you say you want an evolution?

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."