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Archives for November 2018

How Last Mile Delivery Affects the Supply Chain

By Contributing Author | 11/26/2018 | 11:47 AM

By Inbal Axelrod, co-founder and CMO, MyRouteOnline

 

Thanks to the globalization brought about by connectivity and other technologies, it’s become easier than ever to ship products from one end of the world to the other. This doesn’t mean that there aren’t challenges to overcome when it comes to international or even local shipping, though. In fact, there’s still one last wild, untamed territory for shipping and delivery companies or for retailers that rely on these companies: getting that order delivery through the last mile.

What “Last Mile Delivery” Means

For the most part, shipping products have never been quicker or more cost-effective. The impact of high-speed freight rail networks and large-scale international container ships means that products can leave their point of origin and arrive at a distribution center in practically no time at all. However, when it comes to moving those products out of a distribution center and out for delivery to a consumer, either in a B2B or a B2C scenario, shipping systems become much less efficient.

Out of the entirety of the cost of shipping an item, this distance between the distribution center and the final destination — which has become known as the “last mile” — makes up around 28% of a shipping company’s expenditure. This is seen as a major problem for shippers and for both brick-and-mortar retailers and e-commerce sellers, not just for the increased cost but the lack of efficiency in ensuring that customers receive their orders as quickly as possible.

The Lack of Last Mile Security

The traditionally high cost and low efficiency of last mile delivery have long been a thorn in the side of anyone whose business relies on order fulfillment on a large scale. Finding better consumer delivery options is an especially important goal for many shipping companies and those that use them; with the number of deliveries that are made on a daily basis in the US to houses where the occupants are at work, the opportunity for theft is very high. In fact, 23 million Americans experienced package theft right from their front doors in 2016 alone.

Such a major problem cannot go unresolved. Consumers need to feel safe in ordering from e-commerce sites and having their packages delivered to their front doors. If last mile delivery providers can’t offer proper package security to these consumers, e-commerce sites that rely on package delivery could see a major negative impact if the trend continues, even though e-commerce delivery has distinct advantages for consumers when it comes to not having to shop in a physical storefront.

Finding Answers for the Problem

There are a number of ways to answer last mile delivery problems when it comes to security. Some of these, such as installing an electronic lockbox on your front porch, place the onus on the consumer when it comes to purchasing and maintaining the lockbox as well as ensuring that last mile delivery companies have the proper access code to deposit packages while no one is home. However, there are other options that last mile delivery companies have taken upon themselves to exercise.

In order to address the problem, some companies have given consumers the option to have their packages shipped to a secure location, such as the ship-to-store option that many large retail chains now offer. The UPS Store network, meanwhile, offers mailbox service similar to the PO boxes at your local US Post Office. E-commerce giant Amazon, often thought of as the industry leader when it comes to last mile delivery, also has their Amazon Locker kiosk system that provides security and automation for package delivery.

Quicker, Better Tracked Deliveries

Whether you’re making urban deliveries or your fleet of trucks is out in the suburbs, you can help solve last-mile delivery problems by incorporating the use of route planning software. Route planners help shorten delivery wait times by using state-of-the-art algorithms that analyze historical road traffic data before picking routes for your delivery trucks that are the most efficient. Because there’s fewer backtracking, delivery fleets spend much less on fuel, which further helps cut the cost of last mile delivery.

Additional benefits to integrated route planning are the ability to provide much more robust package tracking for consumers. Knowing when you can expect your delivery sometimes makes it easier to have someone return home to secure the package in order to prevent it from being stolen. In some cases, consumers can even choose the desired delivery window at checkout. The software then factors that request into its route planning and does its best to accommodate the consumer.

The Final Word on Last Mile Delivery

Sometimes it takes different applications of technology to make better and quicker last mile deliveries. In many ways, urban locations have some major advantages, as there are many opportunities to have packages delivered to a local store or a secure site for pickup. China-based e-tailer Alibaba is even testing its ability to deliver tea to customers in Beijing via drone in just an hour, just as Amazon is striving to shorten delivery times in metropolitan areas as well.

For consumers who don’t want to install an expensive lockbox on their front porch or brave the outside world to pick up their package from a store or other site, there is still hope. Using technology to provide better package tracking options to consumers or to make routing package delivery as quick and efficient as possible ensures that consumers of all stripes, whether they live in an urban setting or in a more suburban or even rural one, can benefit from the technologies being used today to make last-mile delivery faster and less expensive for everyone.

 

Inbal Axelrod is the co-founder and CMO at MyRouteOnline, a multiple stop route planner that helps make our world greener. Individuals visiting multiple locations can plan their routes online, optimize their route, and spend less fuel and time on the road. This means fewer greenhouse gas emissions, a reduced carbon footprint, and better air quality. Inbal can be reached at inbal@myrouteonline.com 

Top Warehouse Organization Mistakes

By Contributing Author | 11/19/2018 | 12:40 PM

By Chicago Tag & Label

There’s more to organization than alphabetical order, especially when it comes to logistics. A well-maintained supply chain requires a complex system to ensure that components, assets and products are where they’re supposed to be. Unfortunately, anything so complicated includes numerous opportunities for mistakes. Managers and other logistics professionals need to be on the lookout for these slip-ups and work to remove them from their processes. The reward for their diligence will be boosted productivity and maximized profitability.

Whether the result of neglect, ignorance or poor implementation, missteps in the warehouse environment can have a devastating effect on the entire operation. Fortunately, the majority of these issues can be avoided as long as those in charge know what to look for and how to correct whatever problems they find. For example, a common blunder is a failure to automate as much as possible. This opens the possibility for human errors that could be entirely preventable. By investing in the right software, warehouses can eliminate this source of worry.

Proper organization is critical for warehouse efficiency and employee morale. For more ideas about how to have the most organized, effective facility possible, see the accompanying guide.

 

Top 10 Warehouse Organizational Mistakes created by Chicago Tag & Label.

The Impact of AI and IoT on the Manufacturing Job Market

By Contributing Author | 11/16/2018 | 6:50 AM

By Cherie Shepard, Director of Packaging, Material Handling & Food Processing, Direct Recruiters Inc.

 

Dependent upon your perspective, the concept of artificial intelligence (AI) invokes one of two opinions: One, eventually the machines will rule the world. Or two, you appreciate the benefits of modern technology.

But either way, one thing is certain: The human workforce relinquishes a bit of responsibility with each technological advancement. The late theoretical physicist Stephen Hawking assumed technology would eventually cause our demise. He theorized that it “could spell the end of the human race.” Without a doubt, artificial intelligence coupled with the Internet of things (IoT) devices will impact not just the manufacturing sector, but every industry within the job market.

These technologies, once considered science fiction, are integrated into many aspects of our daily lives. Modern manufacturing is programmed to rely on software and smart devices. And smart phones have been an integral part of industrial engineering for over a decade. Modern technologies are changing the way we work and live. Notions aside, we can agree that AI and IoT will transform every sector.

Definition of Artificial Intelligence (AI)

Before we go any further into our discussion, let’s define these two terms: Artificial intelligence and internet of things. Artificial intelligence (AI) has been defined as “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.”

As pointed out by Bernard Marr earlier this year, AI is traditionally utilized for one of three purposes:

  1. To build systems that think exactly like humans do (“strong AI”)
  2. To allow systems to work without figuring out how human reasoning works (“weak AI”)
  3. To use human reasoning as a model but not necessarily the end goal

Companies such as Apple, Amazon, and Facebook utilize machine learning to improve customer experience. We see technologies such as Siri, Alexa, and Google Maps, seamlessly interwoven into our daily lives to provide a more efficient lifestyle. On the other hand, manufacturing plants are utilizing robots and machine learning to optimize their operations on the factory floor.

Definition of Internet of Things (IoT)

In the past few years there’s been increasing buzz about the Internet of Things (IoT) along with some confusion. Jacob Morgan provides a concise definition: “Simply put, this is the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other).”

With the widespread adoption of Wi-Fi, connecting devices to an Internet connection has become quite simple. And now, practical appliances such as your television, coffee maker, and refrigerator can all be a part of the IoT. However, the practical implication of IoT technology goes far beyond the home. Within the next two years, it’s projected there will be 4 IoT devices for every human being—that’s more than 24 billion IoT devices across the globe.

The appeal of AI and IoT

The President of the Future of Life Institute, Max Tegmark, once said, “Everything we love about civilization is a product of intelligence, so amplifying our human intelligence with artificial intelligence has the potential of helping civilization flourish like never before—as long as we manage to keep the technology beneficial.“

As AI and IoT technologies are adopted, there’s a responsibility to ensure they remain beneficial to enterprise and humanity as a whole. So far, the result has led to efficient manufacturing processes. We’re able to accomplish more in less time and with fewer resources. And in general, today’s workforce has benefited from these efficiencies. Now employees have instant access to needed information. Connected networks have provided automated manufacturing processes that were previously slow and even dangerous to the human workforce.

But at the same time, machine learning could result in a negative impact on employment as a whole. Several years ago, in an article titled “Will Robots Steal Your Job?” Farhad Manjoo imagined this potential.

At this moment, there's someone training for your job. He may not be as smart as you are—in fact, he could be quite stupid—but what he lacks in intelligence he makes up for in drive, reliability, consistency, and price. He's willing to work for longer hours, and he's capable of doing better work, at a much lower wage. He doesn't ask for health or retirement benefits, he doesn't take sick days, and he doesn't goof off when he's on the clock.

The ramifications of AI and IoT

The long-term implications of these technologies are still uncertain. Whether the impact is positive or negative, manufacturing is sure to feel the result.

Workers are no longer competing solely with a human workforce. Even some of the most skilled workers could potentially lose their jobs to a machine. Every day computers are becoming more efficient with processing human problem-solving skills. As a result, machine learning is set to disrupt nearly every role.

Additional security measures need to be considered. As we become more connected within the workplace, employees are exposed to new threats. Data breaches impact the organization and the employees within. Software that serves to help the company personnel can also provide opportunities to malicious threats.

Increasing wages are one of the most obvious economic benefits to employees. However, increasing wages have led to the development of automation. We’re already seeing workers being replaced by machines. So far, many of the affected jobs have been low-paying ones that require little experience or education. However, machine learning will allow technology to replace even technical jobs. Further into his 2011 article, Farhad Manjoo noted that even attorneys could be susceptible to AI’s impact.

However, nearly in the same breath, Manjoo notes that technology sometimes replaces workers in the short run. Then, over time, technological improvements lead to economic growth. We can all agree with him when he says, “Economic growth improves prospects for workers across a range of industries.”

In spite of economic growth, there’s a cautionary tale we should be aware of. When we become dependent on technology, we often lose the skills that technology has replaced. We’re already seeing the impact smart phones have had on simple memorization. Science proves that an unused muscles leads to atrophy. Few of us can recount a phone number without relying on the use of our phone.

Working alongside AI and IoT

To a certain degree, we all fear the unknown. Despite the growing optimism, there’s a certain amount of skepticism that follows. What function will be automated? What position will be replaced by a machine?

These are legitimate concerns within the manufacturing industry. Research on the impact of AI within the workforce presents two polarizing viewpoints. It’s seen as extremely beneficial in efficiency. But at the same time it’s believed to be the biggest employment disruption since the last Industrial Revolution.

Recently Georgios Petropoulos, an industrial organization researcher, outlined what roles he believes to be most directly impacted. He argues that mid-level jobs requiring routine manual skills are at risk. “In the long run, initial labor displacement effects of jobs with routinized manual or cognitive skills, as in previous industrial revolutions, will be compensated for by the growth in non-routine jobs at the high and low end of the economy.”

But rather than worrying about the what-ifs, manufacturers should embrace the positive implications that AI and IoT can provide. Working alongside AI and IoT will lead to the following:

  • First, manufacturing stands to benefit from a productivity perspective. Artificial intelligence will be able to reduce, and eventually eliminate, customary data collection. This will free up employees to engage in the more rewarding aspects of their jobs. Rather than viewing AI as an employment threat, it should be seen as an opportunity for more efficient manufacturing.  

  • Second, working alongside these technological advancements will demand new security and data-collection protocols. As IoT devices are further adopted, there will be more opportunities for outside threats. The idea may sound silly, but an integrated smart home could potentially be hacked through television providing access to someone’s personal records.

    In today’s interconnected world, companies need to provide trust alongside innovation. Within manufacturing, AI and IoT will continue to expedite processes, create efficiencies, and eliminate the potential for human error. But without the appropriate security protocols, employees could be exposed to identity theft or other harmful data collection. Implementing these technologies will demand an employer protect customer and personnel information. If employed effectively, manufacturers can gain faster insights, improve decision-making, and develop more efficient processes while avoiding the negative consequences.

  • Third, the adoption of AI and IoT will require the employee to evolve. A robot may not replace you, but the reality is that these technologies will disrupt current roles. Just as we saw with the previous Industrial Revolution, new technology results in a labor market shift.

These trends have caused some to worry, but as one economist stated: “Since the dawn of the industrial age, a recurrent fear has been that technological change will spawn mass unemployment. Neoclassical economists predicted that this would not happen, because people would find other jobs, albeit possibly after a long period of painful adjustment. By and large, that prediction has proven to be correct.”

Within manufacturing, and across the board, these technologies call for change. Employees must be willing to adapt and further develop their skills. It could even require learning new skills. The rise of technology demands that education become an ongoing process.

No matter how advanced technology becomes, there will always be a human element. AI still has a long way to go when it comes to assessing human emotion. And industry relies on human connection. In this rapidly changing environment, employees must never overlook the importance of maintaining personal connections—those traits that separate us from the machines.

In summary

The full magnitude of these technologies’ impact on the labor market is still to be determined. The Digital Revolution will require ongoing reliance on AI and IoT technologies.

The inevitable impact of automation on all industries is certain. But with these modern advancements comes the potential for efficient manufacturing. Organizations and employees must be willing to embrace these technologies to ensure progress into the future.

 

Shepard  Cherie (Direct Recruiters)Cherie Shepard is director of packaging, material handling & processing for Direct Recruiters. For over 10 years she has helped identify exceptional sales, sales management, and engineering candidates and bring them together with her clients assisting both to navigate complex hiring needs. Cherie is committed to performance, quality, and positive results. To stay current with industry news and trends, she routinely travels to trade shows and networking opportunities to meet with industry leaders.

Choosing the right battery and charger combination is complicated, but key for your bottom line

By Contributing Author | 11/14/2018 | 6:02 AM

By Harold Vanasse, Senior Director of Marketing, Motive Power Americas for EnerSys

 

Historically, selecting the right battery and charger combination for a lift truck fleet was accomplished by hand. That is, it was done by manual formulas and quick back-of-the-envelope estimates. While those practices were prone to errors, they were used because more exacting methods were not yet available.

High-frequency chargers weren’t available either, limiting charger choices to “conventional” ferroresonant chargers for most battery types, and Silicon-Controlled Rectifier (SCR) chargers for sealed, Valve Regulated Lead Acid (VRLA) batteries. But with the introduction of high frequency chargers that enable opportunity and fast charging, things got much more complicated – and potentially higher priced.

Potential pitfalls of poor choices

Pairing the wrong battery and charger can negatively impact a facility’s bottom line in several ways. Attempting to opportunity charge a battery with a conventional charging unit can shorten battery life severely – as much as 50% in cases where batteries are also chronically under-watered. Having to replace an entire lift truck battery fleet twice as quickly as anticipated can be a huge hidden cost.

Similarly, selecting a battery and charger combination based on price alone could cost an operation thousands of dollars over time. If it’s not the most efficient option for the application and warehouse environment, a facility could easily rack up battery operating costs that could have been avoided with a better choice.

For example, do you run a multi-shift operation that would run more cost-effectively with an opportunity or fast charging regime? Do you operate on two or fewer shifts, in which case the conventional “8/8/8” charging schedule might be fine? How much time (and money) does your team spend on battery maintenance, and would a virtually maintenance-free battery help you reduce those costs? Is your facility open five or six days or a full seven-day week? What is the average ambient temperature of your facility? What about the incoming power source from your local utility?

Technology to the rescue

All of those factors matter when picking the right battery and charger combination. Fortunately, material handling operations need no longer rely on overly simplified hand calculations to get it right. Today, thanks to advances in battery monitoring equipment and modeling software, there are sophisticated ways to determine the ideal combination for a given situation.

An on-site power assessment, usually conducted by a battery/charger dealer or manufacturer, offers one very effective option. Lift truck batteries are outfitted with sensors that capture operating data, which is then tracked and interpreted by monitoring system software over several weeks. Factors such as amp hour usage, idle time, charging routines and more are analyzed to determine the best battery/charger fit for the operation. 

Advanced application and sizing software offers another tailored option. In this case, the battery/charger dealer or manufacturer will ask the facility for a range of information, including battery compartment size in the lift truck, minimum battery weight requirements, the actual lifting applications, the number of shifts, and much more. With this approach a facility can assess their needs virtually and cost-effectively.

The bottom line? Determining the ideal battery and charger combination is complicated and will never be a one-size-fits-all proposition. The good news is that today, there are sophisticated tools available to get the job done with more precision than ever before, which will ultimately help operations boost efficiency and cut operating costs.

About Harold Vanasse

Harold Vanasse is Senior Director of Marketing, Motive Power Americas for EnerSys, the global leader in stored energy solutions for industrial applications. While serving in a variety of roles in the battery industry over the past 20+ years, Vanasse has been influential in bringing innovative solutions to the material handling industry.

The Promise of Personalization in Retail

By Contributing Author | 11/12/2018 | 6:48 AM

By Matt Simonsen, Director of Offer Management, Infor Retail

There is little more rewarding than the feeling of finding the perfect gift for that special someone while holiday shopping – and this season, retailers are looking to not only capture that moment, but help to create it. Aspects such as micro assortments, personalized items, and special orders are competing to produce those surprise and delight moments between retailer and customer – one that cannot be attached to a 6-8 week delivery schedule. In order to personalize the shopping experience, retailers need the right supply chain management software to ensure delivery on the customer’s terms.

The supply chain has grown more and more personal over the last few decades. Customers are more interested in certifications around sustainability than ever before, measuring compliance practices to those that mirror their own personal ethics rather than those that simply follow local laws. Consumers believe they have the right to knowthe supply chains that deliver their products. The simple truth is that retailers cannot hide their supply chain from consumers anymore.

This familiarity with the supply chain over the last couple of decades leads customers to believe that supply chains are responsive to consumer demands and can be configured to their personal wishes. Amazon’s free two-day shipping has gone from an unbelievable convenience to nothing more than table stakes for ecommerce retailers. This puts tremendous pressure on supply chains to respond, and often at a loss. Some retailers are now even toying with the notion of paying customers through discounts to receive their products later than two days after ordering.

Beyond visibility into compliance and sustainability and the demands for faster delivery, personalized supply chains are also impacting fulfillment locations. Retailers shipped to homes for decades, originally through catalogs and later, ecommerce distribution centers. Now, to hit today’s tight timelines and save on shipping costs, retailers have built out capabilities to ship from nearby stores. Not to be satisfied, some customers figure that if the store can receive an online order and prepare it for shipping, then they should be able to pick it up in-store, at their convenience. The customer has created a new fulfillment method based on their convenience.

Given the personalization trend, it is not surprising that customers are comfortable getting involved with product personalization. Purchasing a tailored made product, receiving it quickly, cheaply, and to the location of their choice with full visibility into the sustainability and compliance practices of each participant in the value chain is the epitome of a personalized supply chain. It is also an enormous undertaking for companies to deliver on this customer vision. Every point of the supply chain will feel the pressure to be reliable, available, and agile.

For example, Product Lifecycle Management software and Product Configuration & Pricing Software will need to collaborate to determine what customizations can be presented and delivered to customers. These solutions not only help generate orders, but will need to observe, track, and incorporate the desires of customers to ensure the level of customization offered is sufficient.

As customers and retailers grow closer together, the desired level of customization is only going to increase. Consumers are constantly shopping –  through their phones, their computers, and the digital assistants in their homes. They want more product details, more delivery options, more personalized promotions, and faster, cheaper service.

Retailers are investing heavily in the simplification and integration of retail channels and business functions in order to satisfy customers. The investment into a unified commerce platform is really a story about reducing friction through better visibility. Single views of customers, orders, products, inventory, prices, and promotions are essential to reduce customer frustration and manage their omni-channel expectations.

Despite these investments, retailers are still subject to disruptions in their operations and supply chains upstream. No matter how efficient the operations are, if there is a lack of visibility, both into the factory as well as in the customer’s hands, there is a risk of unpleasant customer experience. Paper trails, faxes, spreadsheets – they are not going to cut it.

Retailers embarking on a personal supply chain journey will need the right tools to help them. Companies will always need modern supply chain software, but this is more important now more than ever. To deliver on the expectation of a personal supply chain, retailers need supply chain collaboration between systems and partners all throughout the supply chain.

All the advanced forecasting tools and customer facing technology will fail to deliver customer satisfaction and higher sales without end-to-end visibility into your supply chain. Without visibility, retailers cannot guarantee the ability to keep promise on availability, delivery, and timing – and this holiday season, to customers, a broken promise is personal.

 

Simonsen  Matt (Infor)Matt Simonsen is the Director of Retail Strategy for Infor. Matt is an experienced communicator, teacher, and leader in Finance, Retail, and IT, and is passionate about making a difference and adding value through hard work, deep analysis, and strategic thought. Prior to joining Infor, Matt held various leadership positions with UnitedHealth Group, Insys Group, and Target. Matt received his B.S. in Management Information Systems from Iowa State University, and his MBA in Finance from the University of Minnesota. He currently resides in Minneapolis, MN.

Working toward a sustainable future

By Contributing Author | 11/09/2018 | 6:25 AM

By Ryan Roessler, Convoy Plastic Pallets Product Manager, ORBIS Corporation


Fortune 500 companies such as ToyotaKraft Heinz and Procter & Gamble are making headlines with goals to eliminate waste from their operations in the near future. Because sustainability is a growing public discussion, consumers are more aware of how a company’s internal and external business decisions impact them and the environment.

To maintain momentum, organizations are increasing sustainable practices throughout their businesses, looking beyond consumer-facing products and into their supply chains. But with such complex systems, some opportunities are overlooked. The material used to move goods throughout the supply chain, for example, can unknowingly have a major impact on sustainability. Reusable packaging — such as plastic pallets, totes, containers and dunnage — can increase operational efficiency, minimize packaging waste and reduce resource usage.

To dive deeper into reusable packaging’s sustainable benefits, here are four reasons why reusable packaging can help create a green supply chain:

1. Produces less waste and product loss ORBIS Pallet Image - 10.31.2018

Manufactured to withstand harsh conditions, reusable packaging’s durable all-plastic construction reduces product damage and minimizes packaging breakage. Less breakage means a longer service life and repeat use, unlike what you get with one-time-use packaging. For example, a Virginia Tech Center for Packaging and Unit Load Design study found the useful life of plastic pallets is approximately 18 times longer than wood pallets. Reusable packaging also helps decrease more than just solid waste by streamlining workflows and eliminating excessive walk-time, rework and dwell time.

2. Recyclable at the end of its useful life

Reusable packaging can be fully recycled at the end of its service life and used in other useful products, including new packaging. This decreases packaging’s environmental impact, by reducing the natural resources and labor needed to dispose of one-time-use packaging. Reusable packaging also eliminates the need for plastic bags and wrap, paper and other expendable materials that are not recyclable or as re-purposeful.

3. Ergonomic, with consistent dimensions

Reusable packaging’s dimensions and ergonomic features make it a versatile and cost-effective option for supply chains. Reusable packaging can improve the flow of product along the supply chain to handle, store and move product in a sustainable and efficient way. Especially in a highly automated environment, reusable packaging minimizes downtime — due to unexpected shutdown or delays — because of its standard dimension and debris-free materials. When standardized packaging and automation are combined, it also helps optimize labor.

4. Allows active supply chain assessments

As companies search their supply chains for opportunities to reduce their environmental impact, a thorough environmental analysis can help determine the most effective packaging solution. Every supply chain is different, so understanding the entire system is imperative in deciding if reusables are the most sustainable and efficient solution for a company.

Some packaging suppliers offer an environmental analysis through services that measure the impact a company’s packaging has on the environment — greenhouse gas emissions, solid waste and energy usage. And despite large companies making sustainability improvements, only 25 percent of business leaders say their companies have a business case for sustainability.Therefore, an environmental analysis can help justify the need for reusable packaging.

1Corporate sustainability at a crossroads. MITSloan Management Review. May 2017

Roessler  Ryan (ORBIS)Ryan Roessler — Convoy® Plastic Pallets Product Manager at ORBIS® Corporation — has approximately 4 years of experience in designing and implementing reusable plastic pallets and bulk container systems for the supply chain industry.

 

How Long Will Your System Last? The Reality of Upgrading to Automation

By Contributing Author | 11/07/2018 | 2:45 PM

By John Garrett, Service Manager, PeakLogix

As smart e-commerce methodology proliferates the industry, many organizations are turning to automation upgrades to advance their operations. While it's easy to become hyper-focused on the presale side of integrating automation – getting the drawings right, refining the equipment specifications, negotiating pricing and timing – consideration for what happens after“go-live” is worthy of equal attention.

In our industry, the words “preventative maintenance, service, and continuous training” are often treated like four-letter words. However, the industry’s transition from traditional fulfillment to today's mission-critical, automated conveyor picking and sortation systems, complex robotics cells, warehouse control systems, and data-powered decisions creates an opportunity to reinforce the importance of each, especially maintenance.

When is the right time to think about maintenance?

The short answer is as soon as a company starts thinking about automating their fulfillment processes. As automation and complex systems continue to become more integrated, it’s clear that those who prioritize maintenance will do better long-term, from ensuring fulfillment and delivery to maximizing customer satisfaction and revenue.

While not every business has the budget to run its own maintenance department capable of keeping complicated systems running, every business can invest in the maintenance of their systems and have a strategy for ongoing service while maintaining contingency action plans for unexpected downtime.

Maintenance should be a major consideration when an initial project budget is being created, including a budget forecast for ongoing annual maintenance and training. Clients have asked us what’s the most important part of the maintenance line item in the budget? It’s owning critical spare parts and knowing what you have and where they are being stored. The industry norm, and what we advise for our clients, is to allot approximately 4-5% of the system’s total cost in an inventory of spare parts.

Many organizations may disregard the need for allocating a budget for spare parts or training while the equipment is under warranty. During my career, I’ve seen that this can be a big mistake. Eventually, all equipmentwill need maintenance, service, and spare parts. The most successful companies have invested in an inventory of critical parts as the first-line of defense for minimizing downtime.

The unintended consequences of not stocking spare parts could mean several days of lost productivity – and profits – should a system falter. Investing in this “spare parts insurance policy” could save an organization a substantial amount of time and money over the long term. When the system and its component parts are under warranty, we provide service and maintenance, as do most integrators. But if something breaks in the middle of the day or night, requiring a replacement part that’s not in stock, it can cause several days of system downtime while you’re waiting for the parts to be manufactured, shipped, and installed.

Clients aren't buying automation. They're buying solutions.

While many facilities look to automation for greater productivity or cost savings, what they’re really looking for is a solution that incorporates automation and transforms their business. This isn’t possible without a holistic solution that includes ongoing training.

When we talk with clients about training, we look beyond the buildup to the go-live date. As turnover rates remain steady at about 30% industry-wide, management needs to incorporate continuous training into everyday operations to ensure a workforce that is trained on its systems.

We’ve developed a program at PeakLogix that includes yearly system inspections to ensure our clients’ equipment is running optimally, but also to spend time training their new employees and walking their veterans through any updates or changes.

Employees can't be trained to handle every problem that may arise within a complicated system. Sometimes unanticipated issues occur and worn out parts break. It’s important for facilities to choose an integration partner that can both install the equipment and be available as needed – around the clock if necessary – to address system issues or other items that are bound to happen.

There are issues that need to be handled more urgently than a yearly service contract allows, which is why PeakLogix also offers a hotline and VPN for immediate access and support. We have many stories of clients facing challenges they thought would equate to days of downtime, but, with the right service and maintenance team in place, issues are resolved very quickly and many times with just a phone conversation as we watch the system remotely.

It’s worth noting that these systems need to be treated like your personal vehicle. We wouldn't skip the maintenance on our car or truck for years on end and expect it to keep getting us around town.

And when a machine is run two or three shifts a day, seven days a week, the need for regular maintenance is even more critical – three years of constant running might be the equivalent of ten years of run-time by the manufacturer’s guidelines.

For companies who have poor or non-existent maintenance schedules, they’re at risk of missed commitments, shutdowns, lost productivity, and reduced revenue. The companies that prioritize maintenance and training? They’re typically “Best in Class,” growing their market share and maintaining a strong distance between themselves and their competitors.

 

Garrett  John (PeakLogix)John Garrett joined PeakLogix in 2001 as an installer and has been the company’s service manager since 2008. John is responsible for support of existing and newly commissioned equipment through onsite assessments, training, repair and emergency response, troubleshooting services, and more. He provides and manages the timely and high-quality service support that minimizes customer downtime as well as oversees specialized client projects.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About One-Off Sound-Off

Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.



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