The crucial role of technology for logistics competitiveness

Mexico is in a strategic position as a key destination for nearshoring , the now much discussed practice of moving the production and services of companies from geographically distant locations to nearby countries. 

This approach offers numerous competitive advantages, and to take advantage of it, the adoption of technology becomes vital in the logistics sector. Solutions such as warehouse management systems (WMS), track and trace systems, and data analysis tools allow companies to optimize their internal logistics processes. 

These technologies improve operational efficiency, inventory accuracy, demand planning, transportation management, and delivery. Companies can perform real-time tracking of inventories, automation of storage and picking tasks, and systems for greater visibility of the supply chain. This translates into a series of benefits such as efficiency, cost reduction and customer satisfaction.

The new developments in logistics-oriented technology offer several dimensions for business, shares Sergio Almar, partner of the Minsait Consulting firm, in an interview. “ The first thing is that it gives visibility in real time of what happens in operations and logistics processes. Behind the scenes, they support automation efforts, taking over repetitive tasks and taking over low-value streams, thereby reducing costs. And finally, they strengthen end-to-end planning, in addition to allowing demand scenarios to be simulated, demand response scenarios and anticipating possible bottlenecks ”.

LOGISTICS GADGETS
There are many hardware and software technologies involved in logistics operations, and they can be grouped in different ways. For example, data capture devices, ranging from barcode scanners, radio frequency (RFID) readers, handheld terminals, cameras, and sensors.

On the other hand, there are the communication devices, which already include smartphones, radios and other portable equipment that ensure that the personnel involved in the logistics systems can keep updated in real time of all the details of a process, something that improves the decision making, especially if what is exchanged is critical information.

On the other hand, there are transportation equipment, which has to do with vehicles, from fleets of small cars or motorcycles, to maritime, land, and air transportation. Technology in transportation equipment, for example, is currently equipped with satellite tracking systems (GPS) and temperature and humidity sensors that guarantee the integrity of the products while being transported.

On the other hand, there is storage, such as racking, containers, and equipment for moving cargo and handling materials. In this area there is a great diversity of technologies oriented to the organization and management of stored products, which ensures maximum inventory control and very agile order preparation.

EVERYTHING IN AUTOMATIC 
Technologies related to process automation and the use of robotics are increasingly common in logistics operations. They are used for various tasks, such as picking and packing , for which advanced clamping systems, computer-assisted vision, and various configurations with robotic arms are used to identify and pick products from shelves or containers, which are then placed in boxes for storage. transportation.

They are also used for truck loading and unloading, heavy load handling, internal transport with AGVs and collaborative robots, for labeling and sorting applications, and also for some inspection tasks.

"In Mexico it is not yet so noticeable, but the trend of using robots for exclusive logistics tasks is already clear," says Lucas Diaz, general manager in Mexico of the Dutch firm AWL . “ It is very common in the automotive sector, but the use of robots is beginning to spread to other industries. In the case of logistics, this is happening because electronic commerce demands more precision and speed in deliveries, as well as flexibility and efficiency in the process of movement of goods ”.

For the company that integrates automation solutions, the demand for its solutions in logistics areas is becoming more common for tasks that require handling heavy loads more quickly and accurately. “It is sought that the operators no longer carry out monotonous and repetitive tasks. It is also very clear that there are cost benefits and allow continuous processes to be carried out, without interruptions”, explains Díaz.

Many of these integrations are highly complex, with combinations of material movement elements, PLC equipment, sensors, actuators, variable speed drives, monitoring systems, and robots for heavy loads and collaborative robots; many times all in combination. That is why it is important to have the support of expert integrators such as the case of the Dutch firm, but once the production cells are configured, the benefits begin to be noticed. “ There is great pressure on logistics processes and they are increasingly demanding greater efficiency and productivity, so we are expecting significant growth in this area in companies established in Mexico ”, warns the automation expert.

DIGITAL INTELLIGENCE 
When it comes to software, there are also countless systems designed exclusively to facilitate logistics. Warehouse management solutions (WMS) are the most common , with features to improve inventory control, receipt and dispatch of merchandise, product location, and order management. 

In the same way, you have computer systems to control the transport of personnel and material, supply chain management systems (SCM), enterprise resource management (ERP) and systems used for traceability from electronic exchange software. ( EDI), just to name a few. 

Also, from the Minsait firm , Joaquín Estrada, operations and strategy manager, comments that in Mexico, despite there still being certain delays in the adoption of state-of-the-art technology for logistics, there is currently a tendency to invest in traceability systems. , planning and risk management. 

"I see more and more companies in Mexico that intend to implement and use systems that help them generate models with external variables that allow them to better measure demand," says Estrada. He assures with the simulation models, improvements are being achieved, not only in the efficiency and profitability of inventories, but also in the reduction of bottlenecks in both production and logistics. 

Advanced analytics models and even the incorporation of artificial intelligence algorithms are becoming more and more common. “Although it is impossible for companies to have 100% certainty of demand ”, many companies are beginning to incorporate models that allow them to work with uncertainty but reduce it to the maximum; with systems that allow them to make more accurate predictions seeking to be more agile on a day-to-day basis.

“Uncertainty is here to stay, first the pandemic, then the semiconductor shortage, now the war between Russia and Ukraine, and then something else will come.”

Therefore, analytics has become a fundamental tool to generate possible future scenarios and increase the probability of success and, in parallel, to detect in real time what is happening with demand or what is happening in production.

The digitization of logistics in Mexico becomes essential in the context of nearshoring to improve operational efficiency, have visibility of the supply chain, reduce costs and adapt to the new requirements of proximity and agility, all of these are essential requirements to be more competitive and win the projects that are yet to come.

The KPIs of technology in logistics

They may vary depending on the type of industry or nature of each company, but among the most important key indicators derived from the use of technology in logistics operations we can identify the following:

Inventory precision: The new systems allow the product in the warehouse to be measured with great accuracy according to the coincidences in the system records and the physical products, which translates into better management, reduction of losses, elimination of errors and greater operational efficiency.

Order fulfillment level:  By raising this indicator, greater efficiency is obtained in logistics processes, which has a positive impact on customer satisfaction and retention.

Order cycle time: The appropriate use of technology allows measuring the time that elapses from when an order is received until it is completed and delivered to the customer. This improves the agility and responsiveness of the supply chain, which becomes a clear competitive advantage.

Delivery time:  An adequate traceability system allows the time elapsed from the moment an order is placed until it is delivered to the customer to be measured with great precision. A faster delivery time indicates greater efficiency in the supply chain generates customer loyalty.

Shipping Cost: Efficient technology can help optimize routes, reduce transportation costs, and minimize billing errors, which in turn can lead to lower shipping costs.

Staff productivity: New technologies are aimed at improving the precision and speed of tasks performed by staff, this includes automation systems and the use of robots, generating greater productivity and efficiency in general.

Customer satisfaction level: The successful technological implementation in logistics processes helps improve the quality of service with indicators such as punctual delivery and accuracy of orders. About saying what this represents in customer satisfaction.

Logistics operators bet on technology

By: Dinorah Becerril

Estafeta  has developed different strategies based on digitization and automation with the aim of streamlining and streamlining its service and operation processes.

For example, according to José Antonio de los Ríos Granja, Estafeta 's infrastructure planning manager , the digitization strategy is focused on providing customer service, what is sought is to have robots that attend to customer requests for information in the moment they require it.

These robots can provide information on where the shipment is located and also provide solutions to any problem, in addition to generating reports.

“Today we have good tools that allow us to serve our customers more quickly,” he says.

This omnichannel of Estafeta is attended by a bot, with the support of its external provider, Auronix, with which it has built the communication platform that integrates SMS messages, RCS messages for Android, Apple Business Chat, Messages Business Google, app of the company, chat bot on Facebook and Twitter and the chat on its website.

With this, the client can communicate or get in touch from any device or channel with a service window of 365 days 24x7. And they can consult concepts such as shipping status, quote, location of the branch, the status of the service report, doubts about collections and the price of volume guides.

Estafeta's collection, tracking and pricing functionalities have been connected and integrated into the provider's solution that is fed with the data.

The so-called EstafetaBot is permanently trained in NLP or natural language, which allows it to interact with all types of users and understand their requests.    

SYNCHRONIZED NETWORKS
In automation, De los Ríos Granja assured that it is essential to have synchronized distribution networks and machinery that can process a large amount of cargo in short periods of time.

He explains that " automation allows us a level of production that is not feasible to do manually due to the fact that each package has to be identified and diverted to the correct outlets ."

The human eye has a finite processing and motion reading capacity to read a moving package up to 0.8 meters (m) per second, unlike machinery that reaches up to 2.4 m per second, three times what the eye can do. human, that is, it triples the processing capacity.

Automation as a strategy, Estafeta sees it in large distribution centers where cargo volumes will leave in very short windows of time and that cannot be done through people.

“All the data that is generated through these machines allows you to streamline your processes in the previous mile and in the next mile.”

Estafeta has systems that work with artificial intelligence processes where it learns how it is operating and cargo flows. These help to project and give future trends based on the operation from which it receives daily feedback.

"Artificial intelligence will allow us to carry out complex planning processes in a more agile way and propose efficient solutions," adds De los Ríos Granja, who believes that this is where the industry is headed, along with warehouse management.

“I think that all of us in the industry are working through a data driven philosophy, a lot of information management and with it make the best decisions”.

In 2022, Estafeta opened a new hub located in the Parque Industria O'Donnell, in the state of Querétaro, in which it invested 350 million pesos with the aim of increasing its production capacity in limited hours.

The interviewee considers that “the ship is a complete robot, which thinks and processes based on the algorithms that we have given it. The 350 million that were invested were in the machinery of this robot and this is the first of five stages of automation”.

In this hub, Estafeta has the capacity to handle 18,000 items per hour and uses crossbelt sorters and pusher diverter systems with DWS technology for reading and sizing.

The complex has an extension of 53,000 square meters and maneuver yards, 142 cross dock platforms, fully automated and flexible parcel and courier classification and loading systems for handling e-commerce shipments and maximum guarantees.

He explained that there is an important growth and development plan for the facility in the next 15 years that is based on the company's cargo volume. From its hub in Querétaro, the company has coverage of 61 cities in the country.

At the national level Estafeta has plans for new automated plants under the same concept of large consolidation centers where it can maximize the number of items operated per hour, to ensure that the packages are delivered the next day wherever the user wants.

"We see a possibility in at least two more points in the country and it will depend on how the distribution network and demand are being built."