Global Logistics Facility Tech Weekly

This week I chose stories about large third-party logistics providers deciding to own the software that ties machines together.

Kenco is an American third-party logistics provider running around 140 logistics facilities across the United States. It is tripling the automation test facility at its Chattanooga, Tennessee headquarters to roughly 2,790 square metres, opening on 10 September, with more than 30 types of robots on a single floor. The reason for the expansion is that evaluating equipment one machine at a time tells you nothing about what happens once the machines are combined. The first workflow on show links three steps into one: a robot unloads pallets from a trailer, a second moves them deeper into the building, and a third takes the cases off the pallet. Gray Matter software issues the instructions. The facility is run on a deliberately vendor-neutral basis. The work of comparing and verifying what different manufacturers propose is now being done in-house, by the buyer.

In South Korea, CJ Logistics has put two humanoid robots into a live packing process. It buys the hardware from Robotis and the robotic hands from Aidin Robotics. The control software — what it calls a robot foundation model (RFM) — it develops itself, using its own logistics work data. GXO, the world’s largest pure-play contract logistics provider, split its technology organisation in two on 3 September, giving the job of keeping enterprise systems running and the job of putting AI and robotics onto the floor to different executives.

What the three have in common is that none of it is about which machines to buy. Each has decided to hold, as an in-house capability rather than something to outsource, the question of how machines connect to other machines and to the people working alongside them. The buyers have dropped the assumption that manufacturers will handle integration for them — that is how I read it.

There is enough evidence now to justify that view. Nomagic of Poland has made the shoebox — awkward precisely because the lid merely rests on the base — handleable across about 98 per cent of SKUs at up to 450 boxes an hour. Individual hard problems get solved, one at a time. Dexory of the United Kingdom, meanwhile, argues that what a WMS or an ERP holds is a record of transactions, not what is happening on the floor right now. A pallet is moved after it has been scanned; a location is only partly occupied. The more machines there are, the wider the gap between the record and the floor becomes. Equipment can be bought. The state of the operation that the equipment depends on does not come with it.

From here the picture is not comfortable for Japanese operators. Kenco, CJ Logistics and GXO all have the scale to build this themselves. Few companies in Japan do. If that is so, what will separate them is whether they can buy, as a product, the software that tells the machines what order to work in and where to send things. GROUND built GWES with that instruction-issuing function at the centre of the product, rather than joining third-party packages together after the fact. The more varied the items, and the more workflows running through the same building, the more that difference shows — which describes most logistics facilities in Japan.