Intralogistics: are they the ultimate efficiency lever in supply chain management?

As a result of the pandemic, the news is filled with stories about disrupted supply chains, semiconductor shortages and increasing logistics prices. Nevertheless, the pandemic is not entirely to blame, but it did underscore the supply chain problems many companies were already facing prior to COVID-19. On the other hand, it has led to activities aimed at improving efficiency and transparency in the supply chain. Most of these activities are focusing on improving inbound logistics processes to secure the delivery of materials and parts. However, one crucial part of the logistics chain is still missing: intralogistics.

Intralogistics: an often overlooked aspect of the supply chain

Intralogistics is best defined as the logistic processes within a factory, including warehousing, material flow, transportation, as well as the picking and commissioning of final products for customers. Providing the material for production and assembly is critical for meeting manufacturing schedules and driving an efficient production unit. The shorter product lifecycles caused by the changing consumer behaviors and the individualization of demand have a severe impact on production processes and structures. Thus, production and assembly lines must be more adaptable to cope with smaller production lots and frequent changes in production schedules.

Intralogistics — especially the provision of material and parts for production — must adapt to these changes to provide smooth deliveries to the production and/or assembly line. This leaves us with the question: Is intralogistics prepared to fulfill this task?

Technologies employed today include tracking technologies such as RFID or barcodes, and transportation vehicles such as forklifts and automated guided vehicles (AGVs). Manufacturers are also investing in real-time locating systems (RTLS) to track containers of production material within plants, or the movement of transportation vehicles to optimize the number and routes. Through smart glasses, augmented reality supports the picking of goods in warehouses, displaying order information to pickers and guiding them to the right locations.

While this will improve intralogistics operations, it’s doubtful that these technologies alone will suffice to meet production demand, since they may not be suitable to meet dynamic transport requirements and have limited flexibility for path planning. Furthermore, internal transportation of material to production lines is often realized by using the “milk run” concept. It comprises a transport network where a single vehicle will pick up input materials at various stations according to a fixed schedule. This is contrary to the fact that the supply of production lines is demand-driven, such as by employing a Kanban System. This discrepancy in system logic must be overcome by additional transport capacity, which may be more than is needed from a manufacturing point of view.

The future: flexible and adaptable intralogistics

So, what will it take to create more responsive, flexible and adaptive intralogistics?

First, simulation will become increasingly important for developing and defining intralogistics planning, control and monitoring mechanisms. In addition, the intralogistics structure must transition from centralized, hierarchical organizations to networked and autonomous systems. This will enable decentralization and self-contained management of internal material and information flow. In addition, new technologies and systems will support further automation and optimization of intralogistics in the future. Some of these technologies are:

1. Intralogistics digital twin
This involves creating virtual twins of assets and intralogistics processes to trigger preventive maintenance activities for critical transportation means, and to provide reliable information for decision-making. An intralogistics twin will be a combination of various twins — for AGVs, logistic processes and/or logistics infrastructure, for example.

2. Transportation technology
New technology such as AGVs with laser-controlled navigation for autonomous routing, logistics trains replacing forklifts, or self-organizing conveyor systems will provide more flexibility in intralogistics.

3. Humanoid robotics
These are multifunctional robots capable of learning and adapting to tasks. They will learn from humans and work in teams with them. The goal is to achieve a form of ideal work-sharing between humans and machines by leveraging each other’s strengths.

The success of this partnership will heavily depend on the effectiveness of the human machine interface (HMI). Worker acceptance of the interface is essential to establish trust in the robot-worker relationship. The application of speech and gesture in the interface seems to be the most promising in that regard.

The success of these new intralogistics approaches will depend heavily on whether technology and processes can be well-integrated into one system. Worker motivation is of prime importance, so the highest degree of task automation might not be desirable. Instead, the different behaviors of man and machine must be balanced, and we must define the optimal areas of collaboration to deliver truly optimized intralogistics.

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About Stefan Zimmermann
Global Head of Incubator Portfolio Industry Manufacturing
Stefan Zimmermann is responsible for the innovation and portfolio development in Industry 4.0 at Global Atos B&PS. He aims at helping industrial companies to identify business opportunities enabled by Industry 4.0 during their digital transformation process, embracing the Industry 4.0 framework. He’s got a very strong industrial background, having worked for companies like Siemens (>10 years) and Rheinmetall Group and also comprehensive consulting skills gained when working for Roland Berger & Partner.

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