Intralogistics as a Differentiating Factor in Industrial Competitiveness
19 October 2023Article by Luiz Rodrigues, consultant in Industrial Engineering and Management at INEGI.
Investing in improving logistic flows is essential for companies' competitiveness, but the potential for optimizing intralogistics activities is often underestimated, which compromises the ability to respond to changes in the market with efficiency and agility.
Intralogistics, or internal logistics, refers to the logistical flows – whether of materials or information – that occur within a company’s facilities. It includes the supply of raw materials and consumables, the movement of semi-finished products, the collection and handling of finished products, the management of stocks and storage of warehouses, the collection of waste and waste in the production process, as well as the corresponding information flows associates.
Intralogistics involves a large set of resources and processes that are as complex or more complex as those carried out outside the facilities. Likewise, it can be affected by external factors, such as variations in supply and demand, both for raw materials and finished products.
Additionally, due to the increasingly shorter life cycles of products and the recurrence of orders in installments, production requires high adaptability of intralogistics processes to respond to these changes efficiently, as well as to maintain the level of service agreed with customers1 .
Understanding the financial and operational impact of intralogistics activities is, therefore, crucial to optimizing internal logistics, aligning costs, productivity and resource synergy. It was precisely in this context, of improving and optimizing its intralogistics operations, that INEGI's team of consultants in Industrial Management supported Amorim Cork Composites.
INEGI, through its Industrial Engineering and Management consultancy services, was a partner with Amorim Cork Composites (ACC) in improving and optimizing its intralogistics operations. The project, lasting 1 year, began with an in-depth survey of the current situation, enabling the identification of improvement opportunities for the subsequent design of solutions. Pilots were implemented to evaluate the feasibility of the proposed solutions and collect feedback on the factory floor. Finally, a Roadmap of specific intralogistics solutions was developed in accordance with technological trends adjusted to the needs of Amorim Cork Composites.
What are the main benefits of efficient intralogistics processes?
A robust internal logistics department can bring several benefits to face emerging challenges, namely:
Reducing costs and stock: avoiding wasted time and resources by reducing/eliminating empty movements and inefficiencies, optimizing internal movement routes and the associated effort of employees, as well as reducing stock in progress and safety stocks of materials.
Increased productivity: streamline internal processes and ensure the supply/collection of materials more efficiently, to directly and positively impact the OEE (Overall Equipment Effectiveness) of production equipments.
Improved service level: contribute to increasing the probability of meeting delivery deadlines for customers.
Flexibility and production control: more agile adaptation to market changes and greater real-time control of the production process, with greater decision-making and adjustment capacity when necessary.
Team safety and satisfaction: improvements in the ergonomics and accessibility of activities carried out on the factory floor through the use of modern logistics equipment.
How to achieve these results?
Intralogistics is, without a doubt, a preponderant factor in the consolidation and development of a company. INEGI's team of consultants, when acting as a strategic partner in improving the intralogistics operations of companies in the industrial sector, highlights 3 essential steps to be taken to consolidate efficient and effective intralogistics in your company:
Organization and standardization: before thinking about technological innovations, it is extremely important to characterize inefficiencies and standardize processes, as well as to optimize the arrangement of production equipment in an industrial layout, as well as in warehouses.
Optimization: reducing or eliminating tasks that do not provide added value to the customer, making intralogistics flows more efficient and production lines less susceptible to stoppages due to inefficiencies in the supply/collection of different types of materials.
Automation: integration of innovative information systems, automated and robotic logistical and industrial equipment, to obtain significant gains in the operation, such as real-time monitoring of the flow of materials and information, increased safety and ergonomics in movements, as well as reduced dependence on labor.
What is the future of intralogistics?
Solutions that are at the forefront of technological development point to a future where intralogistics correlates adaptability and optimization. According to forecasts by the consultancy Gartner, 75% of large companies will adopt automatic systems and intelligent robots in their intralogistics operations in some way by 2026 3. Therefore, some of the intralogistics trends in the digital transformation of companies stand out4:
- Complete warehouse management systems (Warehouse Management Systems – WMS), ensuring full traceability of goods and integration of the entire supply chain
- Automation of material movement through the use of logistics equipment such as AGVs (Automated GuidedVehicles) or robotic picking solutions (Automated Picking Systems / Pick-by-Robot)
- Traceability technologies such as RFID (Radio Frequency Identification) and real-time locating systems (RTLS)
- Augmented reality to aid operations, through the use of smart glasses or other systems
- Voice-picking systems
- Automatic and self-organizing warehouses
These technological solutions generate numerous benefits for intralogistics operations, after a state of maturation of the organization and optimization of current processes. To achieve a level of quality that places intralogistics as a preponderant factor of differentiation in the market, it is essential to dedicate time and resources to plan and efficiently manage the company's intralogistics.
References
1. Atos, intralogistics: are they the ultimate efficiency lever in supply chain management? Acedido em 27 de dezembro de 2022. https://atos.net/en/blog/intralogistics-are-they-the-ultimate-efficiency-lever-in-supply-chain-management
2. Supply Chain Consulting Group (SCCG), Intralogistics – What You Need To Know. Acedido a 03 de janeiro de 2023. https://www.sccgltd.com/archive/intralogistics-need-know/
3. Gartner Predicts 25% of Supply Chain Decisions Will Be Made Across Intelligent Edge Ecosystems Through 2025. Acedido a 04 de janeiro de 2023. https://www.gartner.com/en/newsroom/press-releases/2022-01-19-gartner-predicts-25-percent-of-supply-chain-decisions-will-be-made-across-intelligent-edge-ecosystems-through-2025
4. Winkler, Hannes & Zinsmeister, Lena. (2019). Trends in digitalization of intralogistics and the critical success factors of its implementation. Brazilian Journal of Operations & Production Management. 16. 537-549. 10.14488/BJOPM.2019.v16.n3.a15.