First-time automation: How CEP startups and small facilities can use automation to power logistics agility

By BEUMER Group

How automation can support business growth

For Brazilian startup, Loggi, this was certainly the case. The São Paulo-based company, founded in 2013, aimed to connect people in the last mile delivery through its “logistics-as-a-service” platform. The app puts individual delivery jobs out to tender to nearby couriers, finding better delivery routes and ultimately the best last mile delivery.

Loggi’s operations were almost completely manual and it was looking to expand its capacity but with minimal cost. For the startup, versatility was a priority and it didn’t want to be forced into rigid processes. How could it expand its capacity but retain its agility and flexibility?

Initially, Loggi decided to implement a fairly limited degree of automation while retaining some manual processes around it.

What were Loggi’s considerations for automation?

What led to Loggi’s decision to deploy a limited-level automated solution?

From the start, it was Loggi’s commitment to its customers that led it on its path to automation, as delivery time and fast sortation were all important. But Loggi also knew it was constantly evolving so was looking for an adaptable solution until it understood its own processes better and what it really required for the future.

Loggi also understood that as its manual processes were very dependent on employee productivity, it couldn’t control its parcel flows and the potential for error. At this early stage, it needed an adaptable automated machine – rather than an entire system – that could help eliminate these errors.

Automation as the solution

Loggi decided to start with a line sorter system, a simple but high-speed automated solution.

This level of automation enabled the startup to generate infeed cadence and output flow in the sorter’s chutes with very little manual intervention. It meant parcels were made available to staff at the pace required by its operations.

Loggi could also measure productivity at every step of its operation which, in turn, could facilitate process flow improvements. The line sorter solution has given Loggi a greater sense of control over its operations and the company is no longer at risk of losing knowledge if people leave the company.

To continually expand and grow without automation was not sustainable for Loggi. But while Loggi’s automation didn’t require differently qualified people, it did mean adapting its workforce to a new reality. Other work areas needed to be created, such as control, planning, maintenance and training.

Loggi found that when introducing automation, training is particularly essential, both for familiarising staff to new processes and increasing the sorter productivity.

What did Loggi achieve with its initial automation step?

By moving from a manual process to a new automated process, Loggi was able to achieve significant volume gains.

With its new, cross-belt version of a line sorter system, it could increase its processing capacity immediately, from 40,000 packages a day to 60,000 parcels a day. As Loggi could offer better quality to its customers, its volumes scaled exponentially. Loggi now handles 320,000 parcels a day, with a daily capacity of up to 400,000 parcel if required.

The technology met Loggi’s required versatility; all parcels could cross the sorter in the same process without having to be pre-sorted. It also complemented the startup’s need for agility because it could build and reconfigure its system as its business grows.

Loggi’s investment illustrates that even with a low CAPEX, a startup or small CEP business can expand its burgeoning operations.

Loggi scales even further

Loggi’s continued growth has led it to invest in another level of automation. In an expansion of its network, it has also installed a loop sortation system in a new hub.

From an operational point of view, the extension of its system was very easy for Loggi as it was already familiar with the handling process and control system of the loop sorter system through its line sorter. The flexibility offered by its initial investment could accommodate the expansion of its operational capacity, meeting Loggi’s ambitions from the start.

Today, Loggi has more than a handful of cross docking facilities across the country and this agile company aims to grow the business.

Implementation of an automated solution

Loggi shows how small facilities can take initial steps to automate their processes in ways that keep investments costs low but retain flexibility and agility. As the technology platform for the line and loop sorter solutions was the same, it was easy for Loggi to extend its system – demonstrating how adaptable solutions enable smaller CEP businesses to augment their automation as they scale.

If a company is looking to invest in automation solutions for the first time, we would always recommend considering three key factors related to automation.

1. Firstly, to consider the amount of money earned per item and how the costs and benefits of automation would affect this.
2. Secondly, look at the distribution network surrounding the process; if the new system allows more items to be processed at a faster rate, can the network handle the higher capacity?
3. Finally, consider the operational costs per item before investment and how the automation solution would impact these.

Based on this information, we can calculate if automation will be affordable for the business.

For an introductory guide to automated parcel sortation, read our article here.

The benefits of automation for the startup

For Loggi, the installation of its automated solution, which was achieved very quickly, has significantly lowered the costs associated with its operations.

A key benefit of the sorter system for many growing companies such as Loggi, is its physical flexibility and adaptability. The line sorter system’s modular architecture is extendable and also highly mobile, making it a perfect solution for moving or extending premises.

A well-designed line sorter system, such as BEUMER Group’s line sorter, can be specified on a very small scale initially and can easily be extended or upgraded to more advanced, high-speed sorters, such as the loop sorter, at a later point with the same controls platform.

We can summarise the benefits of the automated solution in this way:

• Increased speed
• In-built flexibility and modular architecture, making it scalable and able to support business growth
• Greater efficiency – optimising timing and delivery
• Costs saving – in terms of resources and increased accuracy in the process
• Greater control over processes – including the retention of company knowledge
• Integratable with future processes and organisational setups, such as robotics, data analytics and other data technologies

Takeaway

In our view, small companies in the CEP industry don’t need to be locked into rigid processes when selecting automated technologies and systems for their businesses. We believe it’s possible for them to start with flexible and adaptable automated technologies at the low end of the CAPEX scale. Then, as their business grows or pivots, they can reconfigure, augment or upgrade these simple systems in dynamic ways.