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Home » you can get what you want
equipment & applications

you can get what you want

February 1, 2007
Peter Bradley
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By their own account, conveyor buyers are a pretty demanding bunch. When asked in a recent survey whether they were looking for speed, reliability, safety features or quiet operation, their answer was, in a word, yes. It's safe to assume that this isn't a population that's been agonizing over the tradeoffs between, say, speed and noise levels; the DC VELOCITY readers who answered the survey, which was conducted online last fall, have simply decided they want it all.

Not only do they want it all, but they also want it at a low price. When asked to rank various conveyor selection criteria, the survey respondents put purchase price and return on investment (ROI) near the top of the list, behind only reliability and functionality. (See chart.) Bill Hawthorne, vice president of conveyor manufacturer Hytrol, summarizes the situation this way: "Customers want equipment that will run faster and last longer—and not cost an arm and a leg."

Vendors tighten their belts
Those demands are putting the squeeze on conveyor manufacturers, which are already feeling the pinch of rising manufacturing costs and mounting research and development expenses. But in a market where competition remains fierce, buyers have little incentive to scale back their demands. "It is very definitely a buyers' market," says Leon Kirschner, president of TGW-ERMANCO, a material handling components and systems manufacturer. "There is substantial overcapacity in the conveyor world. It seems as though people who buy conveyors are able to demand more than they ever have in the past. There is a tremendous amount of price pressure."

At the same time, the demands on performance are escalating, Kirschner says. "We are scrambling to make equipment that is quieter and faster with greater throughput. Safety is a big issue. Another big issue is ergonomics." Customers, he says, want equipment that reduces lifting and other stresses that can lead to workers compensation claims. "Companies like ours have to be more innovative and have to outengineer the competition rather than trying to out-price the competition."

The continuing pressure to provide better, safer and more reliable equipment at a lower cost has led some manufacturers to take a closer look at their own manufacturing systems. Hytrol, a large conveyor maker based in Arkansas, is a good example. The company has rolled out a program for implementing lean principles in all of its operations.

"We've gone into a full-blown lean manufacturing mode to be more efficient, to get product out the door faster, but at the same time maintain quality," says Hawthorne.

what buyers want Focus on total cost
Though price is never far from buyers' minds, manufacturers say some customers take a more enlightened view of it than others. Kirschner, for example, divides conveyor buyers into a couple of camps. "There are two types of customers," he says. "There's the sophisticated customer who thinks about the total cost of ownership and the less sophisticated customer who is not concerned about total cost, who says, 'Let's get an auction going.'"

But that may be starting to change. Several vendors report that they're encountering the auction mentality less often than they once did. Tim Kraus, a conveyor product manager at FKI Logistex, a large material handling equipment manufacturer, says he's seen more emphasis on total cost of ownership in recent years. "We see a shift away from purchase price toward total cost of ownership," he says. "Purchase price is important, but there is more emphasis on durability, mean time to repair, ease of maintenance, and reliability of the equipment. There is more emphasis on ongoing maintenance and how to minimize it."

Bill Hawthorne of Hytrol agrees. "Customers are becoming smarter about conveyors," he says. "They understand that speed has a lot to do with wear and tear and that you need the best components. They are looking for throughput. That's a big difference [from] the commodity buyer."

Kraus adds that he's also noticed a trend among buyers to approach suppliers with requests for a solution to a specific problem rather than requests for a particular piece of equipment. "They are not coming to us saying they need a belt-driven accumulator with photo eye sensors," he says. "They are coming to us with a problem and asking us to come up with a solution, keeping in mind the total cost of ownership."

Less is more
But that emphasis on total cost of ownership is also creating engineering challenges for manufacturers. Kraus, for example, says his company is constantly working to find ways to cut down on repair times and extend maintenance intervals. "The feedback from some large DCs," he says, "is they don't want preventive maintenance scheduled for any less than 60 days."

For a manufacturer, that translates to a demand to develop more rugged and reliable components with fewer moving parts. "We're trying to get away from chain and oil or anything that needs to have the tension continually rechecked," says Kraus. At the same time, he says, the company's engineers continue to work on ways to lock in photo eye alignment and maintain belt tracking.

Del Deur, manager of design engineering for TGW-ERMANCO, says his company is taking the same tack. "We are working toward simplicity," says Deur. "Fewer moving parts means a conveyor with higher reliability and one that is quieter. Our number one priority is to get the number of parts down. That is the vision. Simplicity is the way to go, but it is easier said than done." He explains that reliability is a particular concern for smaller DCs that have no maintenance staff.

TGW-ERMANCO Vice President Gordon Hellberg adds that reducing the number of moving parts also offers savings in installation and power usage and means lower repair costs.

At the same time, the need for flexibility in DC operations resulting from the development of agile supply chains has presented manufacturers with an additional challenge. Conveyor makers report that they're fielding more and more requests from buyers who want equipment that's easy to reconfigure as their operations change gears. "More of our customers are classifying themselves as having the potential for reconfiguration," Kraus says. "In that respect, we're trying to make things as modular as possible so that components can be unbolted and reconfigured."

They want it now!
If today's conveyor buyers have become more demanding, manufacturers say they've also become less patient. They expect fast turnaround on their orders, which creates additional headaches for equipment makers. "Our system delivery lead times are getting shorter and shorter every day," Kraus says. "Large systems used to have a turnaround measured in months. Now it's measured in weeks." That makes it tough for manufacturers to balance the work flow in their plants, he explains. "It becomes more difficult if we have several big jobs going on at the same time."

Hawthorne says that in response to the demands for fast cycle times, Hytrol now pledges to get its standard equipment out the door within four weeks of an order or it will pay the freight costs. The company is now looking to expand the program beyond its standard equipment, he adds. "We're pushing to even get our engineered products out the door faster."

Material Handling Conveyors Business Management & Finance
KEYWORDS FKI Logistex Hytrol Conveyor Co. Inc. TGW Systems Inc.
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Peterbradley
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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