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SUPPLY CHAIN
SOLUTIONS
Learn How Automation and Visualization is
Changing the Landscape for Distribution
Centers
SUPPLY CHAIN SOLUTIONS
The Evolving Distribution
Center
The definition of the “distribution center” is unavoidably
changing. The rise of direct-to-consumer shipping,
spurred by e-commerce, has forced many distribution
center managers to rethink their operations. Industry
4.0—the integration of the digital and the physical
realms—in the warehouse, indeed, across the supply
chain, is impacting not only the distribution center, but
also the manufacturing floor, the building it’s housed
in, the fleet that carries its goods, and even the retail
outlets that make the goods available to consumers.
We are on the cusp of an exciting evolution of the
supply chain, a segment that outsiders often find
uninteresting.
A July, 2016, paper published by researchers at
Helmut-Schmidt-University, Institute of Production
Engineering in Germany, (Industry 4.0 Implies Lean
Manufacturing: Research Activities in Industry 4.0
Function as Enablers for Lean Manufacturing) found
that Industry 4.0, a.k.a. the Internet of Things, is an
enabler for Lean Manufacturing, including just-in-time
delivery by suppliers. Clearly, the distribution center is
central here. No longer simply a warehouse stockpiling
goods, the distribution center is a fast-paced business
operations hub, a strategic facility that can provide
competitive advantage. Advanced technology is
providing shorter lead times, reduced labor costs, and
higher throughput.
In a world of omni-channel retailing, the modern
distribution center is built with a view towards speed,
and enhancing the customer experience, whether the
purchased goods are bought online or in a brick-andmortar store. (Contrary to popular belief, e-commerce
is not killing in-real-life shopping. Rather, the Internet
of Things is enabling for physical retail stores the sort
of consumer tracking and targeting that was once the
exclusive purview of e-commerce and online
marketing.)
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Costs can now be better managed too—smart facility
management to reduce energy costs, automation to
lower labor costs, sensors and predictive analytics to
minimize downtime and speed repairs to equipment.
Higher outputs and lower costs are now within
distribution center managers’ grasp.
We are in the midst of the fourth industrial revolution,
the integration of cyber-intelligence and physical plant.
The deployment of advanced, inter-connected
technologies in the distribution center is a game
changer.
The N3N Internet of Things visualization platform can
help pave the way for these evolving distribution
centers, providing a consolidated view of efficient,
automated, systems that adapt to their environment
and provide new process visibility to the people
overseeing them.
N3N provides an advanced platform that helps
distribution center managers establish best practices
while reducing time and lowering costs.
Anchor the Internet of Things
in the Distribution Center
The distribution center is a key element in the supply
chain. Anchoring Internet of Things improvements
there makes sense.
The 2017 Third-Party Logistics Study, the twenty-first
in a series, conducted by Capgemini Consulting and
Penn State University reported that 60% of shippers,
asked about the role of big data, ranked improving
integration across the supply chain as their most
important issue. More than two-thirds of 3PL
customers use them for warehousing, the number one
use case after domestic transportation.
(Showing a slight disconnect, the supply chain
integration issue came in third for 3PL/4PL survey
respondents, at 53%. However, we believe their
customers will tug on them to catch up.)
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SUPPLY CHAIN SOLUTIONS
Integrated processes make for a smoother and more
cost-effective supply chain. The logistics study report
quotes Tom McKenna, senior vice president of
engineering and technology for Penske Logistics, as
saying, “If I have greater detail on inbound loads,
either the arrival times or more specifically the
products and the orders that are on that load, I can
improve my processes to handle both the warehousing
and transportation activities related to that shipment.”
And the benefits extend beyond logistics. Long thought
to be simply a linear exercise, building value in the
supply chain—now enabled with Industry 4.0—can
provide a feedback loop to other parts of the business,
including product engineering and research &
development.
For example, automated data collection from the
distribution center or the fleet can inform product
design, leading to packaging that fits better in
containers and is more cost effective to ship.
(Shipping costs are a function of weight and volume.
Automation further saves labor costs on this
improvement process.)
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Data from the supply chain can aid in demand
planning to minimize product unavailability events.
Collection of data even further downstream, from the
retail nexus, whether e-commerce or brick-and-mortar,
can send feedback directly to product and research &
development teams, speeding innovation on new
products or tweaks to existing products, a source for
new or incremental revenue.
Thus, business leaders may consider the Internet of
Things imperative through the lens of business
operations or business growth.
As applied to operations, the IoT is about reducing
delays, improving response time and maximizing asset
utilization
For growth activities, fed by data from the supply chain
but largely executed upon outside of the distribution
center, the IoT enables new product and service
offerings, aftermarket revenue streams, and deeper
customer understanding.
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SUPPLY CHAIN SOLUTIONS
KeyObjective
Improveproductivity
BUSINESS
OPERATIONS
Reducerisk
Incrementalrevenue
TransformationalPlays
•
Removingorreducingdelaysandimproving
responsetime
•
Maximizingassetutilizationandminimizing
downtime
•
Drivingfurtherdirectandindirectlabor
efficiency
•
Automatingactivities
•
•
•
•
BUSINESSGROWTH
Newrevenue
Findingsourcesofgrowthforthecorebusiness
Growingaftermarketrevenuestreams
Deepeningcustomerunderstandingand
insights
Strengtheningcustomerintegrationand
channels
•
•
Creatingnewproductsandserviceofferings
Expandinginternationallyandinemerging
markets
•
IdentifyingattractiveM&Aopportunities
Source:Deloitte,Inc.,Industry4.0anddistributioncenters,transformingdistributionoperationsthroughinnovation
With the distribution center proper contributing
primarily to improvements in business operations, let’s
consider more specifically key areas ripe for Industry
4.0 enablement.
Over 90% of those surveyed said they saw a lot, or
some, value in the opportunity for impact from
deploying the Internet of Things to address inventory
management.
Enterprise Wide Inventory
Management
Tracking inventory across the enterprise—from the
manufacturing floor, through the distribution center,
across the fleet and on store shelves—is clearly a
supply chain issue upon which the Internet of Things
can be brought to bear.
A Retail Systems Research benchmark report, The
Internet of Things in Retail: Getting Beyond the Hype,
found that inventory management across the
enterprise was the top issue for respondents, with 91%
saying it was very important, as related to the Internet
of Things, and 9% saying it was somewhat important.
(In-store customer interaction via marketing and
promotions was a close second.)
Inventory accuracy was another top issue. Almost half
of retailers surveyed ranked it highest among the top
three operational challenges they believe the Internet
of Things is able to address.
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Multi-channel Order Fulfillment
Virtually every distribution center nowadays must be
able to ship wholesale to retail locations and direct to
consumers. Order size and transport method are
different for each. Bulk shipments for brick-and-mortar
stores travel by truck; some retailers are exploring the
use of lightweight drones for home shipments, adding
yet another layer of complexity to direct-to-consumer
shipping.
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SUPPLY CHAIN SOLUTIONS
Referring again to the Retail Systems Research
benchmark report, roughly one-third of retailers
surveyed said speed of fulfillment to meet consumer
demand was a top operational challenge they saw
potential for the Internet of Things to address.
Multi-source Order Complexity
Some brands operate multiple distribution centers, to
cope with the different needs of retail store
replenishment, consumer e-commerce purchases, and
wholesale delivery. Consolidating these operations to
a single site solves some problems, but creates
others. How do systems designed for retail store
fulfillment co-exist under the same roof with systems
for consumer delivery? How to aggregate data from
automated and voice picking devices, to evaluate
efficiency?
This is where a business operations solution that
consolidates views and data feeds from disparate,
vertically-focused, solutions can shine. Ideally it would
also integrate smart facility management functions like
CCTV surveillance, energy control and alarm
monitoring.
A Changing Workforce
Research on the distribution center workforce presents
conflicting views. On the one hand, “warehouse” and
supply chain jobs aren’t particularly attractive to
younger generations of workers, who are critical to the
replacement of workers aging-out through retirement.
Distribution centers in low-density population areas
also face a much smaller talent pool to draw on.
On the other hand, automation is eliminating some
menial jobs, while creating a demand for highly trained
professionals such as engineers, operations analysts,
data analysts and maintenance employees.
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Peak Season Velocity
Seasonal demand spikes and retail price wars can
stress the supply chain in a variety of ways, from
satisfying consumer demands for immediate
availability or delivery, to managing short-term surges
of labor demand. Meeting seasonal demand requires
flexibility and scalability.
The seasonal challenges faced by distribution centers
are no different than those discussed here—inventory
management, order complexity and fulfillment, staffing.
They just occur on a compressed schedule and at
higher volumes. Deploying Industry 4.0 technologies
for day-to-day operations better enables the
distribution center to respond to temporary surges in
demand.
N3N Internet of Things
Visualization Platform
There is no question that the Internet of Things will
positively impact business operations, maximizing
productivity and reducing risk. Enterprise-wide
inventory management, order fulfillment, processing
handling, workforce management and seasonal
demand response all stand to benefit.
Increasingly, equipment and machines within the
distribution centers, from paddle sorters to forklifts, are
cyber-connected, and generating a plethora of data.
That data, of course, must be stored, secured,
analyzed and visualized.
The N3N Internet of Things visualization platform
coalesces the analyses and visualization of distribution
center data into a single-pane-of-glass, multi-layered,
view with real-time sharing to stakeholders across the
enterprise, thanks to a cloud computing-based
architecture.
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SUPPLY CHAIN SOLUTIONS
Distribution centers are finally able to:
• Fully manage and account for inventory on a single
screen
• Streamline picking processes for maximum
efficiency
• Precisely record the movement of product
• Lower their labor and facility management costs
• Improve lead time planning
• Automatically feed valuable information back to
other parts of the business
The greater exchange and consolidation of data from
the increasing number of smart devices in the
distribution center helps supply chain stakeholders
better allocate resources, and avoid or minimize
problems. The N3N solution ingests real-time data
streams from those smart devices, and presents it in a
single view that lets the user pan and zoom from the
abstract to the physical, and back again. Further, the
consolidated operational data can be used to fuel
business growth activities.
How to Move Forward
The Industry 4.0 opportunity for distribution centers
may be daunting, but it is significant. Supply chain
executives can take a practical approach, however, to
moving forward.
Scope the depth of inventory management
problems. How bad is it? How great are the losses?
Where is shrinkage happening? Or at least, what are
the suspected sources? How effective have your loss
prevention programs been? What fixes have been
attempted in the past? Does your investigative team
have sufficient tools at their disposal?
Assess current needs and practices in the
distribution center. Are there labor-starved manual
processes that are ripe for automation?
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Which automation solutions are generating data that
goes un-analyzed? Which processes introduce the
greatest time lags?
Assess the distribution center’s labor force. What
is the median age and tenure of workers? Who has the
most institutional knowledge? Which workers have an
appetite for retraining and upskilling? How deep is the
local talent pool, for both current jobs and Industry 4.0
jobs? How likely is the local cost-of-living to draw
younger, highly educated, professionals to the area?
Match the labor and best practices needs against the
Industry 4.0 solution market. Which processes are
most ripe for automation and for which there is a
solution available of the highest caliber? How do labor
force skill sets match against the technology solutions
that best fit improvement needs in the short term? And
the long term?
Evaluate competitors and suppliers. Who
represents the greatest strategic threat from adopting
Industry 4.0 capabilities at a faster pace? Which of
your suppliers are best able to help with a response?
With a pre-emptive strike? Where are the quickest,
most cost-effective, wins?
Plan for data management and security. The ability
to collect, secure and visualize the oncoming data is
key to distribution center success. The data itself is
every bit of a valuable as any piece of equipment on
the floor and needs to be protected.
Be agile. The rapid pace of change is going to
continue over the next decade. Flexibility and openmindedness are the keys to success.
The anchor of the Industry 4.0 supply chain is the
distribution center. By integrating the digital and the
physical in the distribution center, all stakeholders can
enjoy a holistic view of the supply chain. Product
becomes traceable, inventory counts more accurate
and fulfillment, if not simplified, is wrestled into
submission.
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SOLUTION OVERVIEW
MONITORING/DETECTION
WITH N3N
VISUALIZATION
N3N Products and Solutions
WIZEYE
Locate and Solve
Problems in Real-Time
This solution provides an easy way to monitor all of your business
operations, applications, infrastructure and business services from a
single view. Gone are the day’s of hunting for a needle in a haystack. With
WIZEYE, your team is able to easily locate, analyze and solve problems in
minutes. Monitoring, detecting and predicting issues is simple, as we
consolidate all of your systems together in a Single-Pane-of-Glass.
INNOWATCH
Monitor All Your Systems
and Applications
Big Data Analytics
and Reporting
A complete solution for monitoring all your data sources, facilities,
business operations and monitoring systems from a single station.
Maps, video feeds, computer screens and data are integrated into one
display for convenient monitoring, detection and issue notification.
INNOWATCH offers a true command and control environment which includes
functions like PTZ control, remote PC control, external device control and
alarm response, all from a Single-Pane-of-Glass.
Customers Run N3N
Brands across the globe run N3N for business operations monitoring,
APM monitoring, data center monitoring, security monitoring, facility
monitoring and a whole lot more.
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ABOUT N3N
ABOUT N3N
The company is headquartered in
Seoul, South Korea with North American
operations located in San Jose, CA. N3N
has developed and markets a
comprehensive range of data
visualization solutions for the public
and enterprise sectors.
N3N’s VISUALIZATION
Our solutions provide highly
scalable image processing while
integrating IoT, Big Data, videos
and maps into a Single-Pane-ofGlass. Today, N3N’s solutions are
deployed across a wide range of
IoT sectors including:
Manufacturing, Smart Cities,
Buildings, Traffic, Security,
High Tech, Retail, Healthcare,
Utilities and more.
Rev.42703
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