Week 5 summary

SUMEER CHAKUU: Hello dear learners. Welcome to week five round-up video. My name is Sumeer, and I’m your mentor for this week. And I’m here with, Gwynne, the lead educator. Hi Gwynne. How are you doing today?

GWYNNE RICHARDS: Yeah, I’m fine, thank you Sumeer. And you?

SUMEER CHAKUU: Thank you. I’m also doing pretty fine. So Gwynne, for this week, our total module was divided into four main blocks. The first one was giving a general overview of logistics. And then we moved on to different modes of transportation, career in logistics, what are the challenges facing companies today. In addition to that, we also had a brief, or I would say, in detailed introduction to warehousing, technologies what we use in warehousing, and the role of automation in warehousing. Based on this content and this discussion, I have some questions so that we can discuss these questions so that the learners can have more detailed knowledge regarding some of these topics.

So going to the general overview, from your perspective, why does logistics play a crucial role in supply chain?

GWYNNE RICHARDS: Simply put, it’s to get products in full and on time to the customer. So warehousing and transportation plays a large role in making sure that what the customer has ordered is exactly what they receive and when they want it to be to be delivered.

SUMEER CHAKUU: And now by the advent of new type of logistic services, for example city logistics or door to door logistics, do you think that it will change the supply chain structure a bit, or it will remain the same?

GWYNNE RICHARDS: I think actually the biggest challenge is probably the introduction of e-commerce. And a lot of people now ordering online. So that’s really the biggest challenge. I suppose you could call it the last mile delivery, where companies, now instead of delivering to retail stores, we become the pickers and transporters. And now deliveries have to be made to people’s homes and flats, which is certainly a big challenge.

SUMEER CHAKUU: Yeah there’s definitely a really good point, which we’re making. We’re now coming onto the technology, because our first model had two perspectives, one was the overview and the second part moved into the container ships. So nowadays we see that technology is playing - there are driverless cars - technology is really playing an important role. So there has been some research going on to have crewless ships. So do you think that the technology that might be used in the future container ships will have some impact on the logistics?

GWYNNE RICHARDS: Yeah, as you’ve just mentioned, driverless trucks are now being trialled around the world. And also the opportunity of introducing crewless ships is an interesting one. Certainly they don’t have the same congestion that we have on our major highways and motorways. So that might be a possibility. There does get to be some congestion obviously, on the entry and exit to ports. So whether having a totally crewless ship is going to work. But I suppose the whole idea of having a crewless container ship is to reduce costs further. So what we’re seeing now are bigger container ships. Now we’re up to something like just over 21,000, nearly 22,000 20-foot equivalent units being carried by a container ship.

So from that point of view, the cost per unit will come down. But there is so much competition in that area that any other potential cost savings, such as reducing the amount of people operating the ship, will enable companies to reduce their costs further.

SUMEER CHAKUU: Will it also have any impact on turnaround time or something associated with the time perspective?

GWYNNE RICHARDS: That’s a difficult one to answer, because that very much depends on the companies, the shipping lines themselves, as to how quickly they want the ships to actually travel. Because the quicker those ships travel, then the more energy they use, so therefore more diesel, which obviously then has an impact on the environment. So from that point of view, we’re seeing a lot of shipping companies actually show slowing down their ships so that they use less diesel, and therefore have less of an effect on the environment.

SUMEER CHAKUU: So now as different modes of transportation what we have for transporting the goods, the impact on environment is really different. So in using different modes of transportation, what do you think is the greatest challenge?

GWYNNE RICHARDS: One of the biggest challenges is coordination between the different modes of transport. Because what you tend to find is that there are different companies operating the different modes of transportation. So we will have rail companies, have inland waterway companies, and then of course road transportation. So with that comes this difficulty of coordination. So it’s then having a company that is going to be able to manage that whole process from collection potentially by roads transfer to rail or potentially inland waterways, and then delivery to the final customer, which again will likely be by road. So it’s the coordination of those legs of transportation.

SUMEER CHAKUU: So would the carbon footprint have a consequence on selection of a particular type of transportation?

GWYNNE RICHARDS: Oh yeah, absolutely. Certainly at the moment, diesel trucks are the most polluting. If we take air freight out of the equation, then we have rail and inland waterways, which are pretty similar. It very much depends then on how the energy is produced for rail, whether it’s electric trains, whether it’s diesel trains, for example, but even then, when we have electric trains, you have to think about how that electricity has been produced, whether it’s a nuclear power station, whether it’s a gas power station, or whether it’s through natural resources, such as wind or wave power.

SUMEER CHAKUU: So it directly implies that the logistics is getting more and more environmental friendly in the future isn’t it?

GWYNNE RICHARDS: We’re on a roll and I think we’ve certainly heard in the news recently the fact that CO2 emissions are increasing. We have the Paris Agreement where companies trying to risk less than 2%. It’s a big challenge. We have a scenario now in America with President Trump saying he wants to walk away from the Paris Agreement. So anything that any company can do to restrict CO2 emissions has to help the overall planet really.

SUMEER CHAKUU: Now further moving onward to our block three of this week where we discuss the career options in logistics. So what do you think is a good starting point to opt for a career in logistics?

GWYNNE RICHARDS: That’s a good question. And I think today there are a lot more logistics based courses. And we see a lot of universities providing those courses. I’d still like to see more schools actually understand exactly what logistics is about, and maybe even have a supply chain course for kids in secondary school. In terms of how somebody gets involved in logistics, then having a, certainly an understanding of what logistics is about. So courses like this one that we’re running, where people can get on board and see what logistics is about. There is a board game called On the Move, which students, and pupils can play, and again, get an interest in logistics.

As for how a student, or even a pupil at school gets involved in logistics and the skills that they need, I would say one of the biggest skills is being quite numeric. So being able to deal with numbers. Then there’s the aspect of technology now. And I think more students are likely to go into supply chain now because of the advance in technology.

SUMEER CHAKUU: Thank you, Gwynne, for this thoughtful answer for a starting point to opt for a career in logistics. Now let’s move on to a bit more like a fundamental question regarding the advantages of using certain type of logistics company. Nowadays we see that the business model of the logistics companies is changing. And now we have third party logistics, service providers mostly used to deliver the goods. Do you see any advantage in using third party logistics companies?

GWYNNE RICHARDS: Absolutely. Third party logistics companies are seen as some of the experts in both warehousing and transportation. In terms of transportation, what we also see is the opportunity for third party logistics companies to deliver a number of different companies products on the same vehicle, thus sharing cost, and obviously, therefore reducing the number of trucks on the roads. If you think about the companies who deliver our parcels, Hermes Yodel, Federal Express, United Parcels, all of those kinds of companies provide a service where they’re delivering on behalf of a number of both online and bricks and mortar retailers. So certainly using those companies helps.

Also there are situations where some company logistics is not being a core competence within the company, and therefore what they are doing is utilising the expertise of third party logistics companies to assist them in providing an excellent service for their clients.

SUMEER CHAKUU: So now moving to the last block of this week, which was regarding warehouses, so what’s the future of warehouses, especially keeping in view the people who work in them?

GWYNNE RICHARDS: OK, again, an interesting question. Certainly automation and robotics is going to play quite a role, I think, in the future of warehousing. Us as consumers require our goods a lot quicker these days, and therefore in order to manage all of the orders coming in from everybody who orders online, companies now have to bring in automation. Because just throwing people at a job of work within the warehouse works up to a point. But if we are to deliver on time and in full to our customers every single time, then we need some form of automation and technology to help within the warehouse. Going forward with that, the potential is the introduction of robotics into the warehouse as well.

So we’re starting to see companies now using forms of robots, robots that are being able to bring shelving to a person who will still pick the item from the shelf down to robotic arms, which are able to pick items and put them into a box for onward delivery to the customer. I suppose the issue going forward with this is what do we do with the people that we are going to be replacing within the warehouse itself? And that is going to be a big moral question I think for companies in the future. It’s certainly going to be a big challenge, I think, going forward.

SUMEER CHAKUU: So when you already mentioned what is the impact of automation and robotics on warehouse, as we will be using robots and robot arms and so on and so forth, will it directly have a direct impact in the design of the warehouses, the way in which warehouses are designed?

GWYNNE RICHARDS: Potentially, yes. If we’re going to use automation with a lot of cranes and things like that, we could build the warehouses higher, and utilise less land, which is becoming very expensive and infact at the moment, companies are now thinking about actually building warehouses underground because of the cost of land. So potentially then using automation and robotics might help in terms of the environments underground, and using that kind of technology rather than having lots of people working in an underground environment, which might not be so conducive to work and health potentially, I suppose.

SUMEER CHAKUU: Thank you very much for your time, Gwynne and for your input. And dear learners, that’s it for this week’s round up. Please check it out for next week.

GWYNNE RICHARDS: Thanks very much.

SUMEER CHAKUU: Thank you very much.

GWYNNE RICHARDS: Good luck to everybody on the course. Thank you.

SUMEER CHAKUU: Yeah, thank you.