In our continuing series of discussions with top supply chain company executives, Brett Wood of Toyota discusses the steady growth in the use of forklifts, and changes and acquisitions by his company.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Brett Wood is president and CEO of Toyota Material Handling North America (TMHNA), which is composed of three main companies: Toyota Material Handling U.S.A. Inc. (TMHU), Toyota Industrial Equipment Mfg. Inc., and The Raymond Corp. Wood also serves on the board of these three companies. He has worked in the material handling industry since 1989, previously serving in positions at Toyota that included TMHU president; vice president of marketing, product, strategic planning, and training operations; and dealer development. Prior to joining Toyota, Wood held engineering positions with IBM Corp. and Northrop Aerospace, where he earned the recognition of "Engineer of the Year." He has a bachelor's degree in mechanical engineering from Cornell University. He recently spoke with DC Velocity Editorial Director David Maloney.
Q: How do you view the current state of the material handling industry?
A: Simply stated, it's a great time to be in the material handling industry. During the last few years, manufacturers have enjoyed record volumes. Dealers have experienced record sales. New suppliers and partnerships are being forged continuously. Exciting technology is being introduced into our industry every day. Material handling products and services are now extremely innovative and becoming more sophisticated. As a result, our customers are more productive than ever before.
I've worked in this industry for 30 years now, and it is changing faster than ever. I predict that in the next five years, the rate of innovation will be more than the changes we've seen in the last 10 years. As a former engineer, I can't wait to see how efficient North America's material handling industry will be by the year 2025. But even with significant advancements in our products, our industry will still be driven by the ever-changing demands of customers. Companies like Toyota and Raymond are having success by evolving quickly with changing customer expectations and a focus on keeping the customer at the center of their strategies.
Q: The Industrial Truck Association recently announced that forklift truck sales in North America recorded their fourth consecutive year of solid growth. To what do you attribute the ongoing strength of the forklift market?
A: The U.S. economy is currently fairly strong, and forklift sales are a reflection of a strong economy. Our industry is mixed, with an entirely different set of customer expectations and buying habits, resulting in diverse applications. For example, e-commerce and the expectation of next-day delivery for virtually everything has changed the way material is handled. This trend has increased the speed at which we need to pick, palletize, and move materials. Meanwhile, macroeconomic trends have brought some manufacturing back into North America from places like Asia and Europe. Bottom line, business is booming across many industries, and everyone is seeing a growing demand to handle material efficiently, and forklifts play an important role in that process. Remember that everything we own, touch, eat, or drink was probably moved by a forklift at some point in the supply chain process.
Q: You have an engineering background. It's rather unusual for an engineer to rise to be president and CEO of a large corporation. How do the skills you developed as an engineer benefit you as a leader?
A: In some companies, an engineering path is not a normal rise to the highest levels of leadership. But at Toyota, a process-driven and customer-focused company, an engineering mindset is very beneficial. Engineers are curious and creative problem-solvers. They see the big picture as well as the details. Engineers are tenacious and not inclined to pass the buck. Engineers value input from customers. These traits have all benefited me in my career, whether I was focused on engineering a product or managing the company's growth or setting our future strategic direction.
Also, Toyota is a very product-driven company, and I tell new hires to learn about our product lineup as quickly as possible. I find it very beneficial to be able to talk confidently about our products whether I'm at a press conference, in a hallway conversation, in a boardroom, in a staff meeting, or with a customer. Additionally, I've worked for some great leaders, both in the U.S. and from Japan, who have helped me develop my own leadership skills—which they don't teach you in engineering classes. And more than anything, I work for a company that values leadership, culture, and people, no matter what educational background they possess.
Q: Both Toyota and Raymond are very involved in National Forklift Safety Day. Why is this important to your organizations and the industry?
A: There is nothing more important to our companies than safety. We discuss it every day in our meetings, and it's at the core of what drives our team at all levels. So it's no surprise that Toyota was instrumental in creating and supporting National Forklift Safety Day, which will be held for the 6th consecutive year on June 11, 2019. It's a great opportunity to align the industry around something we all care about passionately and that is vitally important to all of our customers. Raising awareness of the importance of appropriate training is one of the main themes of National Forklift Safety Day. For example, effective forklift operator safety training may reduce accident rates by 25 percent, according to OSHA. Creating safe working environments is important to everyone in our industry.
Q: In January, Toyota announced a reorganization of its business units to form a single company to be known as Toyota Material Handling. How does this better position you in the marketplace?
A: The company is in the process of reorganizing throughout this year and will officially become Toyota Material Handling Inc. on Jan. 1, 2020. By bringing the manufacturing and engineering group (Toyota Industrial Equipment Manufacturing) together with the sales, marketing, and distribution group (Toyota Material Handling USA), we are simply better able to serve the needs of our dealers and customers. We will be able to streamline work processes throughout our organization. For example, our manufacturing and engineering teams will become even closer to our customers' unique needs. We're also able to align goals and priorities under one leadership team. And we're able to eliminate wasted time and energy in certain areas to move faster. It's a more efficient organization that will thrive even more together as one company, bringing one strong voice to our customers and our community.
Q: Toyota has been busy the past couple of years adding material handling companies outside of its core forklift business, like Vanderlande and Bastian Solutions. What are some of the reasons behind this strategy?
A: Customers require a wider variety of material handling solutions than they have in the past. Changing dynamics in the North American material handling market have created demand for new forms of logistics solutions beyond forklifts. We intend to build a stronger presence in the area of advanced logistics technology and to share that expertise with both our Toyota and Raymond brand forklift dealers. For the Toyota Advanced Logistics companies, there is a real need to find technicians to handle maintenance on conveyors, robotics, and other automation-related equipment. Toyota and Raymond employ thousands of technicians through our dealer networks, so that's also complementary for our businesses.
Finally, we're all developing new products, and many of them will be automated in the future. There is a benefit for all of us to accelerate and work together to develop some of these products. We are confident these acquisitions will result in greater customer support by working together than we could have accomplished individually.
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider 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.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”