Interview: Markus Schmidt of Swisslog Logistics Automation – Americas
In our continuing series of discussions with top supply-chain company executives, Markus Schmidt discusses automation’s role in the wake of the Covid-19 pandemic.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Markus Schmidt is a Swisslog veteran and has been president of the Americas region since 2005, which includes Swisslog operations in North America and Latin America. During his tenure, the organization has grown to more than 400 people with revenues in excess of $250 million. He is also a member of the board of the Switzerland-based automation and material handling company as well as a member of the top management circle of Swisslog’s parent company, Kuka. Prior to his arrival in the U.S., Schmidt was managing director of Swisslog in the U.K.
As president of the Americas region, Schmidt implemented Swisslog’s market focus strategy in establishing consumer-goods and e-commerce/retail business units in these markets. He also spearheaded the acquisition of systems integrator Forte in 2015 and pallet-shuttle system manufacturer Power Automation Systems (PAS) in 2016.
Schmidt, who earned his degree in production manufacturing at the University of Cologne in Germany, has also been actively involved with MHI, serving as a member of its Roundtable Advisory Committee for eight years. He recently spoke with DC Velocity}Editorial Director David Maloney.
Q: How do you view the current state of the material handling market?
A: Just a few weeks ago, I would have said that the market for material handling equipment and software was thriving and highly competitive. We are certainly seeing the increased adoption of goods-to-person automation systems for cube storage like AutoStore, mobile robotics solutions like CarryPick, and high-speed case-shuttle solutions like Cyclone that were considered risky to adopt six to 10 years ago but are now seen as proven, reliable technologies and essentially mainstream.
The trend toward the rapid adoption of flexible, robotic, and data-driven solutions is accelerating. We also see this clearly in the entry of venture capital into the market to fund numerous startups and invest in existing companies.
There is a discernible movement away from the more rigid bolted-down systems that are based on miles of conveyor and sortation equipment. Although those kinds of systems still have their place in the market, they really represent an era of mechanization more than they do automation.
Particularly with the recent explosion in e-commerce, companies are looking for solutions that afford them greater flexibility, take up less space, and have the ability to adapt to rapidly changing requirements in the market. They want solutions with more embedded intelligence that can optimize based on the data that is being continuously collected by sensors and software.
While I still believe in these megatrends, this was also before the novel coronavirus that caused the Covid-19 pandemic had made its way to the USA. In just a few short weeks, things have rapidly changed. Suddenly, the supply chain is at the center of every conversation, and now the entire world is waiting to see how our economy recovers. Consumers are relying more than ever on e-commerce and e-grocery, resulting in increased adoption and shopping preferences that may never return to pre-pandemic levels.
While some industries may be stunted in the short term by this pandemic, one thing is certain: All companies will be changed by this experience. After we make our way through this difficult time, I expect corporate behaviors to change, and Swisslog is ready and looking forward to continuing to innovate and automate their supply chains.
Most importantly, I am proud of our Swisslog team that has been “essential” for our medical and consumer-goods customers working to install goods-to-person systems that are set to go-live in the next months, as well as our systems operations teams working onsite running our customers’ warehouses and our support teams for keeping things running smoothly.
Q: During your time as president of the Americas for Swisslog, the company’s presence here has grown tremendously. What insight can you share from that growth and expansion?
A: When Swisslog first entered the U.S. market, we were known as something of a boutique for our pallet-handling technologies like our Vectura pallet-stacker cranes for large retail customers. Pallet-stacker cranes and pallet-shuttle systems are still core to our DNA, and we continue to build on our very successful base of operations in the U.S. But the real game-changer for us was our entry into the e-commerce space with goods-to-person solutions like AutoStore, CarryPick, and Cyclone. We are the world’s largest integrator of AutoStore, but we also now offer an array of other types of solutions. Our CarryPick mobile robotic solution is gaining in popularity as is our Cyclone case-shuttle system.
We’re also now actively integrating robotic single-item picking with our goods-to-person systems to help companies solve their labor challenges. Our SynQ warehouse software is a comprehensive solution that orchestrates equipment, processes, and people—really the brains behind every solution we implement. These are the factors that have really driven our growth in recent years.
Also, we maintain a very customer-centric organization with a robust customer support operation. In recent years, we’ve focused on developing training programs that are critical to supporting our growth and expansion. To state the obvious, Swisslog only exists because of our customers. And with each expansion, we have added passionate and dedicated employees.
You could say that our customer-centricity is what makes us stand apart, but we’ve also worked hard to demonstrate that we are taking care of our greatest asset, our people. Successful talent recruitment, training, individual support, and leadership development embedded in a dynamic culture of innovation with mutual respect—that’s what has really enabled our growth in recent years.
Q: What are the advantages of working with a company like Swisslog that offers a wide range of warehouse solutions?
A: As a global company, we can bring our expertise from different regions of the world to our customers here in the U.S. We work in a very collaborative environment and see ourselves as one Swisslog, no matter whether we’re here or in Europe or the Asia Pacific. We share key learnings from the work we’re doing all over the world to automate distribution operations. Although we are not all things to all customers, we do offer a wide range of technologies that can be tailored to the specific requirements of each customer in each region.
We have organized our company around specific industry segments, so our people have developed deep expertise in those industries. The needs of a refrigerated warehouse handling pallets are quite different from an e-commerce operation, so we bring the correct resources to bear on every opportunity. While we are global and provide such benefits, we “act local” and have a sizable organization in the Americas to be close to our customers, not only for support, but also for software and controls deployments and all related project services.
Q: What do you feel the next few years will hold for automation applications within distribution centers?
A: In the coming years, we expect to see the increased adoption of flexible and scalable solutions like our CarryPick mobile robotic storage system, because the system can easily and quickly scale up or down as needed without disrupting operations. At the same time, our customers increasingly see the hardware or equipment as something of a commodity, so what will really differentiate us is our expertise and our software. The more intelligence that is embedded in a system, the more easily it can optimize itself to changing demand without intervention.
Whether we call it “the Industrial Internet of Things” or “Industry 4.0,” we are definitely headed toward a future where the software and algorithms behind the system are what is most important. Needless to say, e-commerce automation will continue to grow and, in many cases, will move away from large distribution facilities toward smaller, more agile fulfillment centers that are closer to the customer.
Q: You have been involved with MHI and other groups for a number of years. What do you see as the value of working within industry associations?
A: I was elected to be on MHI’s Roundtable Advisory Committee for two periods of four years each from 2010 to 2018. While the association is not playing an active role with respect to the supplier/customer relationships, it often provides platforms for those parties to find each other, like the huge industry trade shows that MHI runs. Also, it should not be forgotten that best-practice standards and regulations are driven by associations, and that these groups also provide general education opportunities for employees who want to enter our industry.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.