picking time is spent walking. If we can reduce it...

Again, it's the reason why the goods-to-man solution in automation is very, very popular. But for our customers who still work manually there is an opportunity to make gains. So, we were brainstorming a bit during that meeting and then Bart said: Let's think about that and come back to it later. And I think you organized a hackathon or something.

Bart Gadeyne: Yeah, we were on a team-building trip and one day, we decided to tackle this case. We got some data from you as well, and then we put the entire team on it. We didn't get a full-blown solution, but a good start. Let's call it that.

Erik Janssen Steenberg: But with current developments on the labour market, it's a very good idea if we stay close to Gilles and team, and Bart. Because the tightness on the labour market isn't going away, so the more we can offset on travel distances, the better it is for us.

Kevin Paindeville: A few weeks later, they came back and said: 'Look, this is the result. It's not yet final, but we want to give you some insights. We saw the first simulations based on this and saw there is huge potential here. So, we did some more analysis. We made a case. We presented it internally. We got approval from the project board to continue. And last year, I think, we implemented it at a first customer in the UK. And there we saw huge savings and a huge potential.

To give you some numbers, we saw for that particular customer a saving of up to 20% for walking distances. Not for one person, but on the whole...

Erik Janssen Steenberg: No, the overall operation.

Kevin Paindeville: A 20% saving doesn't mean a 20% productivity increase. As I said 50% or 60% of picking time consists of walking. But still, you have a potential 10% to 11% increase in productivity. We did a pilot and verified it, and that's exactly what we got an 11% productivity increase.

Bart Gadeyne: Again, during the pilot, it's always important to match theory with reality. Because you can calculate something, but does that translate into actuality? So, we started out following somebody with a measuring wheel and a stopwatch to check if it translates into reality. So, we were following one person who was doing the picking. And we saw it matched with what we had in mind. Then we put one person live on the system. The optimized is also more or less in line. Then we thought: 'Let's put 5 people live on the system.' We saw the same thing. Then we did the entire warehouse and their picking productivity increased step by step. So, that was nice to see. Now, we're in the rollout phase of trying out the same system in many warehouses.

Erik Janssen Steenberg: Well, if you have up to 4,000 people working in warehouses doing picking, packing, et cetera, a 12% improvement is nothing to sneeze at.

Bart Gadeyne: And we're not stopping there, Erik. So, we got another post, as we want to optimise the order grouping. If you group 20 orders in one pick route it's good to do so in a more effective way. We're seeing very big gains there. So, we're doing that in parallel. And later on, we will attack the slotting optimisation.

Erik Janssen Steenberg: Okay guys, looking ahead, what specific trends do you see emerging in logistics and in logistics software?

Kevin Paindeville: One of the trends is all about cloud technology on the premises but with the cloud, you can instantly increase capacity on the fly. Also digitally, where you can simulate your processes in virtual reality and replay the day, add some virtual changes, and see what the impact is. That will save a lot of time instead of implementing a change, waiting a week and looking at the numbers. We can digitally play the scene and see the impact.

Bart Gadeyne: Nowadays, logistics providers are overwhelmed by the options in automation. At some point, It doesn't work for all operations or all SKUs. You've got the microservices we were talking about. And I think for logistics providers it's just a very important capability of having all that knowledge.

So, if a new fashion customer comes in and you look at the order profile: What do we need here? Do we need automation? Do we need optimisation? Sometimes it can go hand in hand, but that capability is key for being a very good logistics provider. I think Bleckmann has that capability right now. So, I think you guys are on a very good track.

Erik Janssen Steenberg: Okay gentlemen, thank you very much for your insights. In my modest opinion, it was a veryinteresting talk. We've learned a lot. Bart? In case members of our audience want to discuss your products, or the assistance you can give, how can they reach out to you?

Bart Gadeyne: We post some content every now and then, mainly on use cases and the optimisation cases we do. Go to our website optioryx.com, or you can follow us on LinkedIn as well.

Same question for you, Kevin.If our audience wants to learn more about what's going on within Bleckmann or how we can help them adapt to the ever-changing sector we operate in how can they reach out to you?

Kevin Paindeville: The same answer. On our website, we post some use cases and things we do with innovation. If they have particular questions, they can reach me on LinkedIn, of course. And when you don't know who to reach out to in the Bleckmann team simply go to our website, and use the links that are on there.

Erik Janssen Steenberg: For those tuning in, make sure to subscribe to stay on top of all developments at Bleckmann and within the sector where we operate. And you will automatically be invited to join our next podcast. Again, thank you very much for joining today and see you soon!</sub>