With margins under pressure and labour in short supply, forward thinking logistics service providers are taking a new, radical approach to winning business using flexible automation.
There is an emerging sea change in the traditional 3PL–client relationship around automation. Whereas a 3PL would normally win a contract first and then possibly install automation if it was thought appropriate for efficient and profitable execution, now some 3PLs are looking to invest in automation first and then pitch their solutions to potential clients.
A typical contract with a client is for around two or three years, and now clients tend to be looking for shorter rather than longer commitments. The risk for the 3PL has always been that if the automation is tailored to the needs of a specific client, and that client doesn’t renew, the 3PL may not achieve as fast an RoI as expected.
Now, however, highly flexible automation is changing the dynamics of the warehouse and this is reshaping how 3PLs can present their service offerings. Automated fit-to-size packaging systems not only offer the efficiencies of high volume throughput, low labour content, improved material use and better transport efficiency that 3PLs and their clients demand, but critically, they also provide the essential flexibility that will future-proof the investment.
Looking at efficiencies, put simply, advanced right-sized packaging systems, such as Sparck Technologies’ CVP Everest and Impack machines, 3D scan the item or items, size and shape the box, and seal and label each package at speeds of up to 1,100 packages per hour. Typically replacing anywhere up to 20 manual packing stations. Labour which, if you are lucky enough to have, can be redeployed to more rewarding and value-adding tasks.
Both solutions can have up to three card mills feeding continuous fanfold card of different widths (60cm, 80cm, 100cm for example), which ensures optimal use of card ‘on the fly’, reducing waste and minimising cost. Or in the case of a 3PL, the three card mills could hold individually branded card feeds allowing multiple brands (clients) to be packed by a single machine.
Over the last couple of years Sparck Technologies has analysed some 10 million packages across sectors, so we can reasonably claim that our figures are robust. On average box volumes are reduced by up to 50% or more (83% has been recorded) with benefits in more efficient use of costly transport and greater consumer satisfaction – not least through the elimination of void fill.
So we can demonstrate serious cost-saving efficiencies – what about flexibility? These packaging systems are ‘flexible’ in a number of senses. Firstly they can pack orders for several clients in random sequence (identified by bar code). This can be achieved either with the preprinted branded fanfold card feed, or we can also offer in-line mono or CYMK printing of neutral card on three sides.
But we can also offer flexibility in a different sense. Sparck Technologies’ packaging systems can be acquired on lease rather than outright purchase. The 3PL can minimise risk from a downturn – or, more happily, lease extra lines if business is booming. This low-risk approach is being adopted by a growing number of leading 3PLs in Germany, The Netherlands and the UK – high profile names, such as CEVA Logistics, Van Eupen and Global Freight Management.
Creative thinking around automation is actively helping 3PLs win new business, and just as importantly, is playing an essential role in delivering enhanced value to existing clients, helping service providers to retain customers, protect margin and extend client contracts.
More information on Sparck Technologies’s advanced right-size packaging systems at sparcktechnologies.com