Christophe Lautray (FEM): «Intralogistics will generate 50 billion euros of turnover in Europe in 2016»

Published on by Jennifer ABIJABER - updated on

Christophe Lautray, vice president of FEM.

An interview with Christophe Lautray, vice-president of FEM (European Materials Handling Federation) who explains that, in the area of automating logistics warehouses, France is running neck-and-neck with Germany.

How is the intralogistics sector doing on a European level? 

It is growing fast, according to the 13 national associations of equipment manufacturers who make up our membership. Stretching across the European continent as far as Turkey and Russia, they generate nearly 160,000 direct jobs and should report more than 50 billion euros of turnover in 2016. On the ground, their leading customers are industries of all types, but also distributors and retailers, whether business to business or consumer retail like e-commerce, and also logistics firms. Regarding sales, while telehandlers continue to be very popular, the sector has particularly benefitted from the very enthusiastic demand for automated systems. Quite simply, this year, and every year, the manufacturers working in this niche segment are likely to report two-figure growth. 

Where does France stand in the automation race?

It’s running neck-and-neck with Germany. While it would be truthful to say that in relation to France, its neighbours across the border have four times more industrial robots in operation, the vast majority of their machines are aimed at industry. Indeed, the popularity of automation is quite new to the supply chain. And so now it’s the turn of the logistics sector to start getting kitted up, which will take at least 10 years to complete. Between now and 2030, all countries in Europe can seize their chance and take over the leadership in this matter. 

So will these warehouses be automated to 100%?

Not necessarily, because not everything can be automated. The first limitation is technology. On paper you see lots of things being said. In the media, for example, you hear about logistics drones… but you mustn’t overlook the fact that these aircraft are only prototypes at this stage, and are a long way from becoming widespread in warehouses. For the time being, even the most effective systems can come up against the complexity of the flows of materials that they see passing through. This load diversity is the main problem for generalist distributors. For example, those who have hundreds of millions of articles of all sorts to manage. Basically, the more different products there are to handle, the harder it is to automate.

What’s more, not all processes are actually suited to automation! To make economic sense, an automation policy has to adhere to an objective of profitability. Specifically, this means obtaining return on investment (ROI) of less than 5 years. As a result, what firms automate as a priority is conveying over short distances, order packing systems, storing and retrieving items. We are more in a logic of semi-automation of logistics warehouses. 

Technology isn’t the only obstacle to growth...

Correct: there is another one which is on a human resource level and it’s a problem that clients face. Because to support the development of intralogistics systems; they need increasing numbers of qualified engineers in the fields of robotics, network connectivity and Internet of Things. And yet currently there isn’t enough supply to meet demand. Order principles are in their majority confronted with job applicants who do not hold the required qualifications. 

How can we solve this?

By increasing the appeal of our sector so as to attract talent. Quite often, the engineers we need are not aware of logistics. And they are also more naturally drawn towards areas which initially appear more attractive such as humanoid robots for example. Our role at FEM is to get them to appreciate industrial robotics. This is one of the big challenges that our sector has to meet in the coming years. 

What other challenges are there for materials handling manufacturers? 

Over and over again, improving working conditions for operators. This is the central pivot on which intralogistics innovation in general hinges. Whether it is about automating conveyors or storage warehouses, the ultimate aim is to make order packing less painful and more efficient. 

In the end though, won’t automation put operators out of a job? 

There is no direct link between unemployment levels and automation. We can see this when we observe Germany, which has only 5% unemployment whereas it is the most highly-automated country in Europe. In the short term, yes, you end up replacing a manual task by an automated task… But it is positive in the long term because firms become competitive, so they invest, so they create jobs. It’s a virtuous circle. 

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