The parcel industry has seen rapid growth, thanks largely to the e-commerce boom. Recent market volatility has tempered the rate of growth, but projected continued growth brings increasingly complex challenges. Labour shortages, space constraints, and rising consumer expectations are now consistent challenges facing the industry – and these issues are driving the need for increased automation in the parcel handling process.
One of our customers recently carried out a study to examine what capacity they would need in five years’ time and where new facilities might have to be opened. The company’s human resources team assessed the plan and concluded that they simply would not be able to hire enough people to match the forecast. In fact, some parcel companies cannot run their current facilities at optimum levels, due to a lack of personnel to meet the demand.
Therefore, it’s understandable that Parcel Key Account decision-makers are focusing on automation as a solution – not just to grow their businesses, but also to maintain performance at current levels. We at Vanderlande agree that this is the way forward, which is why we are now working closely with several key accounts on developing the co-innovation partnership model.
A different approach
This new way of working differs greatly from traditional sales-led approaches, in which companies like ours would go to a customer and say: “Would you like to buy our new sorter?” Co-innovation is about sitting down with our customers and working hand-in-hand together on business challenges in order to co-develop solutions to innovate to best effect.
Partnership is the key to making the model work. For example, we have developed a co-innovation team with one of our major customers, comprised of personnel from both Vanderlande and the parcel company. The team meets every two weeks to review progress on the initiatives we have identified together.
We’ve worked hard to remove impediments to the co-innovation approach to ensure our customers have confidence that it can deliver. One block to success can be issues around ownership of intellectual property (IP). In our model, we develop the products that come out of the partnership discussion and retain the IP. In return, we develop a solution that helps the customer to get where they need to be in terms of automation.
Co-innovation in practice
So how can co-innovation make a difference in the parcel business? For some of the major industry players, the biggest challenge is finding automation solutions for the loading and unloading of trailers, which is a labour-intensive operation. We’re now examining various options for this complex area of activity, which will be able to be tailored to the needs of different companies and both existing or new facilities.
We’re also co-innovating on solutions for small parcel automation. The process of putting parcels into bags remains a manual process, requiring people to walk up and down sorter lines to ensure bags are full, closed properly and labelled.
The current focus is on getting a bag in place and filling it automatically, before someone applies the label and zips it up. In the future roadmap, we have a vision for automating the entire process, with bags entirely untouched by people. Finding ways to automate these activities will save significant time and money for our Key Parcel Accounts, while providing new avenues of revenue for Vanderlande.
Another exciting area for co-innovation is the development and use of software to optimise hub operations. One example is using data and the right software tools to support decision-making in parcel center operations.
In summary, the key message about co-innovation for Vanderlande is that we’re moving from being a reactive trusted materials equipment provider, to a proactive business partner that can help solve our customers’ biggest problems. If our customers will dedicate their resources – primarily people – to the process, we will prioritise our resources to developing these solutions.
The co-innovation partnership model is a key initiative in defining and driving our roadmap for the future.