Supply Chain Digest / Distribution Digest recently published a report on Automated Case Picking (ACP) solutions that has generated considerable interest (to download the report, go to Automated Case Picking 2009: The Next Frontier In Distribution Center Management).

Interviews and feedback received from logistics executives clearly indicates that while they see the potential ACP offers for their operations, there is some understandable concern relative to actually satisfying the expected ROI.

So, if you’re feeling somewhat perplexed about how to ensure your ACP project will deliver the expected ROI, you have good reason to be concerned. This is because there are factors in “real” project life, irrespective of the type of system, that alter the flow of cash and depending on exactly how those factors play out determines how close the project comes to its promised ROI.

Does all of this mean that logistics companies should shy away from automation projects? Not at all! If you don't invest in the future, it will surely be bleak. Instead, observe the following important principles when working through the financials of your ACP project.

• If the project won't fly with a realistic budget, then don't start.
• If the system is large or especially complex, it may be a good idea to divide the project into steps or phases that are more readily manageable. This approach also allows for some adjustments to be made to future phases to accommodate business, system design, and/or operational changes. The ACP solutions described in the report (referenced at the top of this article) are for the most part modular and scalable, and are well suited for a phased project approach.
• Be a clock-watcher. Time is everything.
• To help ensure that your project stays on budget and on schedule, an experience Project Manager (PM) must be a key player throughout the design and implementation phases. A PM is most often included as part of the system providers services. But, you need to understand that the provider’s PM works for the benefit of the provider. To increase your comfort level, you can hire a consultant or industry expert to provide independent PM services. See – Who is really in Charge of Project Management for your Materials Handling System in Distribution?
• Prepare for extra help and training at start-up to avoid costly delays.

This last point cannot be over stressed. In addition to the PM, an internal startup support task force should be assembled well in advance of the project completion date. The mission of the multi-discipline task force is to provide all the technical and management resources needed to keep the project moving forward and on schedule. Planning for the task force early in the life of the project helps to ensure that the right personnel are available when they are needed. When people unfamiliar with the original planning and system design are brought on board in the late stages of the project, there is a danger that overall system objectives, no matter how well documented, will not be fully understood or properly supported and implemented.

Final Thoughts

Be cautious, but be bold - ACP represents the future of materials handling automation in the DC. There has been an enormous amount of R&D spent in the development of ACP technologies and in the application of advanced methods and processes designed to deliver the highest level of system performance and productivity. You can be assured that providers of ACP realize what’s at stake for them as well as for you – both parties have skin in the game.

Agree or disgree with Holste's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

You can also contact Holste directly to discuss your material handling or distribution challenges at the Feedback button below.