TL;DR:
- GXO Direct selects Blue Yonder’s Warehouse Management System (WMS) as the preferred solution for its Direct division.
- GXO Direct operates warehouses in major markets, enabling same-day delivery nationwide.
- GXO’s rapid growth since 2018 is attributed to its access to warehouse space, technology, and value-added services.
- The implementation of the Blue Yonder WMS aims to reduce implementation time and labor costs.
- Machine learning is used to establish labor standards and optimize workforce allocation in GXO’s warehouses.
- Labor standards derived from machine learning undergo continuous refinement and minimize divergence from traditional engineering standards.
- Investments in robotics and collaborative robots enhance employee satisfaction, safety, and retention.
- GXO emphasizes comprehensive leadership training and encourages employee participation in continuous improvement projects.
- The integration of robotics reduces training time and helps temporary workers progress to full-time positions with management opportunities.
- By leveraging machine learning and prioritizing employee satisfaction, GXO aims to drive operational efficiency in workforce management.
Main AI News:
GXO Direct, the shared services division of GXO Logistics, made a significant announcement during Steve Lewis’ address at Blue Yonder’s Icon User Conference. Blue Yonder, renowned for its supply chain software solutions, is a global leader in the industry. As for GXO, it stands tall as the largest provider of contract warehousing services worldwide. Following the conference, Mr. Lewis provided industry analysts with further insights into the matter, shedding light on GXO’s strategic plans.
Mr. Lewis took the opportunity to unveil GXO’s decision to adopt Blue Yonder’s Warehouse Management System (WMS) as the preferred solution for customers in the Direct division. This sophisticated system incorporates modules for labor management, automation, and order management, offering comprehensive support to meet the division’s needs effectively.
With its extensive network of warehouses strategically positioned across major markets in the United States and Canada, GXO Direct excels in providing same-day delivery services to brands nationwide. Since its inception in 2018, GXO Direct has experienced rapid growth, consistently adding millions of square feet of warehousing space each year.
Moreover, the company prides itself on offering access to cutting-edge technology, value-added services, and e-commerce shipping and returns to a diverse range of customers spanning multiple industries.
The Direct division efficiently serves numerous clients from a single warehouse, a prime example being a sprawling 670,000-square-foot facility in Southern California, catering to eight thriving e-commerce retailers. By consolidating operations centers and establishing multiple warehouses on a single campus, GXO ensures enhanced operational flexibility, reduced transportation costs, and accelerated delivery times.
As a publicly-traded company listed on the NYSE (NYSE: GXO) and headquartered in Greenwich, Connecticut, GXO boasts an impressive portfolio of approximately 1,000 warehouses and a global workforce surpassing 130,000 employees. With annual revenues reaching a staggering $9 billion, GXO caters to a wide array of industries, delivering top-notch services to its esteemed clientele.
Notably, GXO’s commitment to technological advancements sets it apart, as evidenced by an impressive statistic mentioned in its annual report: approximately 30 percent of the company’s revenue is derived from automated sites. This figure far surpasses the industry average of 8 percent, further cementing GXO’s position as an early and substantial investor in technology. The selection of Blue Yonder as a strategic partner aligns perfectly with this overarching strategy.
GXO’s decision to partner with Blue Yonder within its Direct network stems from the vital importance of the rapid implementation of a Warehouse Management System (WMS) to support the division’s fast-paced and adaptable business model. Recognizing the potential for accelerated implementation through cloud-based solutions, GXO aspires to deliver results up to twice as fast compared to traditional on-premises alternatives.
An achievement in itself, GXO’s initial implementation timeline spanned a mere 16 weeks. This efficiency was made possible by analyzing data from the configuration of the previous 40 warehouse start-ups, which served as the basis for creating a new template and expediting future implementations. As a result, GXO gained valuable insights into the ideal configuration even before the implementation process commenced. Considering that not long ago, it was commonplace for a WMS implementation to require up to 9 months, the prospective reduction to 8 weeks is truly remarkable.
The accelerated implementation timeline not only reduces costs but also enables GXO to swiftly onboard new customers. Additionally, the company aims to achieve a 5% reduction in labor costs through the implementation of a labor-management solution. While the expedited implementation contributes to overall savings, the benefits derived from labor management solutions are expected to outweigh those from implementation time reduction.
In a groundbreaking move, GXO is taking a fresh approach to workforce management by integrating machine learning into its labor standards. Traditionally, labor management systems (LMS) relied on industrial engineers using time-consuming work measurement techniques to determine task completion durations and optimize warehouse operations. However, the scarcity of industrial engineers has posed challenges for companies in establishing and maintaining labor standards. GXO aims to overcome this hurdle by leveraging the machine learning capabilities offered by the new Blue Yonder solution.
Through data collected from its extensive network of warehouses, GXO will utilize machine learning algorithms to establish labor standards, monitor workforce requirements, and effectively allocate workers within the warehouse. Over time, the machine learning approach analyzes data patterns, revealing valuable insights.
For instance, it may show that it takes an average of 29 seconds for an employee, like Steve, to move from location X to location Y, while it takes 36 seconds for another employee, like Dave, to complete the same task. By identifying such variations, an average time of 33 seconds can be established as the standard, ensuring consistency across all warehouse operations. These insights also enable GXO to estimate the required number of workers and their optimal placements within the warehouse.
It’s worth noting that labor standards derived from machine learning may differ from those established through traditional industrial engineering methods, typically resulting in a reduction of standards. However, this decrease is advantageous, as it ensures that employees are not overburdened with unrealistic expectations. Over time, Blue Yonder’s machine learning-powered LMS continually refines labor standards by comparing them with traditional engineering standards, ultimately minimizing the divergence between the two approaches.
Steve Lewis, President of GXO Direct, believes that the implementation of this advanced labor management solution will not lead to higher employee turnover. Thanks to investments in robotics, employees are now less involved in physically demanding tasks such as walking and lifting.
Collaborative robots, or cobots, assist in reducing distances traveled within the warehouse. For instance, in Goods-to-Person (GTP) automation, GPT robots deliver goods to workers stationed at their designated areas. Mr. Lewis is confident that these investments have resulted in improved employee satisfaction, safety, and retention rates.
Moreover, GXO recognizes the pivotal role of effective warehouse leadership in fostering employee satisfaction and retention. The company places great emphasis on comprehensive leadership training, ensuring that shift managers and site managers possess the necessary skills to lead their teams.
Regular shift meetings serve as platforms for highlighting the importance of safety, gathering suggestions for process improvements, and fostering open discussions on warehouse operations. GXO also encourages employee participation in continuous improvement projects and values their suggestions and feedback.
The integration of robotics not only reduces training time but also enhances productivity, with new employees often achieving standard levels of performance by the end of their first day. GXO’s longstanding objective is to nurture temporary workers into full-time employees, providing them with clear career paths that can lead to management positions.
By embracing machine learning and fostering a supportive work environment, GXO is poised to reshape workforce management, driving operational efficiency while prioritizing employee satisfaction and growth.
Conlcusion:
GXO Direct’s strategic adoption of Blue Yonder’s Warehouse Management System (WMS) and integration of machine learning in labor standards signal a significant step forward in the logistics and supply chain market. By leveraging cutting-edge technology and advanced analytics, GXO Direct is poised to enhance operational efficiency, reduce implementation time, and optimize labor management in their warehouses.
This move reflects a broader industry trend towards automation, data-driven decision-making, and the prioritization of employee satisfaction and retention. As GXO Direct sets a new standard for warehouse management, it reinforces the importance of leveraging innovative solutions to drive competitive advantage and deliver superior customer experiences in the fast-paced and dynamic logistics landscape.
