Dematic + Google Cloud: A Paradigm Shift for the Supply Chain Industry
January 4, 2023
Dematic and Google Cloud leaders discuss why this partnership will transform the Supply Chain Industry
It’s a marriage of worlds that will improve customers supply chain execution, bolster supply chain resiliency, and deliver new technologies: Dematic’s decades long expertise and Google Cloud’s cutting-edge cloud powered by Artificial Intelligence (AI) and Machine Learning (ML) technologies.
Transforming the supply chain industry is a tall order. So when Dematic looks to the future, strong partnerships will play a significant role. With Google Cloud, Dematic has found a partner whose core values, culture, and roadmap for the future aligns with its own. Together, both companies aim to transform the supply chain industry by moving beyond warehouse management and entering a new age of warehouse optimization. It is a game-changer for the industry that will allow Dematic to develop and deploy a range of solutions, including e-commerce and omnichannel fulfillment for key vertical markets.
Q&A with Samrah Khan and Irfan Bharde
Samrah Khan, Global Head of Supply Chain Technology Partnerships at Google Cloud, and Irfan Bharde, Vice President of Software Commercial Acceleration at Dematic, shed light on the reasons for the partnership, the challenges ahead, and how this partnership will influence the entire supply chain industry.
Irfan Bharde - Vice President of Software Commercial Acceleration at Dematic
Through our services we will be able to transform warehouse management to warehouse operations. Better yet, warehouse optimization.
Khan: There are a few reasons. If you look at the supply chain industry as it stands today, you see a dramatic shift from three years ago. This has caused several challenges for enterprises as well as consumers. Among these are a few trends that we saw (and continue to see): The first are e-commerce challenges driven by the pandemic. These create significant issues in terms of order volumes, customer demands, and much more. The second is disruption caused by the shortage of goods. And last but not least, urbanization as a trend is changing consumer buying habits.
Khan: Yes — a common example is ordering a new car at a dealership and being told it will take 18 months to deliver. But, beyond these discrete disruptions, buying habits have fundamentally changed. I myself am a good example: I do 90% of my shopping online — for myself and for my family’s needs. I have no desire to drive to the store or a shopping mall anymore. All of that puts extreme demand on the supply chain, especially considering 60% of global consumers expect same, next, or two-day delivery. Therefore, in Dematic, we have a partner with decades of experience and success in developing solutions to address these customer challenges. Together, we can fortify the future of supply chains. With Google’s open, clean cloud and unified data platform, Dematic customers can prepare themselves for future disruptions.
Bharde: I think Samrah summed it up very well. Speaking from the Dematic perspective, our customers are facing fulfillment challenges brought on by e-commerce, increasing order volumes, and dynamically changing demands — all while the complexity of order profiles continues to increase. Add to that supply chain disruptions, and that’s a lot for our customers to handle. We know this from our own consumer experience — we all want our orders to be delivered immediately, if not sooner. The recent pandemic has accelerated these challenges, and they are here to stay as part of the new normal. To solve these challenges, our customers require solutions and products that are adaptable, flexible, and scalable.
Bharde: We have thought long and hard about what is required to make the transition into future solutions and what we realized is this: We must be very careful to design solutions that rely on cloud software, artificial intelligence, robotics — things that weren’t traditionally part of mechatronic solutions. That’s where we started exploring to deliver the best customer experience.
Bharde: Early on, we discussed a partnership with Google Cloud for a couple primary reasons — the first being Google’s expertise in cloud technology, which will help accelerate the technology and growth strategy that we already have. The other is that partnering with a company like Google Cloud is a game-changer for our industry. Google Cloud is at the forefront of machine learning, AI, and data analytics. Google Cloud can help us power our traditional offerings in a way that hasn’t been done before. What was particularly nice with the partnership is how well our technology and business plans aligned with Google Cloud’s roadmap. The focus lies on a data-driven supply chain. It will all lead to optimizing supply chains beyond the four walls of individual facilities to create a true end-to-end ecosystem. And that’s what is so exciting about working with Google Cloud.
Bharde: This is a good question because it is so exciting to think about it. The first thing that comes to mind is that we are going to be able to solve super-complex problems for our customers. We will be able to provide our customers with better supply chain predictability, visibility, and flexibility so they can achieve their operational and business targets. With Google Cloud as our partner, we will also enhance our ability to solve for emerging trends in digitalization and e-commerce to really get to the core of helping our customers maximize their profitability. And do all of this in a way that delivers the best customer experience with speed and scalability.
Bharde: Absolutely. With cloud-native solutions, we will be able to deliver software services without disrupting customer operations. It’s a game-changer for our industry to be able to provide an update or a release while their operations are running. Also, today we think of warehouse management, but through our services we will be able to transform warehouse management to warehouse operations. Better yet, warehouse optimization.
Khan: Exactly. Dematic’s warehouse optimization extends across a company’s entire operations. The future of supply chains will be data-driven, there is no way around it. Over the last 10 years, the amount of data available has grown tremendously. The trick is to first slice and dice it, and then use AI to break down the silos. This will allow Dematic customers to move away from a more brittle supply chain to one that is sustainable and resilient.
Khan: When we talk to organizations, they're looking for primary capabilities from us to accelerate their digital transformation — together, they form a transformation cloud:
- Data-cloud with added intelligence
- Open infrastructure cloud that gives them freedom
- Collaboration cloud that creates connections with partners, customers, and supplier networks
And we do all this all while supporting their ambitious sustainability goals.
Khan: Google Cloud is already helping our customers to a carbon-free future to ensure supply chains are resilient and do not falter easily. The work is focused on how to predict risks and how to trigger alerts. This extends to material flows and warehouse operations as well as profitability.
Bharde: Dematic’s sustainability vision is based around people, processes, and products. The Google Cloud partnership will allow us to elevate data for each of these in a way that previously was not possible. We view sustainability as kind of a closed-loop process. Because, if you think about it, it starts with sustainable and thoughtful design and goes all the way into and through product lifecycle. So we can address more holistically questions like “What do we do with waste, and how can we reduce it?” and “How can we improve worker safety?” The Food & Beverage industry provides an excellent example of how optimizing operations goes hand-in-hand with improving sustainability. Consider mixed pallet density — data-driven automation can ensure more products can be packed onto fewer pallets. Fewer, more efficient pallets mean fewer trucks necessary to transport the pallets, which means fewer total trucks on the road and a healthier planet.
Khan: For us, we look at industries at a macro level. If we want to build a more sustainable supply chain, we need to predict demand accurately to optimize inventory and replenish accordingly.
Khan: Absolutely! And Google Cloud has a big role to play here. With unexpected events, being able to predict inventory risks makes an enormous difference for our customers and our partners. With our partners, we can enable data exchange on a large scale and build a circular economy. If you look at the world of data, everybody thinks about data in three categories:
- Data that our customers have and own (private data)
- Data that comes from interactions between our customers and their partners (community data)
- Data that is circumstantial — for example, weather (public data)
By leveraging the power of each data category with a single platform (combined with Dematic’s warehouse automation expertise), we can help customers better anticipate their future supply chain issues.
Bharde: If you look at Dematic’s portfolio, we have an entire solution catalog for e-commerce, designed to deliver order fulfillment by handling complex order profiles, reducing cycle times, speeding up order fulfillment rates. This is what these solutions are designed to do and have been doing. But now, with Google Cloud’s partnership, it’s going to make our solutions capable of solving even more complex problems. Retailers and manufacturers are looking to decision support capabilities and fully autonomous performance to survive and thrive. With our cloud-enabled portfolio, we will provide a greater blend of fixed and autonomous mobile solutions that use AI and ML to improve orchestration of warehouse resources and performance. Only 20% of the world’s warehouses are currently automated. So, there is a huge opportunity now for even semi-autonomous warehouses.
Khan: We always look for alignment with our customers and partners when it comes to our core values and culture, which include people first and always leading with empathy. Warehouse automation is taking a new meaning, and Dematic is at the core of leading that change by putting customers first. Google Cloud is proud to partner with Dematic in this journey.
Bharde: I agree. And looking toward the future, the fact is, supply chains are in desperate need of transformation. What I mean by that: Today we are very much focused on intralogistics, optimizing material flow within a warehouse. But we are gradually pivoting to supply chain execution where we are optimizing to some level commerce and logistics of entire enterprises. The aspiration is to get to that supply chain optimization by leveraging a data ecosystem.