Proving the Business Case for the Internet of Things

DHL has Idea for optimising warehouses

Steve Rogerson
August 25, 2020

DHL Supply Chain is optimising e-fulfilment for online shops with its Idea plug-and-play software that uses algorithmic analysis and data science to optimise picking routes and warehouse staff allocation,
The Covid-19 crisis has resulted in steadily growing online sales, especially online orders of everyday staples, such as food, medicines and other drugstore products, which are higher today than before the pandemic. The trend poses challenges for retailers worldwide.
In many cases, orders have increased, but the size of shipments is smaller. New and more diversified product ranges mean more stock-keeping units for online retailers. Moreover, end customers expect fast, sometimes even same-day, delivery with high transparency and traceability.
To meet these ecommerce needs, DHL Supply Chain, part of Deutsche Post DHL Group, is increasingly relying on intelligent, IT-based forecasting and analysis tools to optimise warehousing and processing of online orders for major e-sellers.
"The Covid crisis has shown us that unforeseen volume fluctuations for individual products can put enormous stress on supply chains," said Markus Voss, CIO at DHL Supply Chain. “Lack of clarity regarding stock levels and incorrect data on availability can lead to bottlenecks for individual products and then delays in delivering to end customers. We are working with our customers – large online stores and retail companies – on more stress-resilient, reliable algorithms and tools to better anticipate demand fluctuations, optimise the allocation of manpower and thereby accelerate the throughput of goods and order cycles.”
The Idea algorithm can improve order-picking processes in DHL-operated warehouses. The costs involved are comparatively low since the software is compatible with most traditional warehouse management systems and can be integrated into existing IT infrastructure. In its first commercial deployments, it has reduced distances travelled by warehouse employees by up to half and increased productivity of individual DHL locations by up to 30%.
DHL developed and designed the Idea software specifically for use in e-fulfilment warehouses. The contract logistic specialist employs a dedicated team of some 350 developers, engineers and designers to develop and optimise warehouse logistics processes on behalf of its clients.
"Our Idea analysis tool is one of our many answers to ecommerce challenges," said Dietmar Steins, EVP at DHL Supply Chain. "With its algorithm, this artificial intelligence helps optimise picking routes within the warehouse. Orders are also clustered logically, which helps optimise picking by our colleagues in the warehouses. The integrated, intelligent task planning can also optimise workload distribution for warehouse staff and help prioritise more time-critical shipments. Moreover, Idea reduces error rates as well as the time required for employee training.”