From SCDigest's On-Target E-Magazine
Sept, 21 , 2011
Logistics News: Gilmore, Banker, Forger offer Insights into Logistics and Warehouse Management Trends
AGVs, Multi-Modal Data Collection Making Strong Moves in the DC, Panel Says; Don't be the Last to Implement Labor Management; More Automation Cometh
SCDigest Editorial Staff
SCDigest editor Dan Gilmore was part of a panel discussion on distribution and Warehouse Management System (WMS) issues this week in Orlando at the HighJump Software user conference. Also on the panel were Gary Forger, Vice President of Professional Development at the Material Handling Industry of America (MHIA) and Steve Banker, an analyst at ARC Advisory Group.
The panel was moderated by Chad Collins and covered a wide range of topics, highlights of which are covered below.
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| Forger wondered whether in a sense some companies might be reluctant to expose some of their "distribution baggage" that might come to light after an LMS deployment. |
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What Do You Say?
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Collins began by noting that while in many respects the WMS market is very mature, there still seems to be a lot of interest and adoption.
Banker agreed that the market is mature, and said a recent ARC study found that 2011 sales are likely to be flat or grow just a few percentage points over last year.
However, Banker noted that there could be accelerated market growth in storage areas different from traditional warehouses that might benefit from greater system control with some form of "WMS light."
"A stock room at a hotel is a form of warehouse. The supply depot on a cruise ship is a form of warehouse. There lots of these examples," Banker said.
Gilmore noted that even though the market is mature, "The WMS industry manages to keep inventing itself." He also said there were some important differences in WMS versus most other supply chain software application areas.
"A big difference with WMS is that distribution centers keep getting built. Every time that happens, some software company is likely to sell a new WMS. That dynamic just isn't true for TMS, demand planning and many other supply chain applications," Gilmore said. "It also forces a company into a decision about whether to keep whatever warehouse technology they have now or step up to new capabilities, whether that's with a current provider or a new company.
Gilmore also said that customer needs continue to evolve, as do supply chain process models, such as greater use of postponement activities, or a company such as Kimberly Clark that has brought co-packing operations that used to be done in outside facilities right into some of their distribution centers (though the operations are still run by third parties).
"This all makes the WMS market and customer requirements very dynamic," Gilmore said, even in a WMS market that seems to be mature.
In terms of technology trends, MHIA's Forger said that he is definitely seeing a rise of interest in automated guided vehicles in distribution applications, though they may be called robots or some other name.
"AGVs have never seen much adoption in distribution, but this is starting to change," Forger said, noting that the equipment itself has changed to handle smaller loads more effectively, serve as mobile carts, load and unload pallets on to and off of trailers, and other support other applications. This has expanded the appeal of AGVs to the types of use cases neded in distribution beyond just static point to point, heavy load movements that historically characterized AGV deployments in manufacturing.
Banker says he likes to think of these new age AGV implementations as "flexible automation"
systems that can be more appealing than big conveyor systems that must be bolted to the floor and are perceived as hard to change.
He said that many of these more traditional systems required a heavy investment that often led to payback periods of up to five years, acceptable for many companies but not especially attractive. He said that many of the flexible, robotic-based solutions can deliver payback in about two years, more similar to the returns seen from WMS and other supply chain software solutions, which should lead to more aggressive adoption.
Forger added that recent MHIA surveys have shown aggressive plans for adoption of automation by companies over the next couple of years even in these lukewarm economic conditions, a level of interest noticeably higher than previous few years, as companies look to solve labor challenges through automation.
Why not More Labor Management?
Collins observed that while that while there has been strong growth in adoption of Labor Management Systems (LMS) and consistently high levels of returns, there are probably a lot more DCs that don't have LMS that those that do - and he asked the panel why that was the case.
Banker said he didn't understand that dynamic either, and wondered if many logistics operations were simply afraid of bringing in industrial engineers into their operations.
(Distribution/Materials Handling Story Continues Below) |
