Innovation and Digital Transformation at Schnellecke Logistics (Karsten Keil, Management Board, Group IT & Digitization)

00:00:01: Hello and welcome to the logistics tribe I'm boss felgendreher founder of the logistics tribe in today's show is hosted by Marco prüglmeier,

00:00:13: his guest today is Karsten keil Karsten Heads Up group it and digitization at schnellecke Logistics,

00:00:20: genetically is a traditional family-owned Logistics provider based in Germany but operating globally with a very sizable footprint in the automotive space.

00:00:29: We were curious to find out how schnellecke it is incorporating Innovations and new technologies to stay relevant in the marketplace

00:00:36: let's Jump Right In Here Comes cast and Kyle from schnellecke Logistics

00:00:39: enjoy hello Coston welcome to the logistics tribe hello Marco nice to meet you and thanks for the invitation

00:00:48: yes that's great I was actually looking forward to our conversation because we both have worked in logistics and Innovations and it's always good to talk to somebody that is kind of on the same track.

00:01:03: So I'm very much looking forward to that cast you are but for just for our audience would you maybe like to introduce yourself a little bit and and what you are doing it at schnellecke a yeah thank you Marco.

00:01:17: I'm working for schnellecke a logistics it's a global logistics service provider working in automotive industry and I'm responsible,

00:01:26: vice president for it and digitization and with me is a very nice team of 150 people.

00:01:34: Working around the world from.

00:01:38: The design of IT service and to the implementation and the running of the services.

00:01:45: And we are delivering all the IT services to schnellecke ER Logistics globally.

00:01:51: And let means we are developing kind of software.

00:01:57: We are implementing standard software such as sap Erp systems.

00:02:03: And we also managing and planning complex it infrastructure it security and one part of my organization is also,

00:02:16: to drive to digitization inside schnellecke.

00:02:19: And that is new for us because we are influencing also the digital culture inside schnellecke care.

00:02:28: We educate digital trainees digital agents we do ideation and Innovation workshops all over the world.

00:02:38: Tent for sure our task is to find Smart solutions to improve.

00:02:44: Our business and to make schnellecke give fit for the future mhm when did you start with the with this kind of innovation work and and and what was the reason that you have it combined with the,

00:02:57: with the IT department yeah we started more or less five years ago,

00:03:02: 50 digitization management and why we place this in a nightie.

00:03:08: Yeah that's simple all our processes are needed by it no processes running without it.

00:03:19: And the expectation of our board is that it pushes the digitization inside,

00:03:27: schnellecke a logistics and nowadays there is basically no more innovation without it right so it's that's the truth.

00:03:38: It's all it what are the main the main parts that you are working on so what are the main innovations that you take care and thank that come to your mind when talking about innovation,

00:03:52: we have to separate if we speak about Innovation management then we have the separate.

00:03:58: That into two slices First Slice is.

00:04:03: The business Evolution that means bringing permanent Innovation to our business with smart technology.

00:04:11: To improve quality to improve the cost efficiency and so on and on the other side this is the second slice we will.

00:04:21: Create new business opportunities with digital business models.

00:04:28: Yeah to prepare schnellecke for the future to to create,

00:04:34: in the future Revenue with digital businesses okay

00:04:39: and and what are the technologies that you're taking a look at to do that different kind of Technologies We are following the global trends of innovation in India in general,

00:04:52: and what trends are impacting the the logistics in global we have to separate between short-term and long-term trends and.

00:05:01: If I look to the short-term Trends we see the following Trends as well as one.

00:05:08: At first the iot iot has the potential to connect virtually anything to anything.

00:05:15: And accelerate data-driven Logistics in the second.

00:05:19: We see all about data standards and advanced analytics that means Clean Master data to increase the quality of the analysis.

00:05:30: Of the collected data and to use them in a meritocratic way.

00:05:35: For example for predictions the third Trend what we see and what we have in focus is the real-time supply chain visibility.

00:05:45: And that means establish full transparency in the supply chain in real time.

00:05:50: Supported for sure by iot to enables the significantly better planning.

00:05:57: Optimize costs and increase resilience in the processes.

00:06:03: And in the fourth we see the whales robotics 80% of all warehouses worldwide manually operated today.

00:06:13: Cribbing and sensor technology is developing very quickly and offers more and more possible applications the objective is a deep collaboration between humans

00:06:23: and the robots does that mean AMR is like autonomous mobile transports or is it also handling robotics that you were taking a look at

00:06:33: it's both it's both we need the amr's yeah for improving the material flow inside our warehouse from A to B.

00:06:42: And.

00:06:44: We need also Robotics and we experienced some cases with robotics for example for packaging or for prepare preparing Packaging.

00:06:55: So it's all about Robotics and if we stick to the am our topic for a second because there is a big discussion going on

00:07:06: about agvs versus a Mrs so did you already

00:07:12: or are you taking already the jump from traditional ATVs to a Mars and if yes why are you doing it so what are the advantages that you experienced,

00:07:23: if you speak about the agvs then you mean the guided vehicles on the floor with refuse stickers right

00:07:30: right right right yeah just line following just line so the traditional okay sort of ATVs and yeah,

00:07:38: and in comparison to a mosque this huge difference between the flexibility,

00:07:44: and what we see is the following the trends what we see on the market is but our business.

00:07:53: Expect in the future more and more flexibility.

00:07:57: We have in our digital strategy One Vision it's called we organize our Logistics in the future.

00:08:08: Dynamic.

00:08:10: Serve optimized on a really high level yeah and to reach this goal we need amr's instead of classical agvs because with ATVs you have now.

00:08:22: No we did chance to to optimize the flow

00:08:26: of the material in the vows yeah right we because you're actually depending on an integration company that sets up the system and then you're basically stuck with this system that never changes again.

00:08:39: That's that's something that a lot of people are not seeing this this flexibility issue and yeah I'm always wondering why buy some people are still sticking to the.

00:08:53: Old traditional agv type of vehicles.

00:08:59: Even if there might be some use cases where it's still enough to have an agv.

00:09:06: But I clearly see the future in a Mars and I was actually glad to hear,

00:09:12: because we were discussing a little bit before that you are actually working with why my former employee with ideal works.

00:09:21: About pilot project yes and we need a bit Advantage what we see with the am are from idea works for example is,

00:09:31: the navigation yeah did navigation is not fixed to a topology but you have in place in your house it can change from day to day because of.

00:09:42: Removing Parts containers and so on in the warehouse and this flexibility is necessary for the future and also if we speak about holistic.

00:09:51: Material flow optimization we can just have success at the end if we use amr's instead of ATVs

00:10:00: yeah I see the exactly the same we're on the same track here

00:10:05: you mentioned the iot part and transparent supply chain and I read that you also doing a lot with smart containers and tracking of containers,

00:10:16: um could you tell us a little bit more about that yes we started three four years ago Vision start up to,

00:10:25: identify.

00:10:26: What can we improve in our processes to track the material without building an infrastructure on our side or on customer site where we deliver the material.

00:10:37: And we found out with sensor technology the Cyber sensoric is a very good way to to do this.

00:10:44: And based on the first ideas we started with an.

00:10:49: MVP miss a minimum viable product and we learn from that mvp and readjusted the discoverer of work.

00:10:59: And finally we track,

00:11:02: most of our Justin sequence trolleys which are in flow between our Logistics centers and the customer assembly line,

00:11:13: by this sensor technology and the huge impact is we really.

00:11:19: Increase the D quality level we have really 0 PPM now in those processes.

00:11:27: And at the end it's decreased also the necessary.

00:11:31: Communication between the operation is sites on customer and on our side.

00:11:38: Which is at the end waste yeah just communication to ask hey is the trolley.

00:11:45: In line is it delayed or whatever it's waste of all of us here and.

00:11:52: We are really proud to have this inside our portfolio and to make it as a standard for our business,

00:11:59: and what about the really fancy things cast like a blockchain or drones are you also,

00:12:06: um taking a look at those Technologies blockchain we see it as a trend in the in the future maybe in 5 to 10 years not for now it depends on our genetic business which is more or less.

00:12:21: Closed in contract Logistics.

00:12:23: But in case of innovating deal whole supply chain from the first year over the logistics provider over the carrier.

00:12:34: Till the OEM.

00:12:36: Then we see huge potential to work with this Block Chain because blockchain is really a smart technology to.

00:12:45: Switch from a center lipstick database to a decentralized shared system and this is very helpful especially in times when we see an increasing number of,

00:12:59: cyber attacks in the moment yeah and decentralized system if this is infected by a Cyber attack.

00:13:07: Then no one can work with it but if it's decentralized system and based on blockchain then we have better resilience.

00:13:16: In the prostate,

00:13:18: did you actually already encountered some cyber act at exit at Jellico or at least attempts to do that for the moment no,

00:13:28: no we are rigorous trading day by day for sure trials yen to him to do that next.

00:13:35: But knocking on wood for the moment we are really really safe okay so but there are signals that the trials are getting more and more in quantity probably.

00:13:48: And that this could be an issue for the future and yes blockchain could could have some advantages there okay see that yeah and if you ask me about drones drones is also very interesting to us.

00:14:03: We did a trial in one location for inventory management,

00:14:08: you know we do inventory management and most of our locations by human beings yeah and that creates cars that creates workload and so on.

00:14:19: And we see really nice potential to use drones for inventory management especially if you block text yeah or RFID tags on your,

00:14:28: boxes then you can fly through the warehouse and scan the the text very fast and you can really speed up the

00:14:37: total time of taking General inventory process

00:14:41: yeah that sounds interesting because you what you basically do with the inventory count as you see is the right box at the rice right spot at the right place in the in the warehouse yeah and

00:14:54: with the Drone you're basically As I understood your flying by and you are reading the text and you can probably also match up some I don't know some markers or so with the camera.

00:15:06: To detective the tag or the load unit is on the right place right okay it depends on the on the way of inventory you do but you are right we can also compare the storage location,

00:15:19: yeah the physical and his system based one and there we can find out very quickly mistakes and we can correct it and,

00:15:29: that improves also our Logistics quality how about augmented reality and virtual reality does this play a role already yeah,

00:15:39: yeah we use both of that technology the virtual reality especially for training issues yeah to.

00:15:49: To onboarding or yes yes exactly exactly Michael yeah especially for onboarding process is it's really really helpful for us you know we are working in

00:15:59: in Mexico which is really nice country and in Mexico we have really trouble with the fluctuation with the turnover of persona.

00:16:09: Tend to decrease the cost for the onboarding we use virtual reality.

00:16:18: And it's really The Good Tour yeah to teach the people and to bring them in really short time from the.

00:16:26: Entrance of the company to the shop floor to do a great job

00:16:31: do we have any data already on that so how much quicker or how much better training could be or something do you got any experience about that already yet it did training,

00:16:44: increase the digitized increases around 20 to 30 percent wow that's huge that's you just really,

00:16:52: and the augmented reality is in use I don't know if you know we were the first one,

00:17:00: as a logistic provider in automotive industry who has.

00:17:04: Launch the Google Glass for sequencing processes yes I know I actually got the chance to see it we need it yeah yeah we did,

00:17:15: yeah and we had an exchange and we could see that a nice yeah the picking with the picking process and I think it was together also with with some RFID technology if I remember it right or some

00:17:29: right some wristband writer detected the right box or the right item to take two.

00:17:36: Right right and I like this technology really much because it combines the human intelligence with automated.

00:17:46: VI base processes and that is an unbeatable Alliance from my point of view.

00:17:53: Because it's so intuitive right you you just use the glasses and you you can immediately start and there is no not really much to know you you get the.

00:18:06: The right numbers into into your display and you know how.

00:18:12: To take the Pirates and that makes it very easy and very suitable for this use case of picking parts that is right and did you roll that out the the a are picking use case,

00:18:25: yeah we voted out to South Africa in the past and also to Mexico from Germany,

00:18:31: the experience we made were different in Germany and South Africa they work.

00:18:41: Really well with the system in Mexico where we have really hot temperature outside and inside the warehouses we got some trouble with the.

00:18:50: 50 a coup and 50 device it was heating up to lat.

00:18:55: And pigments of the temperatures yeah that yeah always the thing but Innovations are you always occur some some fancy things that you were not thinking about before right and that around you have to deal with it

00:19:10: that's right in some of the users didn't acceptance the technology that's why we cut it off in that cases and yeah,

00:19:19: but in in some use cases it makes sense and it's really really helpful for us another big top

00:19:26: topic where I would be really interested in your opinion on that is autonomous trucks and how would they

00:19:35: yeah influence us in the logistics in the future how fast do you see that coming and what is your opinion in General on the topic of autonomous trucks

00:19:46: I see a huge potential in it yeah lifted technology technology.

00:19:52: And Eva increasing investment in development of sensors and vision Technologies like the Google Glass yeah or something else.

00:20:00: Safe driving capabilities will transform the way car vehicles are assembly the operated utilized and service.

00:20:09: I see self-driving Vehicles will upgrade Logistics by unlocking new levels of safety efficiency and quality but I see if you ask me directly as an opportunity.

00:20:21: Well faster more efficient transport thanks to optimize routing waiter Lane density 24/7 operation.

00:20:32: Devil be also a better road safety and operational productivity,

00:20:36: as human error is eliminated mmm and there will be an environmental impact due to more efficient fuel consumption but I see also challenges about autonomous tracks at first the legal restrictions.

00:20:51: Thin count trees states can slow adoption.

00:20:55: Most also security and safety concerns about the detrimental consequences of potential hackers and software box.

00:21:04: And at the end potential job losses and need to obscured the people affected by driverless vehicles.

00:21:12: This is the last point is that the end also an advantage here if we look to the market where we have trouble too,

00:21:19: to gain new people from the market to high-end talents it is also.

00:21:25: Really helpful to have autonomous trucks in the future yes Aunt is already in Germany and in the u.s. especially there is also also right now a huge shortage on truck drivers

00:21:38: absolutely as I know from last month in Germany to shortage of truck drivers is around 60,000 people.

00:21:46: That's your number and that you Jen and I could actually get to a real problem for Logistics,

00:21:55: yeah and they're in their autonomous trucks could,

00:21:59: yeah probably have a lot we are you're already experiencing but with first use cases maybe on a trailer yard or something like that where you got fenced areas,

00:22:11: no not yet not okay,

00:22:13: no because this will probably come in the next in the near future that you start on on on the on in your own yard let's say for the.

00:22:23: Yeah for the last talking on the onto the dok levels or something like that yeah and I know it from from one company

00:22:32: then I'm working with they are doing the daily operations for those kind of autonomous trucks but only in fenced areas already

00:22:43: hmm and this seems to be quite promising already hmm,

00:22:48: you mentioned also cast in the issue of sustainability what is schnellecke he doing on that pilot to get more sustainable processes or we do a lot about sustainability we have to,

00:23:02: understand what schnellecke understands with sustainability at the end schnellecke,

00:23:09: is trying day-by-day to improve the service quality to create really,

00:23:15: successful and sustainable business activities.

00:23:20: And the long-term success of our company also depends on how early we identify risks and opportunities at an early stage.

00:23:28: And that we consistently comply with laws regulations ethical principles and voluntary commitments.

00:23:36: We commit ourselves and our suppliers and service providers to apply the same principles to ensure sustainable business.

00:23:44: Including Environmental Protection human and labor rights of employees transparency and business relationships fair market conduct.

00:23:53: The due diligence to promote responsible raw material supply chains and integration of sustainability requirements into organization processes and last but not least to the systems.

00:24:05: We already operate green it you know what it means we use renewable energies,

00:24:13: we have had in the past virtualized all the servers we use photovoltaics to get the power supply to the data centers and we have already been using eat rugs electronic tracks in selected areas further areas.

00:24:28: Real-time transport with a fixed route take place and we can Implement a charging station at the end at the beginning of the row,

00:24:37: sustainable action is and,

00:24:39: integral part of our strategy and it's reflected in our vision mission and value proposition particularly in logistics where many partners including competitors work hand-in-hand with each other,

00:24:52: and that is a challenge to enforce,

00:24:54: our own sustainability requirements in the end the entire supply chain is only as a stable as its weakest link is positioned

00:25:03: that's my point of view and yeah the green it issue and I think that's quite interesting because

00:25:10: the it consumption part of energy I think it's not negatively right I think there it is quite some

00:25:18: energy consumed by all the servers and so on for sure

00:25:22: we have 5,000 work places all around the world and we have around eight hundred servers in total,

00:25:31: and they consume a lot of energy and with the way to go green it just a decision too.

00:25:39: Yeah bring the the power supply to a sustainable level we took a huge step 2,

00:25:47: decrease our carbon footprint and we measure it yeah you mentioned or coming back again to the autonomous trucks issue because that is really something that the entire I'm thinking a lot of

00:26:01: just your opinion could it be that this opens new possibilities for the oems of the trucks so for the autonomous trucks in the future so that they are,

00:26:15: actually will act as a shipping forwarder do you see desert that as a threat for,

00:26:22: for the traditional forward accompanies yeah we see this as a genuine friend yeah all the logistics integrators that means the.

00:26:31: The oems of the of the autonomous trucks or also the forklift A Material Handling Systems.

00:26:41: As more as they automate their system and as more as they bring autonomous.

00:26:49: Smartness inside that will really create a fret.

00:26:57: To keep our existing business because.

00:27:03: Did technology allows us as you said.

00:27:08: To bit Services as our competitor.

00:27:14: In the in the future and we speak in our strategic meetings,

00:27:24: since a couple of years about this Fred and we try to.

00:27:30: Generate generate opportunities based on this development on off of the market yeah.

00:27:37: What we see as a big challenge is and as an opportunity is to create platforms.

00:27:45: To manage the technology and manage means Hardware independent in case every material handling supplier brings his own steering platform on the shop floor.

00:27:58: Then then it's still really challenging the users at the end because they have to work in several kind of steering platforms but if we have multi-platform available.

00:28:13: Independent from the hardware,

00:28:15: then it can creates an advantage of of schnellecke is business for the future here like Hardware agnostic platforms that data in the cloud right

00:28:25: that's fun but do you see that on are you talking about the shop floor or about the trucks to autonomous trucks and

00:28:34: steering order

00:28:37: coordination of those trucks in the future I talked about the shop floor equipment but I see parallels to to the autonomous trucks,

00:28:47: outside mhm.

00:28:49: Okay and you as schnellecke a you see both as an as an opportunity actually to jump in there yeah and connected maybe to that question cast and how what do you think about the.

00:29:04: Freight forwarder platforms that are now existing right now already,

00:29:10: like CPU and and so on and some of them are really getting big right now and how do you see that development in the startup environment right now,

00:29:21: to be honest in the current business it is a must for every transport Logistics specialists,

00:29:29: to use that platforms yeah in times when the shortage of available cargo space is constantly increasing.

00:29:38: And on the other hand Supply chains are moving more and more from push to pool.

00:29:42: We have two short term demand defines the timing of the supply chain the logistics service provider must Ensure High degree of flexibility and so on and that can help.

00:29:54: This is exactly what the platforms are good for because they match supply and demand and real time.

00:29:59: And can help to serve Peak loads especially we ourselves are Potter's participants on these platforms we use team oh Cam.

00:30:10: Entrance for Ian transferee on the smallest Volkswagen based platform but Timo commerson open platform,

00:30:17: and we use those platforms really to handle our Peaks okay so that's already now for you a very important tool to use absolutely absolutely this is also because of the.

00:30:32: Of the business strategy of Malaga in the past we had huge numbers of own trucks but we have decided a couple of years ago instead of.

00:30:46: Invest into the assets our strategy is to rent the capacity on the market.

00:30:53: Living because it helps us to get a better flexibility on the course.

00:30:59: And this is important in very volatile business what we see,

00:31:03: based on the covid-19 pandemic and so on and let's stick to the to start up issue for a few more minutes how do you in general

00:31:15: cooperate with startup or handle startups within schnellecke a or in connection with schnellecke.

00:31:22: Do you have any secrets on that or any things that did work good for you or things that did not work for our listeners.

00:31:32: Yeah we might both experience good ones and bad ones it started four years ago.

00:31:40: Since fear your fear for here sorry we are working very closely with startups.

00:31:46: And the biggest challenge from the beginning was to change our culture inside the company.

00:31:56: Yeah we talked about the augmented reality picking with the Google Glass or the smart container tracking,

00:32:04: or we have also image recognition software for quality assurance and all those Solutions were created by startups yeah.

00:32:14: And we were not started with from the scratch but they presented us and in pitching's some solutions and we fought about how can we use this technology to bring it to our business.

00:32:29: To create user acceptance to create values and to bring it to Syria process and.

00:32:38: Deposit to this point was a learning curve and not all approaches have resulted in success as I said first of all.

00:32:45: As I said before it was really essential to establish a culture within the company that made a corporation with a startup.

00:32:55: Schnellecke promising,

00:32:57: you know this is like black and white yeah schnellecke is traditionally company family-owned company with more than 75 years experience and a startup,

00:33:09: which has Justin Focus to create business opportunities opportunities very fast very very very strong.

00:33:19: And especially the failure culture.

00:33:23: Was the biggest differentiation between start-up and our company so we took our learnings from the process.

00:33:32: And today we actively do scouting technology on the market,

00:33:37: we look at startups behind it and we like to have them to pitch for us our digital Innovation meant offers a governance model that allows us to try things out,

00:33:50: draw conclusions and readjust the scope,

00:33:52: and an all developments we focus as much as possible on customer benefits and thus create basic for Success right from the start.

00:34:01: And any other approach is also not targeted for us as we make our investments very selective.

00:34:09: Due to the low margins typical of Love Logistics yeah.

00:34:13: So at the end of this is success story and I can suggest to all Logistics service providers and all companies to try it out.

00:34:23: And make experience to work with startups in order it opens your mind sorry it opens your mind and it brings you to new ideas to think

00:34:33: yeah absolutely I can just agree with that but it's it seems that you are

00:34:39: also changed a little bit on the schnellecke inside a little bit of culture or something like that how did you do that or can you give us some examples on what you what you did there

00:34:51: yeah we we tried to change a lot inside our company on cultural aspects yeah,

00:34:59: as we are not finished yet we are this is a continuously process yeah and all starts with the.

00:35:07: As you typical know from change management programs all starts with the awareness.

00:35:15: We started with t with creating awareness in all our management levels because of.

00:35:22: New Market players like Amazon like Huber of a taxi or like Airbnb for hotels and so on.

00:35:30: And with this samples we created or started to create the awareness in management heads yeah and in the second phase we started with,

00:35:42: a child a brooch to bring Innovations to our business.

00:35:49: And this age I projects we changed also the methodology from,

00:35:56: the kickoff to delivering service which is usable for Syria process by using,

00:36:04: iterative methodology yeah we started and we failed we learned we started again failed learned again yeah so it's,

00:36:14: it is life cycle as you know from devops yeah hmm and that really changed step by step,

00:36:24: the mindset of our organization and power later on this we started with digital Innovation summits,

00:36:33: we we created marketing to speak about our Innovation projects,

00:36:39: we teach the digital trainees digital agents and we put those digital agents as ambassadors into our business.

00:36:49: So that they are able to do we enable them to build a link between our.

00:36:57: Classical traditional business and our.

00:37:00: A giant thinking acting working it organization understand so that they could actually see the daily problems and and find Solutions right for it right okay.

00:37:14: All right that's very good thank you very much casting for all the valuable insights that you give could give to our listeners and to myself I'm also always very interested in those kind of talks

00:37:28: and it was really a pleasure thank you very much for joining the logistics tribe thank you Marco it was a pleasure for me too.

00:37:37: All right that was the logistics try podcast episode with Karsten keil from schnellecke Logistics I hope you got some interesting insights and ideas from today's show.

00:37:46: We'll be back next week make sure you follow And subscribe to the logistics tribe podcast so you don't miss any of the future episodes I'm both fed Andrea until next time.