GXO Logistics: Leveraging Warehouse Robotics

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Why is it more challenging for them to switch to DHL if all the equipment is yours? Is it just about the capital investment in robotics and machines, or is there more to it?

Second, the contract language might state that regardless of whether the contract is for three or five years, if it is terminated early, the client is liable to pay for the remaining automation costs, whether they use it or not. If it involves complex automation, like five or six miles worth of conveyors and sorters, it's not easy to move, transport, and set up in another warehouse. Consider the supply chain business impact if it takes four or five months to relocate and set up. It would be a nightmare for a company to disrupt the flow during the transition.

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That's for network optimization. What about warehouse operations?

When designing a new warehouse, you decide on the number of dock doors and personnel required to process the material. Everything depends on the data. Typically, we start by categorizing the data into different buckets, such as the number of people, dock doors, and material handling equipment. We create a comprehensive manual process flow to determine the resources needed. If automation is considered, we provide clients with options. For instance, if a warehouse requires 100 people, we might suggest automation to reduce the workforce by 20, offering a return on investment. We also consider labor availability and challenges, emphasizing the importance of automation. It's a progressive effort to offer solutions and finalize the best approach.

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