This year marks the 50th anniversary of the Institute of Logistics and Warehousing. Half a century of the company’s operation is a perfect time for summaries. How do you assess the current situation in the logistics market in Poland, what do you consider the Institute’s greatest success, and what future do you see for it?
Grzegorz Szyszka, Director of the Institute of Logistics and Warehousing: 50 years ago, the Central Center for Warehousing Economy (COGM) was established in Poznań as a substantive support for the State Reserves Office (URP). Why in Poznań? Because a warehouse for sanitary articles operated here for the needs of the Office, and there was a need to determine the storage durability of the stocks stored there. During its 12 years of operation, the Center also dealt with the restructuring of the national warehouse base to adapt it to the needs of a centrally planned economy and set national standards in the field of warehouse technology and equipment.
In 1979, as a result of the rapid development of scientific staff and the high level of research and development work, COGM was transformed into the Institute of Warehousing Economy (IGM), which for 11 years of its operation shaped organizational and technological solutions for warehouses and storage bases. During this period, over 500 service and implementation works were carried out in the field of warehousing economy and storage durability testing. In 1990, along with the political changes in the country, the Institute underwent profound transformations, also related to obtaining the rights to assign barcode numbers to Polish companies, mainly for the needs of foreign and domestic trade. Along with barcodes, the Institute’s interests expanded to the area of automatic identification of goods.
In 1994, when “logistics” promoted by the Institute as a free-market concept of economic functioning began to gain importance, IGM changed its name to the Institute of Logistics and Warehousing (ILiM). At that time, the Institute’s work was focused on typical logistics issues related to the organization and management of material and information flow in enterprises and supply chains.
The turn of the century brought further challenges related to the development of the electronic economy. In 2003, the e-Economy Center was established at the Institute, which develops a new research area concerning the electronization of processes in administration-business (G2B) and business-business (B2B) relations. Currently, new tasks are emerging for the Institute related to acting as a national competence center in the field of digital transformation of logistics. They fit into the fourth industrial revolution, “Industry 4.0”, which is currently beginning in the world.
Milestones in the activities of ILiM
From the point of view of the Institute’s current position, a breakthrough event was the admission of ILiM in 1990 to the international organization managing the GS1 barcode goods identification system, which was associated with the task of implementing this system in Polish enterprises. For the Institute, this also meant access to global knowledge resources related to supply chain management and logistics. All this coincided with the beginning of building free-market structures in Poland, which opened up opportunities for the Institute to develop logistics concepts and solutions functioning on the free market. Another important moment was Poland’s accession to the European Union in 2004, which enabled the Institute to participate in numerous research and development projects co-financed by Brussels. The implementation of a large project related to the simplification and electronization of business registration processes in Poland, carried out since 2008 as part of EU structural funds, proved to be very fruitful. This opened a new chapter in the activities of ILiM, related to the electronization of public administration services aimed at enterprises. The result of this is, among other things, the co-creation of the Polish information and service portal for enterprises, biznes.gov.pl, which supports the establishment and conduct of business activities.
Greatest successes and the future of ILiM
We are currently in a breakthrough period of our activity. This is related to the fourth industrial revolution, “Industry 4.0”, taking place in the economy – the digital transformation of the economy. Fortunately, ILiM has been dealing with the electronic economy for 15 years, mainly in the field of automatic identification of goods and location, as well as electronic communication in supply chains. It therefore sees an opportunity for itself to be a key competence center in the field of digitalization of the Polish economy. This involves creating solutions for cyber-physical systems that connect machines, processes, and products into self-steering “intelligent networks”. Within these networks, cooperating intelligent factories exchange information with partners, suppliers, and distribution and service networks in an automated manner in intelligent supply chains. Due to the nature of these connections, logistics and the electronic economy are essential elements of the coming changes. ILiM would like to support the ongoing changes as a profiled Industry 4.0 competence center, whose goal will be to support domestic enterprises (SMEs) in developing and adapting digital technologies in supply chains. Of course, we must deepen our knowledge in technologies such as: Internet of Things (IoT), Big Data, Cloud computing, or mobility.
We plan to focus our research tasks on creating digital platforms that integrate logistics processes of enterprises and supply chains, mainly using the Internet of Things. An important issue for us is the development of the digital market (e-Commerce), including removing restrictions for multi-channel distribution and online transactions. We also intend to continue digitizing administration (e-Administration) in terms of creating new models of digital public services for the needs of enterprises (A2B). To meet these challenges, we must keep up with global technological progress, we must cooperate with leading partners from science and industry in creating new advanced solutions, and we must develop the competencies of our employees. Our future will depend on resources – material, intellectual, but above all human. We believe that interesting work awaits us and our successors, passionate challenges bringing satisfaction and rich profits.
Current condition of logistics
The processes of globalization, internet trade, and digitalization of technology are very strongly intertwined with what logistics deals with. The greatest driving force is the growth of consumption and online shopping. The sale of goods via the Internet is growing dynamically at a rate exceeding 15% per year, and the growth potential is very large. Poles make an average of 5 transactions per year on the Internet, which places us at the tail end of European countries, where the average number of transactions is almost 16 purchases per year. Also, the share of online sales in total sales in Poland in 2016 was 3.5%, with a global average of almost 7.5%. It is projected that in 2020, e-commerce will account for 45% of total sales revenue in Europe. A critical link in the development of e-commerce is logistics, which is responsible for the time and costs of delivering goods to consumers. A current challenge is Same Day Delivery using digital technologies (Internet of Things). Also, the logistics strategy – “on demand” – on time and place, in the right quantity and assortment – has become an inspiration for programming artificial intelligence, optimization algorithms for production, transport, and warehouse processes.
The condition of Polish logistics is also evidenced by the development of warehouse space. The dynamic development of commercial warehouse space, which began in the mid-90s, caused Poland to become the 8th largest warehouse market in Europe in 2017 with resources of 12 million sq m, and it ranks second in growth dynamics after Germany. In this context, it is clear that the importance of logistics is constantly growing and it is becoming a strategic factor in the functioning of enterprises and economies, determining their competitiveness.