The essence of innovation

As old technologies reach their limits, innovation is the key to future success. The logistics industry is changing at a tremendous pace. What approaches are most suitable in order to find solutions? Six key players investigate the future of logistics from different perspectives, explain their views and previewthe future drivers of the industry.

The essence of innovation
“The question of what a truck will have to accomplish in ten years’ time is very exciting.”

The participants in the round table (from left to right): Michael Pfeiffer, personally liable managing partner of BPW; Torsten Schubert, head of BPW Mechatronics; Theresa Hoell, engineer and BPW Talent Programme attendee; Dr. Stefan Hörster, head of sales at BPW subsidiary Hesterberg; Carmen Ohler, product manager at BPW subsidiary idem telematics; Birgit Heitzer, head of logistics at REWE Group

Over the years, the commercial vehicle industry has developed only slowly. Innovations are necessary. But what is innovation?

Michael Pfeiffer: Innovation is the process of change towards something new, something better. Whether in art, sports or medicine, innovation is taking place everywhere, often aided by new technologies. For us as a company, it is imperative that we facilitate innovation in order to achieve sustained growth. We don’t view innovation as a trend but as a clear opportunity for long-term success. We use innovations to fulfil the needs of our customers and thrill them with new solutions.

Torsten Schubert: Being close to customers is paramount. An innovative idea is not necessarily successful. It must also be marketable. Thanks to new technologies, we can solve problems faced by our customers in new ways. This is only possible if we think along new lines, if we think innovatively.

Carmen Ohler: Without innovation, there is no tomorrow. While innovation ensures continued success, it is subject to ever shorter cycles. Five years ago, we wouldn’t have been able even to imagine many of the technological possibilities of today. By the same token, we don’t know what technologies wait us tomorrow. What we do know is that we have to be quick in adopting and making use of new technologies. To do so, we have to leave behind old processes and habits, and have curious minds.

Birgit Heitzer: From a business perspective, I can only confirm these statements. We must learn to think and act in new dimensions. This is the only way for us to overcome present and future challenges. We are taking this path together with and for our customers. We are not just responding to trends but we are setting them too. These are success factors for the REWE Group.

You are all industry insiders. In your opinion, what are the trends in logistics? What challenges can be overcome through innovation?

Theresa Hoell: The megatrends for the industry are certainly e-mobility, the development of alternative drives in general, as well as globalisation. In the cities, there will be an increasing number of alternative models for logistics, such as delivery by drones or robots, which are still at a very early stage.

Birgit Heitzer: With regard to logistics, e-commerce is a big topic. In food retailing, we are forerunners in this respect. This means that we have, by necessity, ventured into uncharted territory. Delivering groceries to consumers’ homes in city centres, including items that require constant refrigeration, places entirely new demands on logistics. And because e-commerce is developing in a revolutionary rather than evolutionary way, this new situation has emerged virtually overnight.

Dr. Stefan Hörster: It is true to say that the challenges of the future are highly diverse because modern logistics is influenced by many technological developments. From robotics to the Internet of Things (IoT), innovations are already changing numerous processes. Machines are communicating with each other and vehicle loading processes are being automated. Intelligent networks are increasingly calling into question the conventional view that freight volume is the sole factor for success. The major challenge in this exciting process of change will be to reconcile the various new technologies with one another.

Michael Pfeiffer: Drivers such as e-mobility or digitisation have swiftly triggered enormous change. Automation is transforming our processes, increasing efficiency and improving our performance. However, this progress is also placing new demands on us as a company. We have to train our employees so that they are able to handle the increasingly complex tasks. This isn’t so much a straightforward redistribution of jobs away from production, but a new positioning for digital processes.

Torsten Schubert: Complexity is a key term. We need people who can handle complexity. I’m sure that traditional job profiles will continue to dissolve and that technical intersections will emerge. This process has already begun and calls for curious minds to shape it. To that end, we have to provide the technical qualifications and also establish a new approach to creativity. Innovation also necessitates a cultural change.

Michael Pfeiffer: I quite agree, but I would also like to stress the need to formulate our response to these challenges with the appropriate respect and appreciation. Despite the ultimate focus on results, the courage remains as significant factor, especially with respect to innovation. The innovation processes that we have set in motion clearly demonstrates a desire not to bypass people. We are thinking holistically: we shape the market not as a separate entity, but together with all other market players. We are all part of a network.

The essence of innovation

Does networking at the technical and process levels already influence your work routine, or is this still a far-off vision?

Carmen Ohler: There’s no doubt that we’re right in the middle of it. Digitisation isn’t just a megatrend but the central topic of the transport and logistics industry. The digital world already gathers an incredible amount of data from a wide variety of sources. It is now important to meaningfully connect and analyse these data. If we can draw the right conclusions from this information, we can optimise processes for our customers, or even design new ones.

Michael Pfeiffer: Massive quantities of data are still relatively new to us. We can only process the information to good effect if we also think in terms of processes, identify the best possible use for the data, and ensure data security. The transition to aligning our thoughts with processes is already underway. But we should never lose sight of the fact that people are creatures of habit and seek harmony. Change is all too often experienced as conflict. The market is transforming at a rapid pace now, and we have to adjust with the same rapidity. To see innovation and change as an opportunity rather than a threat – that is what we have to learn. The younger Generation Y already has a completely different relationship to technology. Just look at what they get out of their smartphones.

Theresa Hoell: In this context, it is interesting how many generations meet at BPW. We have a heterogeneous structure that brings together a great deal of know-how under one roof. To have innovation and experience working hand in hand is an important prerequisite for lasting success, and at the same time an enormous challenge. The key tasks here are networking and knowledge management. BPW facilitates future-oriented working – from agile working methods to the Innovation Lab and advanced training measures that are entirely forward-looking.

What do you consider important to keep one step ahead of the market?

Dr. Stefan Hörster: Individual industries tick in very different ways: 24-hour or even same-day deliveries are already commonplace for end customers. The existence of these options in the B2C segment will inevitably trigger similar demands among business customers. Expectations rise in keeping with the degree of feasibility.

Michael Pfeiffer: As the market reinvents itself, all the market players will need to re-assess their own roles. Accordingly, we must also find new ways of cooperating and accept new partners, such as policymakers, who are becoming more relevant due to environmental requirements. Curiosity and innovation are the new drivers. We need new technologies, but at the same time we must remain close to the needs of our customers in order to make meaningful use of these technologies. These two aspects are interdependent.

The essence of innovation

Carmen Ohler: I see it the same way. For our customers, the emphasis is on improving their respective business processes. The question of what a truck will have to accomplish in ten years’ time is very exciting. Today finding the solutions for tomorrow, that is the challenge. Here, major determining factors include the speed of innovation, technological possibilities and environmental requirements. It is therefore essential that we abandon traditional working methods so that we are able to respond flexibly. We are well prepared thanks to our newly introduced agile working methods. They facilitate the delivery of partial solutions within just a few weeks; gone are the days when we waited months for a status update on a development that had already become obsolete.

Can you give us some examples of solutions that already fulfil the requirements of tomorrow?

Theresa Hoell: Demand is currently developing far more quickly than the technological solutions. Product features, product safety, availability – everything has to fit. It’s a fine line to tread. A good example is electric mobility for commercial vehicles. Municipal commercial vehicles should have been retrofitted long ago, not least for the knock-on effect. However, many of these vehicles are costly conversions and cannot be easily replaced. Our solution to this dilemma is the eTransport electric drive axle. Here, it’s not the vehicle that’s replaced, but only the axle.

Dr. Stefan Hörster: Another example is belt sensing, with sensors on the lashing belts indicating any changes. This increases payload security and allows for a full status report. Belt sensing is even more interesting when it comes to self-driving trucks. This solution, which is already available, certainly fits the bill.

Torsten Schubert: There are a number of very positive developments within the Group that will have a further impact on logistics. In general, it is important that developments are tested and assessed not only in the laboratory, but also on the road. That’s why we specifically work together with customers in pilot projects, which is something we are planning to intensify. Using data collected on how drivers act at the wheel, we can later determine which tyres or axles are best suited for safe, economical operation. We are also thinking about preventive maintenance in this context.

Birgit Heitzer: Because our stores are often located in urban areas, the REWE Group is working on new ways of relieving the burden on city traffic. From the point of view of logistics, we have to deal with difficult infrastructures and numerous restrictions. The nighttime logistics tests that we conducted together with the Fraunhofer Institute were very promising. This is actually something of a pet project for me because it involves moving the two key levers: firstly, promoting e-mobility, and secondly, avoiding peak hours. But I’m a realist. There’s a long way to go from a test to a comprehensive solution. Approvals granted by single cities and municipalities remain individual decisions. This means that we are dependent on cooperation. Nevertheless, nighttime delivery is a flagship project for which we are campaigning, because it helps to effectively relieve the burden on city traffic.

The essence of innovation

Carmen Ohler: Good solutions are created when we put ourselves in our customers’ shoes. cargofleet Trailer Gateway is a flexible telematics solution developed by idem telematics that is easy to install and can be extended individually. The technological innovations of the hardware are less important to our customers than the information that can be generated and processed, as well as its simple application. With this in mind, we offer an app that instantly makes the relevant vehicle data available in the driver’s cab, and a portal with many customisable functions. We always take a broader view and deal with topics such as predictive maintenance or upcoming mobile telecommunications standards. Our outline conditions are changing rapidly. We aren’t talking of years, but of months. This is our new benchmark.

What is the basis for new solutions?

Michael Pfeiffer: Our task is to illuminate the entire process. It makes no sense to look at individual steps of this system and disregard the overall process. Thinking in processes – this is a new approach, with new stakeholders and partners. Today, our view goes beyond vehicle manufacturers to include vehicle operators, drivers, consignors and their customers. At the same time, we have to change our point of view and put ourselves in our customers’ shoes.

Dr. Stefan Hörster: What’s certainly interesting in this development is that previously separate disciplines are merging. One example: today, IT companies are successfully manufacturing electric cars. We have to become much more courageous and change our approach, away from purely cost-driven considerations and existing departmental or industry boundaries.

Where are these developments leading, and how might the future look?

Carmen Ohler: What’s certain is that city traffic must and will change. This is evidenced by many developments, such as online commerce, access restrictions and e-mobility. Data analysis plays an important role in responding to these trends. On the cargofleet 3 portal, customers can view the relevant data and evaluations in a user-friendly form. There is a standardised interface for customers who have their own portals or transport management systems (TMS). This flexible approach represents a crucial advantage because it enables us to find the right solution for every customer, tailored to the company’s diverse and sometimes highly individual telematics applications. The growing number of applications, which by the way are also being driven forward by ideas from start-ups, is a very interesting trend that we are actively taking up.

Torsten Schubert: From the perspective of mechatronics, data analysis will simplify the future. Today, we are working flat out to generate data. This need will no longer exist in the future because the data will be available, and in incredible quantities. This opens up new areas of application. Infrastructures may eventually be self-controlled – with vehicles communicating with traffic lights, for example.

Michael Pfeiffer: We will experience digitisation in a far more pronounced form. Automation will increase, transforming further areas of work. It is vital that we address these changes and ensure that our teams are appropriately qualified. We will shape innovations and shoulder responsibility for a livable future, including environmental and social aspects. The BPW Group is well positioned for the challenges that await us, and that’s why we look to the future with a positive mindset.