You're in good company. Even the leading-edge DCs are shying away from the revolutionary in favor of more traditional equipment that's better, cheaper and faster and increasingly controlled by computers.
When it comes to creative robotics, material handling engineers, not action picture screenwriters, are the true visionaries. At the latest Council of Logistics Management conference in Chicago, attendees were wowed by brightly colored animations of robotic inventory handling systems that would make a James Bond movie villain green with envy. But the visioneering aside, there have been few revolutionary developments in DC technology in recent years. Despite the hype surrounding the potential benefits of radio-frequency identification tags, for example, the chips have had limited acceptance as an inventory handling device.And advanced robotic systems, while impressive, are still beyond the budget of all but the largest manufacturers.
What's generally happening in leading-edge DCs is the same as always—only better, cheaper and faster. And increasingly controlled by computers. "The whole material handling industry is evolving," says Don Derewecki, a consultant with Gross & Associates in Woodbridge, N.J. "RFID has been around for a while but hasn't gained critical mass because of the costs and lack of … standards. Robotics able to handle materials automatically have been around since the '60s.What has actually happened is the controls for them have become more flexible, sophisticated and cost-effective. It's the same thing with automatically guided vehicles. They've become more flexible, with a broader range of applications and better integration with software to enhance their range of use."
Not many companies are going over to fully automated warehousing, Derewecki says. If you were to go to an industrial park in search of a totally automated system, you'd have to walk through the whole park to find one. "It's still very rare," he says, "except in specific cases based on requirements for control, high throughput, limited time frames or harsh environments like freezers."
Derewecki adds that most of the automation projects he has seen have been prompted by mass merchant retailers, such as Wal-Mart and Target. "They have these massive conveyor systems for both full-case and loose piece operations. And they in turn drive technology down through their suppliers, because once they have it, they want their suppliers to have technology that is, if not parallel, at least compatible with their systems,"Derewecki says. "They want their goods to arrive a particular way."
Semiautomatic pilots
But tough economic times mean companies are cautious about adopting new technology. "The economy has caused them to be frugal and look very carefully at appropriate technology rather than wanting cutting-edge equipment," says Mike Kotecki, senior vice president of HK Systems in New Berlin, Wis., which sells both hardware and software for DCs. Consequently, Kotecki says, the line between automated and non-automated warehousing is blurring. "There used to be a clear line between automated and conventional, but now it's not the decision it used to be. There's a lot of semi-automation, or leveraging the advantages of automation," he says. For example, HK Systems markets an automated forklift truck with a 40-foot reach that performs the same functions as an automatic storage/retrieval system (AS/RS), but using existing storage designed for driveroperated trucks. "It fully automates a conventional rack without the expense," Kotecki says. Another powered cart capable of reaching into stacks eight pallets deep can be operated either automatically or by a driver. "In the past, a 110-foot tall, lights-out automated system was required to do the same thing, which is extremely expensive. We're taking the fundamentals of AS/RS and applying them to conventional warehousing.
"Automation is still very critical, but the clients' thinking is that I'm going to customize and throttle my automation to what's exactly appropriate," Kotecki says. "Clients are coming to us now with problems rather than requests for quotes (RFQs). It used to be they'd decide before they ever came to us that they needed an automatic vehicle system. Now they come in and ask, for example, 'I need to speed up my conveyor system, how can I do that?'We play a more consultative role now. It means people are getting appropriate solutions, and that often means hybrid automation."
Bob Ouellette, general manager for the logistics and technology division at consulting firm The Progress Group in Atlanta, says most of his clients are not pushing at the edges of DC technology. "Clients typically will go for leadingedge technology rather than bleeding-edge technology. To turn on something radically new in a distribution center or warehouse, you run the risk of shutting things down or missing key shipment dates," says Ouellette. That explains why RFID technology has yet to unseat the bar code as the identification technology of choice in America's DCs. He does note, however, that radio-frequency voice technology, where order pickers wear wireless headphones that guide them to picking bins and tell them how many items to pick, is becoming popular.
All systems go
All in all, the most popular new technology to install in a DC seems to be software. Some companies put software to work even before a new distribution center is built. When Emile Lemay was brought in as senior vice president of operations at Lantis Eyewear, he installed enterprise resource planning (ERP) software from J.D. Edwards and used it to run through the various options for consolidating the eyewear company's manufacturing and distribution operations. The company had three different warehouses spread across New Jersey, and used five to seven public warehouses, depending on seasonal demand. Lantis's business is highly complex: It offers private labeling for retailers plus a lot of value-added services such as putting sunglasses on a rotating rack, ready to be placed in a store, and shipping it complete with swing tickets and bar-code labels. This last service was beyond the company's capability, and it had to outsource the job.
Lemay guided the company into building a single facility in Secaucus, N.J., where all of Lantis's value-added services can be performed in house. Having the ERP system up and running well in advance of the move in October 2001 made it easier, Lemay says. "ERP played a significant role in allowing us to bring other technology in on the floor." The warehouse management software even hooks into a company intranet, allowing outside sales reps to dial in on the Web and find out where a specific customer's order is as it moves through the distribution process. Paperwork is a thing of the past. "It's really transformed the company," says Lemay. "Prior to this we were dragging our knuckles."
A typical manufacturer these days has been using ERP software for a while and has gradually been adding other computer controls to his warehousing operations—for example, an order management system from Manugistics or i2, load tendering and shipping status software from Nistevo or Descartes, and warehouse management software from Manhattan Associates or SwissLog. One level down, there's increasing use of warehouse control software, which takes the planning commands from the WMS and interprets them to manage automated functions such as conveyor or sortation systems or storage and retrieval systems.
Five years ago, it would have been hard to juggle all those different software systems, but Ouellette says one of the greatest advances in recent years is that warehouse management software vendors, such as Manhattan, Provia, RedPrairie and Catalyst, are making their different systems more compatible with others. "The available technology from the manufacturers, the operating systems, and the communications and messaging protocols are all getting to be non-proprietary," says Ouellette. "It's not quite plug and play yet, but we're getting much closer to that ability to integrate different systems."
That trend toward getting diverse software programs on speaking terms is even taking hold outside the distribution center's four walls, Ouellette says. "Application technology is having the biggest impact on distribution today. If you can bridge the gap between your WMS and your suppliers' systems, you have a much better view of what's been ordered, what's expected to come in and how you're going to manage the resources within your four walls," Oullette says.
Hooking up warehouse management software with transportation management systems is next, Ouellette says. "We're at a place in logistics where people are finding opportunities to reduce transport costs through better negotiation with suppliers or the better planning that transportation management software supplies. The impact on the DC is you could significantly reduce shipping costs depending on how you ship during the course of the day, how you provide and plan loads. It goes all the way back to the picking activity.Warehouse management and transport management software need to work hand in hand and the suppliers have responded to that, just as clients have recognized the need to do it."
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.