Richard Kirker: 0:03

In the space of warehousing, one of the things is determining where I'm going to store certain products. And this could make a lot of things that could go into the physical aspect of the product. Is it heavy or light? but also its demand pattern, you know, do I pick it all the time where it should be in a pig face? And then how do I represent a shed? And so it can, you can do a lot of optimization around the storage strategy of a product.

Tom Raftery: 0:29

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, global Vice President at SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today I have my special guest, Richard. Richard, welcome to the sap digital supply chain podcast. Thank you. Would you like to introduce yourself?

Richard Kirker: 0:59

Sure. Thanks, Tom. Yes, I'm Richard Kirker. And I'm the solution manager for warehouse management at SAP.

Tom Raftery: 1:06

Okay, Richard, when we were chatting in the prep for this call, you talked about the importance of warehousing. And I said to you that, you know, you hear a lot in the news bizarrely about supply chain these days, which is something we're not used to. But we are hearing a lot of it now recently about, you know, problems with ports and things like that. And you mentioned that warehousing has a part to play in this as well. Could you talk a bit about that for people who are listening?

Richard Kirker: 1:37

Yes, Tom. I mean, there's certainly shortage of resources at ports and with truckers. And that gets a lot of attention. But goods need to be stored in warehouses still. And it's even become more of an issue with the surge in e commerce. So what we see is now we have to have warehouses close to population centers to do next day delivery, same day delivery. And you can even see that private equity firms are investing a lot into warehouse real estate, the rents are at an all time high. And also the warehouse is kind of look this last step and having a delightful user experience which is demanded in e commerce that people want things on time. They don't want to sacrifice in customer service. And so the warehouse plays a very big role. It's also affected by resource constraints with warehouse workers, as we have talked about Amazon is hiring 150,000 seasonal workers. And if you run a warehouse, and Amazon is located close to you, you have trouble retaining workers. So warehouses need to be efficient in this current supply chain environment.

Tom Raftery: 2:51

So warehouses need to become more efficient, what are some ways that warehouses can become more efficient?

Richard Kirker: 2:59

Yes, well, automation is one. And warehouses have traditionally used various automation, automatic storage and retrieval systems and so forth that are very much focused on efficiency. However, when you have disruptions, like we've seen in the past few years, you also need flexibility. So a very predictable product like toilet paper, which you've never had to allocate, suddenly, you have to allocate your stores for examples. So one of the things needed now is flexibility. And this is where traditional automation being, you know, not being very flexible, we see it moving over into robotics. Robots, for example, can you know are collaborative robots is recalled can be deployed in different areas as needed. And they can take over tasks that humans don't have to do. And so that introduces not only efficiency, but a level of flexibility that has been hard to come by,

Tom Raftery: 3:58

and what kind of tasks would they be

Richard Kirker: 4:01

Typical, the first thing they doing is what we call load carrying tasks. So for example, in a warehouse, someone may be picking product onto a pallet onto a card, and then that needs to be taken to a packing area or shipping area. And so Traditionally, the forklift drivers when we drive that way, and since warehouses can be quite large, it's just a lot of driving. And the robots can take that part over, and unlike, say, automatically guide vehicle that's running through some kind of a track or wire, they can be trained and kind of mapped warehouse, they have sensors and cameras to prevent them from running into other things. And so they, you know, just as a person would learn their way around, they can be taught the way around, and then that way, they can operate independently. And that's the first thing you see and then some more sophisticated ones, you know, we could do actual picking or move, you know, shelves around so the they bring the product to the worker, and then we're looking at also some very efficient Robots about unloading trucks that are floor loaded, which is a very difficult task. And that's something that you even have some robots that can pick up cases, that, you know, the more sophisticated ones

Tom Raftery: 5:10

Ah interesting. And I mean, the traditional kind of worry about these robots is that they're going to come and take everyone's jobs, but what you're telling me is, in fact, they're coming to do work that we can't find enough warehouse workers for,

Richard Kirker: 5:30

right, or they're making the tasks or taking the tasks that the worker net doesn't necessarily need to do. So picking individual products off the shelf, you know, with a hand, the hand is a very unique human thing, it's hard to substitute. But driving from one side of the building to the other, is not something that that the human really has to do. And so that's why they're called collaborative robots. They say that they take tasks, they don't take work. So it's really, you know, to be in concert with what the humans are doing.

Tom Raftery: 6:02

Okay, and can software help?

Richard Kirker: 6:05

Absolutely, absolutely. I mean, if you'd look at just what warehouse management systems have done is they you know, have shown you can get more product into a space. So when we talk about these real estate costs, that you know, you have to use the space efficiently, and you need the need to use the resources efficiently, which, which, you know, are vehicles types of devices, and the software can definitely help with that. And, you know, with a good warehouse management system, the worker feels more productive and has more satisfaction as well, I mean, they have information that they need, and, and, you know, a sense of efficiency. So, software in warehouse is, is really required, because you're paying high rents, you're paying more resources, and you have a very demanding customer, especially in the e commerce world, but not only in e commerce, because now that we all have that type of experience we expected in our industry as well. So we want that same level of traceability and reliability of when something's going to ride.

Tom Raftery: 7:08

Okay, and the other big trend we see in software is kind of the consumerization of software, you know, with enterprise software becoming more like the kind of software we're used to seeing on our iPhones. Whereas, I mean, correct me if I'm wrong here, but warehouse software has traditionally been a bit kind of, maybe antiquated is too strong, the word but hasn't hasn't kept up. Is it consumer rising as well?

Richard Kirker: 7:37

Yes, it absolutely is. And that's the thing because warehousing has been mobile for quite a long time. But it's, it's been kind of stuck with these very industrial devices, you know, minimum real estate on the screen, a lot of codes and a lot of abbreviations, and so forth. But the computing power of what we have in consumer mobile devices, such as smartphones is not really been taken advantage of until recently. So you need this consumer type experience for two reasons. One is that the resource constraints I mentioned is that workers are coming to work in a warehouse in a more transient fashion, you don't want people working 30 years, like you did in the past. So they need to be able to pick up and become productive quite quickly. So the analysts talk about low touch training, you know, you can say, oh, all these codes, and here's a list and you know, what's going on, it needs to be more like, you know, picking up a new app on your smartphone and using it, you know, very quickly. The other thing is, there's a lot of computing power in these devices, you know, contextual awareness to be able to know where you are. So to do things like indoor navigation within the warehouse to, you know, give you a little map of where to go next. And the other things like optical character recognition, you know, maybe I don't have a barcode, and I can scan a number that's written out, or the barcode is damaged. Or the smart devices can figure out from, say, five barcodes on a box, which one is the product number, which one is the serial number, and so far, so these are things these smart devices can do to make the process more flexible, but also more efficient, and more like people are used to using a smart device.

Tom Raftery: 9:24

Okay, so that would mean that people would be using devices more like more similar to the ones you're used to using day to day rather than having to use specialized devices. Is that it?

Richard Kirker: 9:35

Yeah, that's what we're seeing. I mean, you do still have ruggedized devices, and you have quite a bit of variety, you know, depending on the type of product, whether it's a vehicle mount or not. And there's even some wearables now, you know, they're trying to, you know, free up the hands and that's where the use of voice in the warehouse is big because you can just get instructions and answers and, and so forth. So you've seen some, you know, smart glasses, technology and so forth. So you won't have to have the traditional device manufacturers moving more towards smart type devices. And then we also have apps, you know, that are coming from the consumer world where you know, they are becoming able to use in the enterprise or an industrial settings. So for example, apple, you know, has devices that, you know, you can drop and you can do all kinds of things with that, you know, are quite rugged and then there's accessories to go with them to put them into these environments. So you see it coming from both directions.

Tom Raftery: 10:33

Interesting. Yeah, cuz that they the latest versions of the iPhones the 12. And the 13. They advertise them as having a ceramic shield on the glass, which means they're, I forget how many times less likely to to crack in the event of a fall.

Richard Kirker: 10:48

Absolutely, yes, that's that's something I've seen. And and the big thing about it, they have a commercial where they drop one into a dish, a sink full of dishwater, you know, but I'm trying to show I mean, that's not really great for an enterprise market. But I mean, the point is that they are a lot tougher than people think just because they're they're so small that but they they are quite rugged.

Tom Raftery: 11:13

And the the shift in e commerce that you referenced at the start, and the implications that has had for location of warehouses, and probably number of warehouses. So what I'm what I'm thinking there is the board, the amount of warehouses has probably risen in the last few years just to meet that increased desire, and their location is probably really changed as well. Is that fair?

Richard Kirker: 11:39

Yes, absolutely. I mean, I read all the time in in the Wall Street Journal about equity, investors, you know, private equity, investing in these real estate firms that specialize in warehousing, and, and news of new warehouses being built. I live in Atlanta, Georgia, which is a transportation hub, and they are constantly building new, large warehouses around this city, and you hear about the major companies, you know, opening up bigger distribution points. So to meet this demand for all this, let's say e commerce and so forth, and you really do see a lot of warehouse construction in the United States these days, you can read all the time, how the, the cost of those buildings is higher, you know, because of where they're located. And in my career, I've been to a lot of warehouses that are out in the middle of nowhere. And I can't say that they're definitely being moved. But you definitely see them around big cities. And so far, so there's a huge, huge demand in that area. And because those costs, of course, are higher, they need to be efficient,

Tom Raftery: 12:49

right? Yeah, that makes sense. What about things like some of the newer technologies, artificial intelligence, blockchain machine learning? Are these playing a role in some of the developments?

Richard Kirker: 13:01

Yes, we're absolutely looking at applications in our supply chain portfolio for machine learning. And for artificial intelligence. In the space of warehousing, one of the things is determining where I'm going to store certain products, and this could make a lot of things that could go into the physical aspect of the product, Is it heavy or light? but also its demand pattern, you know, do I pick it all the time where it should be in a pig face? And then how do I represent a shed. And so it can, you can do a lot of optimization around the storage strategy of a product, and it goes back into the demand, and what's the demand history, so you can pull a lot of things in on that. And that's one of the things we're looking for, as an application for artificial intelligence, it's to help make these decisions, which are of course going to affect the execution later on. And thereby the the efficiency of the operation.

Tom Raftery: 13:54

And you'd obviously need a lot of data to feed those algorithms. And it would be unique to each individual warehouse, I'd have to suspect.

Richard Kirker: 14:02

Yeah, and that's why warehouse management as a solution is less a cookie cutter than other applications because every warehouse is physically different by necessity, even if they're handling the same product. And it's not generally a centrally run process like purchasing or transportation. And so, every warehouse has some unique things even with one company you know, you could have fresh product in a warehouse frozen and ambient, you know, in cool temperatures and knows, you know, just by nature are quite different. So, there is a lot of uniqueness to each physical facility, which means the software running then has to be not only adaptable, but as to be customizable for for those requirements.

Tom Raftery: 14:45

Okay. And demand patterns shift as well as we saw with the surge in demand for toilet roll as well as so historical data won't always predict what's going to happen next.

Richard Kirker: 14:57

Absolutely. And that's why you know, you One of the things we talked about determining how to, you know, store product, it's, it's when we say demand data, it's not only historical data, it could be forecast data. But, you know, the forecast data in disruption, of course, doesn't work out that that's where, you know, doesn't always work out. But that's where also, you know, things like machine learning or AI can help, you know, in our planning tools, which we can feed as demand data into the warehouse.

Tom Raftery: 15:27

Okay, super. Any sustainability wins in this in this area?

Richard Kirker: 15:33

Yes, absolutely. I mean, you know, warehouse management software is is typically been, you know, looking at efficiency, which we can save saving time, you know, getting things done as quickly as easily as possible. But we also have some tools, you know, where we have algorithms algorithm is particularly focused on, for example, minimizing the empty travel distance of forklifts, vehicles, you know, within the warehouse, let's say resources. And so we would look at, you know, the work to be done the resources available, and then divvied up between them, so that we that so that they travel empty as little as possible. And so that not only, of course, is they're consuming energy when they're driving. And if they're not carrying anything, you know, it's it's rather less productive than when they are carrying something. So that has a sustainability component. And what we're showing with is doing that by focus on focusing on minimizing empty travel, we're actually able to do the same amount of work with less resources or, or do more work with the same amount of resources. Okay,

Tom Raftery: 16:37

super. We're coming towards the end of the podcast. Now, Richard, is there any question I have not asked that you wish I had, or any aspect of this that we've not discussed that you think it's important for people to be aware of?

Richard Kirker: 16:51

No, I think we've covered everything. I just think when it's important, as you mentioned, we talked about supply chain disruption is that supply chains are complex. And every piece in it is focused on what we can do and what's necessary to deal with the disruptions. And I would say flexibility is is something that everyone is looking at whether it's you know, where are you manufacturing or are you dependent, you know, on a single link anywhere, but also in the warehouses, which need to think about how they can react to unexpected trends quickly.

Tom Raftery: 17:27

Nice. Okay, super. Richard, if people want to know more about yourself, or about warehousing, or any of the topics we discussed today, where would you have me direct them?

Richard Kirker: 17:38

Yes, you can find me on LinkedIn. And I repost and post things going on and in the space and also for SAP extended warehouse management product. You can find it on sap.com slash ew M. And we also have a very active ew m community, which I will pass you the link to where you can see what's going on.

Tom Raftery: 18:01

Great. I'll include that in the show notes and people will have access to it then. Richard, that's been really interesting. Thanks a million for coming on the podcast today.

Richard Kirker: 18:08

Thank you, Tom. Nice talking to you.

Tom Raftery: 18:10

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, head on over to sap.com slash digital supply chain or, or simply drop me an email to Tom raftery@sap.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice 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 the show. Thanks. Catch you all next time.