September 17, 2014
technology review | Lift Truck Technology

Bobcat excavates productivity, inventory improvements

Bobcat excavates productivity, inventory improvements

The construction equipment company makes heavy-duty gains in lift truck driver productivity and inventory accuracy with the help of some new technologies.

By Peter Bradley

Bobcat's compact but powerful loaders, excavators, and other types of landscaping, construction, and industrial equipment are pretty much ubiquitous during construction season. Nearly all of those products flow out of Bobcat Co.'s main production facility in Gwinner, N.D. The 800,000-square-foot manufacturing campus includes three warehouse buildings that range in size from 25,000 to 50,000 square feet. Production materials, which include large steel coils and subassemblies from other Bobcat facilities in North Dakota and Minnesota, pass through those warehouses on their way to manufacturing.

Donnie Herbst, Bobcat's strategic materials manager, says the warehouses handle about 40 truckloads of inbound materials each day—about a thousand skids in total. And keeping track of all that inventory in a fast-moving operation had become a vexing problem for the company. Its inventory management practices could no longer keep up with the rapid flow of materials.

"We had a significant amount of error in trying to locate product," Herbst says. "We had used a gatekeeper or check-out philosophy, but humans make mistakes." Essentially, the company relied on forklift drivers to report where they had picked up or dropped specific pallets. But pallets were often not where they were expected to be, and quantities were sometimes incorrect. "We were looking for a solution that would take out the human error," he says. With some 4,000 slotting locations in the warehouses, the manufacturer needed a robust system for keeping accurate real-time data on every pallet.

Bobcat ruled out the use of radio-frequency identification (RFID) tagging. Previous experience with automated guided vehicles had shown that the radio-based technology would not work reliably in the Bobcat warehouses. "We knew that the volume of steel in the facilities would lead to inaccuracy or lost signals," Herbst says. What the company needed, he adds, was something visually based.

The company found the solution it sought in SmartLIFT technology from Swisslog. SmartLIFT (an acronym for Smart Labor, Inventory, and Forklift Tracking) is an integrated software suite that generates business intelligence by processing "traditional" warehouse management system (WMS) or labor management system (LMS) data with "new" data collected via sensor technology powered by TotalTrax Inc. A.K. Schultz, Swisslog's vice president responsible for the SmartLIFT product, puts it this way: "This is where big data meets forklifts. We have taken WMS data, combined it with telemetry from sensors, and created all-new dashboards and algorithms that never existed before."

An extension of Swisslog's automated material handling solutions for warehouses and DCs, SmartLIFT essentially serves as a real-time location system designed for indoor use—you could think of it as an "indoor GPS." It combines a number of technologies into a system that provides information on current lift truck speed, location, and direction—information that is accurate to within an inch, the company says—and data capture tools that can deliver accurate location information on every pallet handled.

As for how it all works, Sahil Patel, Swisslog's program manager for SmartLIFT, explains that the tracking system relies on 11- by 11-inch 2-D bar codes affixed to the ceiling of the warehouse. Mounted on the roof of each SmartLIFT-equipped lift truck is an infrared optical position sensor that determines the vehicle's location by scanning the overhead bar codes. The sensor needs a visual line to only one of those bar codes to establish accurate location information. Between the lift truck masts is an optical label reader, which allows the lift truck driver to automatically scan a pallet label. Also mounted to the forks are a lift height sensor and a pallet detector. All those tools feed information in real time through a terminal mounted on the vehicle to an enterprise resource planning (ERP) system or WMS.

Patel says the system provides a number of advantages. Because it links forklift movement with the data on the pallets, the system tracks inventory movement as well as forklift movement. Once the pallet is scanned, its real-time location information is captured and updated.

SmartLIFT is also designed to boost driver productivity. Patel says the automated scanning saves drivers time by eliminating the need to manually scan a label with a radio-frequency (RF) gun and in some cases, to dismount from the truck to scan a pallet. Swisslog estimates the system can improve driver productivity by up to 30 percent. That's crucial, because drivers represent about 77 percent of lift truck operational costs, according to data from Crown Equipment Corp. provided by Swisslog.

Bobcat deployed SmartLIFT on 25 of the more than 100 lift trucks at the Gwinner manufacturing facility. Those are the vehicles used in receiving and putaway, and for ferrying pallets to a kitting area. They are about evenly split between 3,000-pound stand-up trucks and 6,000-pound propane vehicles. The system became operational in May.

In daily operations, the information captured from the pallet labels feeds directly into Bobcat's ERP system, which then directs drivers to storage locations. This allows the company to keep similar products close to one another. That's important because most of the palletized goods are destined for a kitting area, where goods are depalletized and assembled into kits bound for manufacturing locations.

As for the transition, Herbst says that training drivers proved relatively easy. "We had no significant issues," he says. "With a day's instruction, people were able to do runs that were 100-percent accurate. It is a very intuitive system."

So how is it working out? By all accounts, SmartLIFT has produced the improvements that Bobcat had been looking for. In the few short months since the company began using the system, driver productivity has risen by between 25 and 30 percent with near zero mis-location of pallets.

On top of that, the operation is benefiting from better information. "We've seen a significant improvement in inventory accuracy," Herbst says. "I don't know the last time something wasn't where it was supposed to be." He says it's difficult to assign specific numbers to SmartLIFT, but he credits the system with much of the improvement. He has told Swisslog that the system is trending toward an 18-month return on investment.

Bobcat is already expanding the use of SmartLIFT technology to other facilities. Herbst says the system will enable managers to see inventory moves at all of those sites as well as at Gwinner. "We'll be able to track goods dock to dock. That will be a huge advantage that we don't have today."

About the Author

Peter Bradley
Editorial Director
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.

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