Timo Landener: 0:03

They have to ensure that as of, January, 2024, when you build a building that you know all the time, what kind of materials you have, used, and the same also for then the fashion industry. Yeah, when you think about that the vision is clear, but you have to ensure over the whole supply chain the materials that you have used for a t-shirt the water that you have used also the distribution of it, the transportation. And the storage and all the things needs to be tracked over the whole supply chain, which is hell of work that needs to be done

Tom Raftery: 0:32

good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi everyone. Welcome to the Digital Supply Chain podcast. My name is Tom Raftery, and with me on the show today, I have my special guest, Timo. Timo, welcome to the podcast. Would you like to introduce yourself?

Timo Landener: 0:57

Sure Tom and thanks for having me. Yeah. My name is Timo, Timo Landener. I am a head of innovation manager at Swisslog Swiss Company. Warehouse automation company. So we are delivering material and handling systems in the inter logistics world. And my role there is as I said, innovation manager. So, besides that besides establishing innovation processes and innovation management my task is also to do some futurology stuff. So thinking about future, creating future scenarios, that is more or less what I, what I do.

Tom Raftery: 1:27

Okay. And talk to me a little bit about Swisslog first. Give me the rough size of the company, the kind of industries you play in, and the kind of problems you solve for your customers.

Timo Landener: 1:40

Sure. So, Swisslog is a Swiss company with roundabout 2,600 employees worldwide. We have different locations in, in the usa. But also, of course in Europe such as Dortmund, where I live, where I'm located in, in Sweden. So pretty much all over the world. And what we do is in the intralogistics, we automate nearly everything that can be automated in the warehouse. So, starting from robotics cranes and shuttles. But also of course the digital aspect of that. We are also delivering warehouse management systems that orchestrates all the materials that, are automation oriented. That is more or less what we do and the industries that we are in. I mean, we have a lot of industries, but we pretty much focus on the food industry. That is where we have the big footstep in. But also we are pretty famous in the fashion industry. These are the, the, the two major industries that we are in, and we see ourselves also, especially in the food industry, as a, as, as a kind of expert. Yeah.

Tom Raftery: 2:40

Okay. They're two very different industries. Is it just that you happened to end up in those, or have you chosen those, or how did that work out?

Timo Landener: 2:49

Oh, it's a mix. I would say . When it comes to food, I mean, when I look. To the whole history. I, I started in Swisslog in 2019, in September, 2019. And of course there's a long history before I joined. We have already a strong foot in the door in the food industry over over years, right? So that is, that has really developed and we we do there a lot of things. So the classical distribution centers but also from, from production perspective, we are also delivering warehouse automation systems for the for the industry. And we are also moving more and more to into the last mile logistics with the micro fulfillment centers that we are delivering. So there, we, we have a long history. When it comes to fashion, i t is not that we have chosen for it, so to speak. It was, I wouldn't call it by accident. But we started with e-com years ago. And of course, fashion was already part of the e-com industry. So, over the e-com direction that we have chosen 10 12, I don't know how, how, how many years ago we came into that industry, into the fashion industry more and more often.

Tom Raftery: 3:47

Okay. And when you talk about moving into the whole micro fulfillment area, is this that you actually have micro fulfillment centers or that you are providing solutions for people who have micro fulfillment centers.

Timo Landener: 4:02

Yeah, exactly the second one. So it's not that we, that we operate our own micro fulfillment centers. No. We, we collaborate here with customers mainly in the US nowadays, but we also started to, to have discussions also in Europe for, for these kinds of concepts. But of course we deliver. It's, it's some of the same approach as the big distribution centers. We talk to customers that need automation technology in their distribution centers. And they have asked us literally years ago whether we can also develop a concept a smaller one for, for urbanity for the urbanity, so to speak. And that was the birth somehow also in, in our company to think about micro fulfillment. And it's the same approach. We deliver our automation technology. And that's basically it. So, we hand it over to our customers and they operate that on, on their own.

Tom Raftery: 4:47

Okay, and we're seeing. Globally at this point, we're seeing a large shift away from globalization back to kind of localization or glocalization as it's being called. This is a, a trend that's, taken off really since Covid. Is, is this impacting you guys as well?

Timo Landener: 5:08

Yeah, sure. Micro fulfillment is basically uh, somehow linked to that topic. It's not the reason why micro fulfillment is there. I wouldn't say it like that. And by the way, also the change that you just mentioned, it also started before the pandemic, right? So, some industries they thought about offshoring activities reshoring and, and To get production sites back to the countries because of resilience. So, there were some, some companies that already saw that the, the globalized supply chain, the just in time supply chain is a very fragile one. And of course, the pandemic somehow accelerated all these developments. And when, when I look to, to micro fulfillment for instance, the approach is to have a fulfillment centers or a network of fulfillment centers in the area that talk to each other. They are somehow connected. What we, or how we call it internally, we call this a just in time food microgrid, right? So, when you think about a city, let's take Chicago as an example. Micro Fulfillment Centers 5, 6, 7, 8, or whatsoever, they are, some are located in the urban area and connected to each other that you have all the time the full transparency, how much item you have in the in, in the stock. So that is more or less what we see that in the localized area in the urban area that concepts are more, more coming. When it comes to the overall supply chain change that you, you, you mentioned some industries because of pandemic such as food, they recognized and realized when the the borders are closed it is hard to import fruits and vegetables, for instance. And it's not that globalization is over. There will be in a few years a better balance of globalization and localization then. And what we see nowadays is that a lot of companies are discussing that with us and investing in more localized distribution centers then, rather than to have yeah, the only option of a globalized supply chain. And besides that, I would also add to, to that, that the, the topic of sustainability will also accelerate that, change. I mean, flying fruits and vege vegetables over the the whole planet so to speak. It's not really sustainable. So thinking about a more localized production and a more localized distribution is definitely a better way in terms of sustainability.

Tom Raftery: 7:16

Yeah, the, the concept of Food Miles is, is one that people are starting to become more aware of. I see people now in just in the local shops here looking at the labels of the food for the country of origin, and increasingly going for the more, the more local products. And we're seeing as well a shift to indoor vertical farming, which is really very much in its infancy yet, but that enables people to have i I run a climate podcast as well called a Climate 21, and I had a guy on that last year. Talking about the big indoor vertical farm they have in Kuwait, and they're serving all of Kuwait. They create 500 kilos of fresh veg every day in that vertical farm. And they're building another one in Singapore, which is gonna produce 1500 kilos of greens in Singapore, in the city center per day. So this, this kind of thing is starting to take off. And of course, indoor vertical farms. Huge, huge advantages. They use about 5% of the water, of traditional agriculture and about 5% of the land footprint as well, and no pesticides or herbicides are required. So, and, and the food is produced right next to where it's going to be consumed so, the producers can optimize for things like nutrition and flavor instead of shelf life.

Timo Landener: 8:34

Absolutely. I, I totally agree on that. And I also see the, the, the trends moving into that direction. And when you, when you, you already said all the advantages that in indoor farming can bring there's only one disadvantage and one major disadvantage, and that is the energy supply, right? So for, for, for two reasons. First of all, it costs money rather than the sun. The sun is for free, of course, when you, when you grow food outside, that's one topic. And the other topic is there's always then the question where the energy comes from. So when it comes from fossil fuel, Which is still the case, especially in Europe. Especially also in Germany where I live the CO2 footprint of these farms are horrible, right? So the success of indoor farming is highly linked also to the energy question. So when it is possible that indoor farm can get all the energy out of the sun, and of course there's also the question, okay? We have to store energy somehow, right? So the sun is not always there. When these things are resolved, I think the, the whole industry will, will accelerate their businesses. Yeah. Yeah.

Tom Raftery: 9:35

And in fact, that question of energy was why they built their first, the, the company's name is, &ever, it's, it's a German guy who runs it, whose name escapes me at the moment. But they started in Kuwait because they had access to cheap energy there, which obviously being Kuwait would have a very high carbon footprint to your point, but they're, they're going to Singapore, as I said, because Singapore is shifting to a renewable energy source, which then will bring the, the, the cost and the carbon footprint of their food way down.

Timo Landener: 10:03

Absolutely. And there, there's one thing to to, to add. When you look to the whole world and you, you, you see. And take into consideration regional differences. Indoor farming and vertical farming. It's not only about vertical farming can also be greenhouse farming, by the way. It, it makes sense for different reasons. In, in Kuwait, you mentioned it already. I mean, the climate there is is not a preferred climate for, for plants to grow. That's one topic when you look to, to usa. The, the US has big problems with the soil. The soil degradated over years because of monoculturism. So a different reason, right? There are different aspects and also the Nordics here in Europe. I mean, the climate is also not preferred for, for plants to grow. So there are different reasons why it makes sense, right? But the overall thing about indoor farming is when you only look to traditional farming and the climate change itself we had this summer a very, very long drought period here. And the only mitigation action that we do in, in these kind of periods is to, to bring more water to the, to the fields, right? And groundwater will be an issue soon. So, indoor farming is a resolution, especially for the water scarcity that we are running to because you said it already. Yeah. Water will is recycled in indoor farms up to 95% or so which is pretty good when you compare that with traditional farming where the water that you, that you bring to the fields is gone. Then in the.

Tom Raftery: 11:21

Only a fraction of it reaches the roots and a lot of it then evaporates off and transpires off from the leaves. With the shift to glocalization, we're gonna see an increase, obviously in last mile delivery and last mile logistics. What are the kind of challenges that that brings and how are you helping your customers with that?

Timo Landener: 11:43

Yeah, I, I said it already with a micro fulfillment centers there is one, one option to, to improve the whole situation, so to speak, in urbanity. There are also some concepts out there about nano fulfillment. So even smaller, smaller ones. And the main idea behind that is when you look to the food industry, there are some items and articles and I assume it also goes with you where you don't have fun to buy in the shops, such as toilet paper or tooth paste, or I, I don't know cans of, of corn. These are items that we buy in the, in the shops where we don't have fun with the customer journey in the shops. It's like an automated buying behavior somehow. But there are some other items such as fresh fruits and fresh vegetables where we would like to smell to, to, grab the, the, vegetables also just to, feel it right. And when you, when you, when you cluster both aspects that I just mentioned when you think about the toilet paper you order something online, what would make sense that you do not have to drive to the shop, for instance. And you can decide then whether you would like to get it at home, home delivery, or you can also do curbside pickup. Means that you order something online and you say that you will be there in two hours or so to get the bag. And t hat is something that micro fulfillment ensures that everything that that, that you order online will be then picked up automatically by the system that we deliver, by the way just to, to make that sure when we talk about micro fulfillment, it is not that everything is automated right now. So, we talk about a ratio of 60 to 40, 60% can be automated nowadays, and 40% not right now, but we see some developments over here such as deep frozen articles. It is not so easy to automate them on item base. But nevertheless, when, when you think about ordering something online in Urbanity, we need fulfillment centers to prepare these orders. So that then our customers, which is then in the end grocery or supermarket can decide on their own how to, to make the last mile happen. Can be then last mo logistics with a bicycle or with a, with a van can also be curbside pickup or a mix of both, right? And preparing these orders that is one thing that we can definitely help with.

Tom Raftery: 14:23

Okay. And that 40% that hasn't been digitized so far, you know, what are the challenges to doing that, and do you see it actually happening, being digitized eventually?

Timo Landener: 14:35

I said it already deep frozen items it is not so easy to handle them with a robot, for instance, right? So, they are somehow what is it in English? Glitchy the surface. Slippery. Yeah. The surface is not, not. Really good for robot to, to grasp with these items. But we see some developments here, right? So, nowadays it is that, that manual pickers are running around also in a micro fulfillment center to get these items from time to time we also have a micro fulfillment center next to a shop. So, together with the customer, we decide not to get these items into the micro fulfillment centers. We leave them in the In the shop, and then a picker is going inside the shop to get the, the deep frozen items out of the refrigerators. But this is the, the biggest portion. And there are some items where it does not make at that moment in time economic sense to automate them because it, these are slow movers, so to speak, right? So, leave them in the shops. They are only, I don't know, 10, 10. 10 items also. That doesn't make sense, but this is the, the smaller portion. I would say the biggest portion is really the, the refrigerated articles. So deep frozen, but also the items that needs to be, yeah, chilled with roundabout zero degree Celsius.

Tom Raftery: 15:45

Okay. We're seeing a shift as well to circular economy uh, as, as one of the larger trends happening. Is that something that's impacting in food, in retail, in your customers? Is that something you can help with?

Timo Landener: 16:01

Yeah, sure. I, I mean, we are also right now thinking about that, how does it impact ourselves, but also the whole supply chain. I mean, it is a complete shift towards a circular one from a linear to a circular one. It's a kind of o utopia, of course. And we are right now from innovation perspective, thinking about, okay, if, what does it mean for the supply chain of tomorrow and what is our sweet spot in there? Right? So, when you think about circularity, you have to think about returns management. I mean, it is not so prominent in the food industry, of course.

Tom Raftery: 16:32

fa fashion. I can see it being a big one.

Timo Landener: 16:34

Sure. How to handle that. And yeah, in the fashion industry some of the articles that you have ordered online and you bring them back some of the articles will be thrown away, which is horrible way of, of dealing with returns. So we have to insure that everything goes into circularity somehow, and we are thinking about that, how to automate that at that moment in time. When I look a, a bit back to my history and I designed also a lot of concepts together with customers. The most annoying thing to discuss a digital process was the returns handling right. So it was really the last thing to discuss with customers how to deal with returns. And I think in the, in the near future, it will become more and more important to organize that in a proper way. And it's not about dealing with returns, it's also about repairing goods, right. Patagonia, for instance, and most, like, most likely, the audience knows that they ensure that whatever you, you, bought a sweatshirt or a jacket or whatsoever they, they repair it. Don't buy a new one. We will repair it for you so that you can uh, use them for forever, somehow. And that is, that that needs to be organized not only from, from a, a distribution perspective, but also in the future. Then with automation wherever these returns or the goods that needs to be repaired, coming into a a kind of center a, distribution center or so that needs to be automated. We are thinking about that. But we also see that this is near future, but it is still future. Right. But the good thing is about the European green deal that we have in Europe. It is somehow set in stone that is going to come, right? Yeah. So it's legally binding somehow. But it takes some step. The European Union said that they would like to establish, or they would like to have established circular economy by 2040. Yeah. Which is still 18 years from now on. But it is a transformation process.

Tom Raftery: 18:16

Sure. Speaking of kind of future, we're coming towards the end of 2022, start of 2023. What do you see as, you know, the big trends heading into 2023 and beyond?

Timo Landener: 18:32

Yeah, somehow I said it already with the circle economy, but again, it's utopia and there are some things that needs to be done. Yeah, quite soon I would say to be prepared for that. And one aspect of that is where I'm totally fan of is the Digital Product Passport, right? So, which is a lever, for us as being a consumer to make good decisions whether we would like to buy something or not. And when you think.

Tom Raftery: 18:57

for people who are listening who might not be aware, we've, we've mentioned it a couple of times on this podcast, but just in case people are listening and they haven't heard of the Green Product Passport before, could you just give us a bit of background on that?

Timo Landener: 19:09

Yeah, sure. You can, you can imagine that as when you buy something in the shops and there is a QR code that, that you will scan then. You have the whole supply chain in your hands. You see nearly everything that the product that you, you would like to, to buy has gathered from a data perspective over the whole supply chain means where does it come from? How much co2 emissions this product has provoked somehow to be on the shelf? All these, these characteristics that you need to know and what kind of chemicals are in there, the ingredients blah, blah, blah. All these things that you need to know to make a good decision whether you would buy something or not, right? So it is a set of data that can be then displayed while you scan the QR code, right?

Tom Raftery: 19:51

and this is becoming mandatory in Europe.

Timo Landener: 19:53

And this was becoming mandatory. The European Union and the European Green Deal says that as of 1st of January, 2024 it will be introduced into three main industries construction, batteries and fashion, by the way. And yeah, because of obvious reasons. I mean, these industries, they, especially the construction, have a big, big challenge in, in yeah, in front of them, so to speak, with concrete, which is totally energy in intensive. They have to ensure that as of, January, 2024, that when you build a building that you know all the time, what kind of materials you have, used, and the same also for then the fashion industry. And yeah, when you think about that I mean, the vision is clear, but you have to ensure over the whole supply chain the materials that you have used for a t-shirt the water that you have used also the distribution of it, the transportation. And the storage and all the things needs to be tracked over the whole supply chain, which is hell of work that needs to be done. Right. And when you think about 2024, which is in two years

Tom Raftery: 20:54

Just over a.

Timo Landener: 20:55

over a year. Yeah, exactly. You're right. A year and two months or so there needs to be done a lot of things right. So, and we have to start with that. Now some companies already have started with that and I know also from the discussions that I have some are not 100% aware of that.

Tom Raftery: 21:10

Yeah. It's only, it's only 13 months really. Even when you think about it, it's, it's, you know, it's

Timo Landener: 21:15

pretty sure by the way that there will, will be also some lobby around that. So there will be some spots, some, some blind spots. But nevertheless, it will start, right. So, and maybe it is not 100% working as of the 1st of January, 2024 because of these spots. But it will be a starting point and

Tom Raftery: 21:31

speaks to a trend as well. It's starting in three industries, but it's gonna become a lot broader than that in a very short space of time.

Timo Landener: 21:37

sure. And I'm pretty sure that also in the food industry, we will see that I, me personally, because of sustainability reason. Reasons I tried really. I tried to figure out what kind of products I'm going to buy and what I would, wouldn't, would not like to buy. It is not doable right now to have a good decision because it's purely not possible to find out the CO2 emissions and all also the ingredients from time to time, right. When you look to the package there. I have to translate what, what is written over. They are, I, I do not understand chemical languages, so it's not so easy to, to do that. And imagine that for the food industry in the future, maybe in six years, seven years time, there is a can of corn or I don't know, it's something else. You scan the product and you see everything. You have the whole food supply chain in your hands, and then you, then the society has really a lever in their hands to make a change, right?

Tom Raftery: 22:27

I, I've, I've mentioned it on this podcast a couple of times in the past. Yeah. So apologies for anyone who's listening to this again and again and again. But I, I drink oat milk in my coffee and I use a brand called Oatley. and they, they print on the side of the packet the CO2 footprint of each individual carton of, of oat milk, and it's useless. It's nice that they do it, but it's useless because if I pick up a competitor's oat milk, there's no CO2 footprint on it. Or if I pick up a bottle of dairy milk, there's no CO2 footprint on it. So I have no idea if the CO2 footprint of this carton of oat milk is fantastic or horrendous. You know, so that needs to be, to your point, that needs to be mandated in the food industry with the digital product passport or some other mechanism that needs to be mandated, that everybody reports the CO2 footprint of everything. And then you can cross compare and make, decisions, make data based decisions, you know? So,

Timo Landener: 23:22

I, I, I mean, when you, when you think about that, I'm pretty sure that in future we will see some apps where you can preconfigure some of your values, for instance. Right. Also allergies, when it comes to food of course, but also other stuff like okay, this is the maximum amount of CO2 which is acceptable for me to buy. So you can precon figure everything, and then you scan only the product and there will be a green tick in the box or a red one, right? So,

Tom Raftery: 23:47

Makes a lot of sense. Yeah. Yeah. Timo, we're coming towards the end of the podcast now. Is there any question that I haven't asked you that you wish I had or, any aspect of this we haven't touched on that you think it's important for people to be aware of?

Timo Landener: 24:00

No, not really. But I would also say to the audience I mean, we, we touched a, a few topics when it comes to future. I would be happy, really happy when I can enrich also my knowledge in deep discussions with potential collaboration partners or customers or whatsoever people that have insights of all the, also the topics that we had just mentioned. Because I think bringing different perspectives to a certain topic is always of value. And um, this is my invitation to the audience whenever there is something. You have a different opinion on or you have a different view, or you would like to discuss this with me or with some of my colleagues from Swisslog I would be happy to do that.

Tom Raftery: 24:37

Okay. That leads me nicely into my last question, which is if people want to know more or contact you or talk about any of the things we discussed in the podcast today, where would you have me direct them?

Timo Landener: 24:47

I, I would prefer to do that via LinkedIn. Right. So you, you, find me definitely on LinkedIn. From time to time I'll write some, some, some articles over there some small ones, some statements. You'll find me over there, contact me and I will contact you then again.

Tom Raftery: 25:01

Cool. I'll, I'll put your LinkedIn link in the in notes of the podcast. You also Timo have a podcast, which you haven't mentioned yet. Do you wanna talk a quickly, a little bit about that?

Timo Landener: 25:11

Yeah, sure. It is called Das Gleiche in Grün, that's German, unfortunately. For the audience, it's in German. Uh, It's translated in the sa, it's "The Same In Green", somehow. That's the translation for the podcast title. And what we do is we combine logistics and sustainability and we give people and content the platform to inspire our audience role models in, in specific industries or specific processes or innovation. And we, we, we said to our selves, I'm doing that with my, with my colleague and friend Moritz Paterson, a professor from the Kuna Nagle University in Hamburg. Professor of sustainability, by the way. We said to ourselves that we would share pretty nice and inspiring content so that the people, the audience see, okay there's something which already is happening. And maybe we can also do that. What's we discussed o on the podcast here.

Tom Raftery: 26:04

Fantastic. I'll put a link to the podcast as well in, in the show notes for this episode so people can find it quickly. And as you say, it's in German, so if you are a German speaker, it's ideal for you. If you're not a German speaker but you want to learn some German

Timo Landener: 26:16

Yeah,

Tom Raftery: 26:18

maybe get on duo lingo and listen to it as well. Other, other than that, Timo this has been fantastic. Thanks a million for coming on the podcast today.

Timo Landener: 26:25

Thanks for having me, Tom.

Tom Raftery: 26:28

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, simply drop me an email to TomRaftery@outlook.com If you like the show, please don't forget to click Follow on it in your podcast application of choice to be sure to get new episodes as soon as they're published Also, please don't forget to rate and review the podcast. It really does help new people to find a show. Thanks, catch you all next time.