REPORT: EPS is spearheading backend automation in GCC
When people hear the word automation, in terms of logistics, they understandably think of the self-driving forklifts, automated picking systems and AUVs that have made headlines in recent years, but automation is as much a backend priority as it is on the warehouse floor.
According to a study conducted by Gartner, there will be 26 billion networked devices worldwide by 2020 that will be able to exchange data among themselves in an interoperable manner. This entails major challenges for processing the enormous quantities of data in the cloud.
“Automation doesn’t only apply to hardware. If you look at trends like Industry 4.0, this is the future of business and it will impact logistics,” says Dr. Makrem Kadachi, general manager, Middle East at Ehrhardt + Partner Solutions. “All the different systems and solutions in a company need to be able to communicate instantly and seamlessly with each other.”
“Communications is the key word here, this is the basis of automation,” he adds. “Everyone is looking for one solution that will cover an entire process of delivery, but this will never exist. Full automation needs dedicated solutions for each part of the business; WMS, fleet telematics, procurement, etc. This enables higher efficiency because everyone can focus entirely on their own responsibilities, while they are communicating the right information between the different areas of the business.”
Makrem says that many of EPS’ customers are already doing this in the Middle East. “They use SAP, Oracle, Microsoft Dynamics, and other software for different tasks like purchasing and accounting and using our EPS software for their warehouse operations. Jumbo, Lulu’s, Marina Homes, are doing this, with each area of the business communicating autonomously so that each employee is focused on their tasks only.”
Makrem says that this is important for Middle East logistics companies especially due to the importheavy nature of the consumer market in the GCC. “If you look at the nature of the logistics industry out here, the stock being kept in warehouses is huge, especially in the FMCG sector, which is one of the largest,” he says.
“With the proper tools and proper solutions this stock level could be highly optimised. Expiry dates in food logistics and pharma for example, to have full and proper control would reduce the stock being stored relative to turnover, which would lower costs and increase profit.”
“Automation out here will always be held back by the very low cost of labour compared to other markets, so people talk about ROI, but this is the wrong conversation, we need to talk about the quality of delivery, the cost of returns, in essence the total cost of ownership of the inefficient system currently being used by a warehouse operator,” he adds.
“Retail dominates revenues in the UAE economy and the core of that is the warehouse and the stock, so any CEO or chairman needs to be aware that having full control of inventory will increase efficiency and immediately reduce costs.”