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Martin Buena-Franco is automation products marketing manager for The Raymond Corporation. He is a seasoned professional in sales and marketing with Fortune 500 companies, with global experience in big-ticket, industrial automation capital products. Buena-Franco has helped companies develop new products, enter new markets, and build the infrastructure needed to support business growth in emerging areas.
Specializing in automation, component and power systems portfolio management and brand building, Buena-Franco is bilingual and is fluent in both Spanish and English and has extensive Global P&L Experience across Latin America, Europe, and Asia.
Martin has a master’s degree in business administration in Finance and Strategic Management from Chicago Booth, as well as a Bachelor of Science in Electrical Engineering from the University of Texas at El Paso.
David Maloney, Editorial Director, DC Velocity 00:01
First steps to automation. The latest on the trucking market. And defending our supply chains from cyberattacks.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.
Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by Hyster Company, a global manufacturer with nearly a century of experience designing forklifts and high-capacity materials handling equipment used in the world's most intense industries. Operations rely on Hyster as a strong partner for everything from choosing the right motive power source to their Edison Award-winning operator-assist solution, Hyster Reaction. For more information, visit hyster.com.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insights into the top stories of this week. But to begin today: We've all seen the impacts that automation technologies are making in our distribution operations, but with so much new automation out there, how does a warehouse operator know where to start on the automation journey? To provide some insights, here's Victoria with today's guest.
Victoria.
Victoria Kickham, Senior Editor, DC Velocity 01:22
Thanks, Dave. Our guest today is Martin Buena-Franco, automation products marketing manager for The Raymond Corporation. Martin is here to talk with us about first steps and best practices for developing an automated warehouse. Welcome, Martin.
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 01:37
Thank you, Victoria, I really appreciate your having me ,and thanks for the opportunity to talk to your audience.
Victoria Kickham, Senior Editor, DC Velocity 01:43
Great. Well, we're glad you're here. So, I just wanted to start by saying, you know, we both attended the ProMat material handling conference in Chicago last month, which seemed very much like an automation show to me, given all the recent advances in robotics, artificial intelligence, and the like. What was your assessment of the event, and the state of warehouse automation, as we sit here in 2023?
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 02:04
Well, I tell you, ProMat continues to deliver. It was just a fantastic event. We had a record number of people visit us at our booth, and the quality of the leads was top notch, you know. So, the, you know, the state of the automation in logistics is growing, it continues to expand — and for all the right reasons. I mean, you know, the premise of automation, of course, is to turn a manual process into a process that is repetitive, accurate, predictable, and to do it in a manner that mitigates risk, it reduces operational costs. So, logistics, you know, it's been a challenge for the past few years. There has been circumstances that put a lot of pressure on operations managers, you know, distribution centers, fulfillment centers, warehouses. You know, one of them, of course, being the growth of e-commerce and direct-to-consumer operations. So, this model requires a much higher SKU number, and because of it, you know, every cubic inch of space is valuable. So, customers want, they're, you know, they're expecting their products to ship fast and on time. And then the other one, of course, is, I think pretty much everyone relates to this, is labor supply continues to be pretty tight. It's difficult to attract, train, and retain workers in logistics. So, because of those factors, you know, and all this pressure, automation investments provide relief, right? Because they can take on repeatable tasks, and they do it in an accurate, repeatable, and predictable manner. So, I, quite frankly, see this will continue to grow, especially in logistics. That's where automation is making a big play right now.
Victoria Kickham, Senior Editor, DC Velocity 03:55
There are so many advanced automation solutions available for the warehouse today from companies like Raymond and others. What are you seeing in terms of adoption rates for automated material handling equipment, given what we just talked about? You know, how far along are most companies on this journey?
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 04:12
Yeah, that's a great question, and so, you know, if we look at the market by product type, by industry sector, it's going to change, right? It's gonna vary by industry sector. Some manufacturing, you know, has been automating for a longer period of time than logistics, right, especially the automotive and food-and-beverage sectors. Other sectors have caught up — you know, you have packaging, building materials, electronics, pharma, retail. So, those companies, they've been working with automation for quite some time, and, but the demand again, you know, varies by industry and the maturity. So, 2023 came with some uncertainties, you know: the wa rin Ukraine, high interest rates, energy costs is high, and so there is this potential for recession, right? So, in terms of the adoption, you know, we're seeing it soften a little bit for this year, however, the trend is still going up, you know. So 2020, 2021 were pretty strong; '23 is — '22 was a bit of a correction year, but '23 will still continue to expand. So, in short, I guess, you know, across industries, in terms of adoption, the maturity of each industry sector comes into play, but also the size of the company. So, you know, a large company is very likely to have a team of people investigating new technologies, developing, implementing an automation roadmap, you know. So, smaller companies, you know, they know they have to implement an automation roadmap, but some, some of [them] really struggle with it, simply because they don't have the people resources available to them. So, again, these are the main factors: the industry sector, size of the company, and the adoption rate, quite frankly is, it varies. Now, an interesting study recently, I was just reading, you know, was asking the question to automation operations managers, you know, in terms of purchasing, or making investments in automation, 80% of the respondents actually are planning to invest in automation within the next five years, so, with that, you know, the automation market is alive and healthy.
Victoria Kickham, Senior Editor, DC Velocity 06:32
That's for sure. So, when we're talking about those that are sort of, you know, just starting this process, what are some questions that maybe warehouse managers or other company leaders should ask, you know, when they're considering adding automated equipment or processes to their warehouses? I'm wondering, you know, how they can determine that an automated solution is right for them? Thank you. Som given all that, I'd like to ask you kind of a crystal ball type of question: what do you think, you know, sort of the typical warehouse will look like, you know, 10 or so years down the road, or sooner, you know, given some of what you just talked about?
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 06:54
Yeah, that's a great question. So, you know, not unlike any other strategic investment, right, a manager, they must be diligent, they need to ensure that there is a good return on their automation investment. I'd say the first step is to really understand what parts of the operation need to be updated or modified because it is holding them down, you know. What KPIs are critical to their mission, what they're trying to do, but they're not being met, right? So, in order to meet the evolving needs of their customers, and to stay competitive, you know, what are those bottlenecks, right? Is it a system or resource constraint, or both? So again, identify the problem. You know, sometimes it sounds simple, right? But identifying the problem is not as clear cut, you know. Some of our customers really struggle with this, you know, they, in fact, very few customers come to us and ask for a specific automation solution, you know, they don't tell us, "Hey, this is what we need, can you help us implement it?" but rather, you know, we would like to engage in a, what I call a discovery engagement, you know, we like to take the time to understand the current state of affairs We want to understand their manual process as it exists today, and the reason we want to do that is because it gives us a better understanding of their pain points, you know? Once we establish a baseline, we can better identify the processes, the functions, and then we can define the future-state goals, right? I think that's the first step, you know: take the time. And then we, you know, we'd like to optimize your existing workflow. So, even before we make any investments in automation, we'd like to apply lean techniques to reduce inefficiencies, to increase throughput. I recommend, again, any operations managers, that they do this first, spend time in this area, because it will help identify the repetitive workflows and the automation solution that is going to have the most favorable impact in the end. That would be the first step, you know, really, really spend time identifying the problem. And the second one is installing the telematics solution. Telematics is a tool that allows us to acquire real-time data, right? What is their material handling equipment, trying to tell you, right? Telematics gets us real-time, data, what is going on in terms of asset utilization, asset location, because everything is connected. We know where the assets are in the facility, what they're doing — material movements, you know, personal movements. And with all this data, you know, we can take it to the remediation, and then of course, validate whether that remediation actually impacted the operation, you know, gave us some good gains in productivity. So, that would be my advice, you know: optimize and then, of course, do the telematics implementation so you can have a good visualization into what's going on in the facility. Yeah, no, I love this, you know, it's, looking ahead, I guess, no doubt and say, 10 years, right, I think that warehouse of the future is going to be highly automated and technology-driven. You know, there's gonna be a much greater number of robots in multiple form factors. We're seeing that happening already, you know, but these robots are going to be handling, you know, materials from raw materials, transforming them into finished goods; picking, packing, you know, performing many of the repetitive tasks. But what I'm excited about is some of the new control disciplines that are going to be put in place. So, you have this highly autonomous and even robots, you know, acting as agents, so they're making decisions independently, because you have this artificial intelligence machine-learning aspect, you know? So, very highly decentralized control architecture, you know. I'm very excited also about the hardware. The robots and the software will seamlessly communicate and coordinate some of the advanced tasks, you know: optimization of inventory, order processing, labor management. I think it'll be a very, very tightly integrated system working in unison. And the last thing is, personally, I get excited about an increased focus on sustainability, with more buildings incorporat[ing] renewable energy sources and sustainable design features — so, from energy solutions that power the facility, to maintaining the air quality in the building and the lights. So, I think, again, this warehouse 10 years from now, I think it's going to be highly automated, data-driven, and highly adaptable to market conditions.
Victoria Kickham, Senior Editor, DC Velocity 12:01
Certainly a lot to look forward to. Just as a final thought, you know, anything, anything else you think our listeners should be aware of, pay attention to, in terms of this trend toward automation in the warehouse? Any final thoughts?
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 12:13
You know, I would say, you know, treat each opportunity, each project, you know, just, you know, stick to the same process that you normally do when you make another, you know, investment, you know: get your NDAs in place; set expectations with suppliers; provide them with a really good, well-defined list of deliverables, what your expectation is, right? Find suppliers or integrators that you can trust. Someone that can not just, you know, give you good references, but that can support you through the installation and implementation, because a lot of times, that's where things can go wrong, right? And someone who's going to be there, you know, to support you years down the road, I'd say start small. So, when, if this is your first automation project, you know, start small. Find an ancillary application within the facility so it's not mission critical, right, so your people can get used to the technology, right? And after you, you know, operated that automated solution for some time, you know, socialize it internally. So, because in the end, what you're doing is you're changing a manual process to an automated process, so it requires some change management. So, make sure that everyone feels comfortable with that, and before you expand, you know, to a bigger application, something that is closer to you know, your mission. So, that would be kind of my recommendation. And don't buy [on] price alone. So, that's the last point I want to make. The ROI, of course is important, you know, but there's a lot of good intangibles that are just as important. You know, you can boost morale, with the employees, increase retention. You can reduce risk. Agility, it's a big one, I mentioned that. So, automation can provide a lot of benefits just beyond the quick, you know, two-, three-year return on that investment, so take a look at it and say "It's an investment for the future."
Victoria Kickham, Senior Editor, DC Velocity 14:18
Right. Martin, thank you for joining us today. We appreciate your insight.
Martin Buena-Franco, Automation Products Marketing Manager, The Raymond Corporation 14:24
Well, thank you so much for having me. I very much enjoyed this, Victoria. Thank you.
Victoria Kickham, Senior Editor, DC Velocity 14:29
Thank you. We have been talking with Martin Buena-Franco of The Raymond Corporation. Back to you, Dave.
David Maloney, Editorial Director, DC Velocity 14:36
Thank you, Martin and Victoria. Now let's take a look at some of the other supply chain news from the week. And, Ben, you wrote a couple of stories this week about current conditions in the trucking sector. How are things going on our roadways?
Ben Ames, Senior News Editor, DC Velocity 14:50
Well, yeah, the freight sector has always run in business cycles, and we really seem to be in a cycle right now. It kind of shuttles between tight capacity with high shipping prices and loose capacity with cheaper prices. And by a variety of measures, North American Trucking is knee-deep in a slump right now, with too many trucks and not enough freight. And this week, we heard about a couple of different reasons why, exactly, that's so. This is based on two different transportation reports that we covered. One was from the consulting firm FTR, and another one came from the industry group the American Trucking Associations, or ATA. So, first, FTR said that they have a measure of freight market activity that that firm calculates. They call it their Trucking Conditions Index. So, that dropped deeper into negative territory in February than it had been in January. The actual number that they're talking about, it's a mathematical index, and it reflects conditions that are in five different sectors. So, they look at freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. So, as for the reasons that February had dropped into the more negative range, FTR analyst Avery Vise said that freight volume is actually holding up better than some anticipated, because spending on goods is still elevated, and consumer inflation is slowing down. Likewise, there had been some fears of a major banking crisis — there were a couple of banks that that went under about a month ago — but those have abated. But still, the industrial and the consumer sectors are sluggish, and tighter lending standards by other banks — the surviving banks, on top of the Federal Reserve's interest rate hikes that we all hear about can really slow the economy even further. So, there are impacts on both sides of the scale, but the tightening economic conditions seem to be winning right now.
David Maloney, Editorial Director, DC Velocity 16:53
Ben, that all sounds pretty challenging. Did the reports give any predictions for when this cycle could rebound?
Ben Ames, Senior News Editor, DC Velocity 17:00
Well, the FTR report did not, but the ATA report looked a little bit further into the future. As we said, FTR was looking at February; the ATA said that its index, which is, it's a seasonally adjusted for-hire truck tonnage index, they had theirs for March, and that fell five-and-a-half percent after it had increased almost a percentage point in February, so that's kind of a similar trend to this one. So, here's some context for the cycle that we're in: ATA said that after increasing, actually, a total of about two-and-a-half percent over the past quarter. March's sequential decline was the largest monthly drop since April 2020, which was right at the start of the pandemic. For reasons about that, ATA pointed to falling home construction, decreasing factory output, and soft retail sales. So, there are a lot of moving parts right here, but they all seem to end up in about the same direction, that there's a little bit, there's less freight to move, there are too many trucks to do it, so for the time being, that there's too much capacity and it's not a super market to be in, in the freight trucking sector.
David Maloney, Editorial Director, DC Velocity 18:13
Well, I guess the silver lining, if we want to look at it is, as you mentioned, these things are cyclical, and coming off record highs, it was bound to be a bit of a dip. I guess we just have to wait for the industry to make its next swing upward again.
Ben Ames, Senior News Editor, DC Velocity 18:25
Exactly so, yep, and we'll be here to cover that when it does.
David Maloney, Editorial Director, DC Velocity 18:29
Thanks, Ben. And, Victoria, you wrote this week about research showing the top supply chain risks. Can you give some details?
Victoria Kickham, Senior Editor, DC Velocity 18:38
Yes, happy to, Dave. So, rampant cyber security weaknesses are really putting supply chains at risk, ad that's according to her a report from British cybersecurity company Risk Ledger. And as you say, that was released this week, and we reported on it. Risk Ledger's State of Cybersecurity in the Supply Chain 2023 report is based on proprietary data from more than 2,500 suppliers on its own risk management platform, and the findings identify the 12 most common weaknesses among suppliers, especially among third-party suppliers and others that are sort of further down a company's supply chain. Now, those kinds of suppliers are external companies that a business uses to provide a service as part of their own delivery, or a company that provides elements of a product that they make. And according to this report, 40% of those third-party suppliers do not conduct regular penetration tests of their internal systems, and more than a third don't have a supplier security policy that outlines the security requirements that those suppliers should meet. And those are things that put a company's own data and that of their customers at risk. So, that's what this report is really getting at.
David Maloney, Editorial Director, DC Velocity 19:54
Victoria, you mentioned that the report outline 12 top weaknesses that are threatening supply chains. Can you give us a couple of those 12?
Victoria Kickham, Senior Editor, DC Velocity 20:01
Yes, absolutely, and some of them are pretty simple things — at least, that struck me as pretty simple. According to the survey, 17% of suppliers do not enforce something something called multifactor authentication, or MFA, on all remotely accessible services. Now, MFA requires a second source of validation before granting users access, so, in addition to entering a password, for example, the user may ask be asked for a code or a fingerprint. MFA is the simplest, most effective way to keep hackers out of your online accounts, according to the experts at Risk Ledger, but it can be cumbersome for users, and because of that, it's often provided as an optional setting that needs to be intentionally configured. I know I'm familiar with this, and I'm sure our listeners are as well. It can really be a pain when you're asked to, you know, get a, check a code or something like that before you can log into a particular account or service. But — however, not using this protocol leaves accounts vulnerable to attack through password theft. So, that's how a lot of these hacks occur. As another example, 23% of suppliers fail to use something called privileged access-management controls to securely manage the use of privileged accounts, and those are, you know, ultimately — the ultimate target, I should say, for hackers, for attackers. This could include accounts that control sensitive customer data, for example, and with high privileges an attacker can access that information — you know, it's particularly sensitive and also more valuable data — and then they can modify security-detection tools to cover their own tracks. These are just two of the 12 examples in this report. The rest are outlined in the report which explains all of the weaknesses that are common causes of cybersecurity incidents. They also mentioned, as I said earlier, that the high proportion of third-, fourth-, and fifth-party suppliers are not using these controls to protect themselves or their customers. I should say the report also offers recommendations by cybersecurity experts for improving company's third-party risk-management strategies, and they also include some benchmark data. There's a link for more information on all of this in our story, which our listeners should know was posted this week on Wednesday, April 19.
David Maloney, Editorial Director, DC Velocity 22:17
And as we've seen, any company, large or small, can be a target of cyber attacks, so we all must remain diligent, I guess, in protecting our data and our systems.
Victoria Kickham, Senior Editor, DC Velocity 22:26
Exactly.
David Maloney, Editorial Director, DC Velocity 22:27
Thank you, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 22:29
You're welcome.
David Maloney, Editorial Director, DC Velocity 22:30
We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories, and check out the podcast Notes section for some direct links on the topics that we discussed today.
And again, our thanks to Martin Buena-Franco of The Raymond Corporation for being our guest. We welcome your comments on this topic and our other stories; you can email us at podcast at DC Velocity.com.
We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. Our new episodes are uploaded each Friday.
Speaking of subscribing, check out our sister podcast series Supply Chain in the Fast Lane. It's coproduced by the Council of Supply Chain Management Professionals and Supply Chain Quarterly. Subscribe to Supply Chain in the Fast Lane wherever you get your podcasts.
And a reminder the Logistics Matters is sponsored by Hyster. With strength, durability, and their continual focus on safety, Hyster is powering your possibilities. For more information, visit hyster.com.
We'll be back again next week with another edition of Logistics Matters. Be sure to join us. Until then, have a great week.
Articles and resources mentioned in this episode:
- The Raymond Corporation
- Trucking sector conditions sank sharply in February, FTR says
- March trucking tonnage tumbled to largest monthly drop since April, 2020
- Report identifies top supply chain
- Visit Supply Chain Quarterly
- Listen to CSCMP and Supply Chain Quarterly's Supply Chain in the Fast Lane podcast
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