Package handling conveyors and sorters (referred to as material handling systems – MHS) have been in use for decades in large, complex distribution environments. These custom designed and engineered systems, along with highly customized Warehouse Management Systems (WMS) that drive them, have long been the centerpiece of the best-of-bread DCs and will continue to play a significant role as the megatrend towards Automated Case Picking (ACP) in the DC continues to advance the state-of-the-art. For more info on ACP read “Automated Case Picking 2009” and look for our new 2011 report to be published later this year.

Up until a few years ago, MHS was a justifiable option for only medium to high volume distribution operations (shipping >20K loose cases per day). More recently providers of MHS (comprised of manufacturers and system integrators) began moving towards more modular equipment and scalable system design - thereby lowering the entry level volume to include small to medium DCs as reported in Distribution Digest Material Handling Tech Note: “Advances in Conveyor Technology Increases System Flexibility”.

This effort has resulted in MHS solutions that are less complex and more affordable alternatives for a wider range of companies, including those with relatively small distribution operations (shipping <20K cases per day). A good example is the “Poor Man’s Sorter” as previously reported in Distribution Digest.

In this smaller DC environment, integration of MHS with the company’s existing ERP/WMS is a key factor in achieving cost reduction and efficiency improvements. So, in addition to more affordable MHS, the introduction of standard integration protocols has greatly reduced complexity and startup cost/time.

This is a game changer because more small to medium size distributors can now enjoy many of the same operational benefits once only practical for larger volume distributors. You will be able to see much of this technology on display at ProMat 2011.

MHS Benefits Available To Small DCs

Small to medium size DCs can take advantage of the more modular/scalable MHS solutions now available to provide improvement in two key areas – efficiency and accuracy. MHS when integrated with a WMS organizes processes and material movements. This can then in-turn result in better workforce utilization and productivity while lowering order cycle times, and greatly reducing inventory and order fulfillment errors.

Technologies like RF and voice picking can be easily integrated into the MHS/WMS to further enhance performance.

Another benefit for the small operation, and perhaps the most important one, is that a MHS/WMS solution allows the company to move away from departmentalized thinking towards viewing the operation as one entity. This is made possible with real-time communications between the MHS and the WMS and is essential for companies that wish to maximize returns on their system investment.

Other benefits typically include:

• Optimizing material handling resources – people and lift trucks;
• Minimize inventory levels and increase inventory turns through improved cycle times;
• Faster order processing times;
• Minimize non-value added travel through batch-order picking or product-to-picker strategies;
• Improved order accuracy.

Buyer Beware - Challenges to MHS/WMS Integration Still Exist

As mentioned above, MHS is most effective when integrated with a WMS so that the various devices communicate in real-time to optimize DC operations. Most high-end MHS and WMS providers support the major industry standard integration protocols. However, customers who have older equipment and software systems, or who are considering purchasing a low-end WMS, may face several challenges:

• Multiple Vendors – The industry is fragmented and there are many different equipment and software vendors worldwide, most with their own custom protocols for system integration.

• Multiple Business Flows – MHS can affect a wide range of business processes. Without standard integration protocols, custom code must be developed.

• Integration Complexity – Integration often involves interfacing not only with other systems, but also with low-level components or material handling devices like a carton sealing machine using PLC commands.

• Absence of Standards – Each equipment type and vendor interface is unique. A robust, configurable WMS/MHS integration is essential for successful system operation.

Unfortunately, these issues (multiple vendors, a lack of messaging standards, etc.) often results in having to build custom integration between sub-systems and/or automated equipment, which increases complexity and cost.

To eliminate the integration layer, companies should consider vendors that support standard or universal protocol as part of their solution. This will make it possible to connect directly from the ERP/WMS to the MHS and enable the company to reduce its total cost of ownership and benefit from a more flexibility deployment.

Final Thoughts

Communication standards are constantly improving with more robust integration layers becoming common across leading ERP/WMS and MHS providers. This will result in less need for third party control systems, less complexity and lower cost options. All of which is good news for the small DC operation looking to compete with the big guys.

Agree or disagree 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.

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