In a recent article we reported that as material handling systems age vendor provided proprietary software code, that enables sub-systems as well as individual pieces of equipment to function, eventually becomes extinct (see – Pro-Active Approach to System Optimization Management). Based on the questions and comments we received, it appears that this came as a surprise to unsuspecting DC operations managers. So, we thought it would be appropriate to offer a bit more explanation as to how this can and does happen.

Understanding The Difference Between Software System Providers and Material Handling System Providers Relative to Software Support and Maintenance

There are important structural and policy differences in the way logistics software and machine software is sold, supported and maintained by business management system providers as compared to material handling system providers.

From a broad prospective, companies that provide enterprise logistics and management software generally do not provide physical material handling systems. Their product offering consists of business management software, such as Enterprise Resource Planning (ERP) & Warehouse Management System (WMS) running on the buyers host system or a mainframe computer. They typically offer a broad array of highly specialized, proprietary software packages, plus related educational, training and support services, all of which are offered under a licensing type of agreement.

Material handling equipment manufactures and integrators provide software that is specifically written to enable operational functionality for the physical systems and equipment they manufacturer. This “machine” software code may run on a PLC or a PC. Additionally, there may be several small microprocessor applications. They may also provide (sometimes through a third party controls engineering firm) an integrated material handling system controller/director, referred to as a Warehouse Control System (WCS) that interfaces with the host system (ERP/WMS) and is capable of receiving downloads, executing operational commands as well as providing system performance data and related summary reports. All of this type of software is provided under the material handling system sales, installation, and equipment warranty contract. The software warranty can be (in some applications) limited to 90 days from system acceptance.

The following will attempt to provide some insight as to what this means to the buyer:

• Business Enterprise Logistics & Management Software Providers:

It is the policy of software companies, who specialize in providing business management software systems (ERP/WMS) to a broad range of users, to regularly upgrade their software programs as required to keep users “current”. For the most part upgrades within a particular “version” are minor enhancements to existing programs or modules. Oftentimes, users have the option of accepting the upgrades, or not, depending on the particulars of their individual system operation. However, other times users are required under their license agreement to accept and install critical software code changes/revisions. In most cases the software provider makes the required code changes through a modem directly into the users system.

 

These upgrades and code changes are a necessary and on-going part of the development of advanced software technology. As such, based on the typical software license agreement, providers are required to keep their user’s software current as well as providing training for IT personal, and users are required to accept the updates.

 

In addition, every few years an entirely new version of the software program may be launched. When this happens, if the user does not agree to move to the new version they run the risk of eventually losing the ongoing software support normally offered by the provider. So, because no one wants that to happen, frequent upgrading of this critical business management software is a fact of life. This practice is therefore accepted by most users as an ongoing investment to protect against operational obsolescence.

• Material Handling Equipment & Systems Providers:

Material handling equipment manufacturers and system integrators are primarily focused on designing, engineering, building, and implementing the physical material handling solution for their customers. For the most part, the on-going maintenance of that system is the responsibility of the buyer, although many vendors offer optional follow-up audit and PM programs, as well as emergency troubleshooting services.

 

Within the integrated system there will most likely be subsystems and peripheral equipment not manufactured by the system integrator. It is not unusual for system integrators to outsource equipment and subsystems that are not a standard part of their tool box such as; automated picking, weighing, labeling, packaging, wrapping, auto-palletizing and robotics just to mention a few. Most of these subsystems have their own PLC/PC or microprocessor control and software programs, which are being directed and managed by the WCS (assuming there is one).

 

It s important to be aware that depending on production scheduling issues, some, or all, of the system controls design, engineering, and software may be outsourced by the system integrator to a third party contractor.

 

Once all of this “individual” software is commissioned, debugged and becomes stabilized it can be expected to function reliable (in the background) for many years.

 

This is both good and bad news. The only time the proprietary software provided with the various subsystems, including the WCS will become the center of attention is when physical changes to the system and/or processes are required. Until then it can be essentially “forgotten” for many years, or until there is a problem, at which time the software code may no longer be supported.

How Does This Happen?

The typical mind set of far too many DCs is – “if it’s not broken, don’t fix it”. As a result many DC systems that are +5 years old are probably operating with outdated control devices and PLC/PC programs, and worse yet, software code that can no longer be supported.

To emphases this point I can recall a system installed in a privately owned auto parts distribution center by a large Systems Integrator (SI) for whom I was working at the time. The SI designed, engineered, installed, and commissioned the batch order picking and sorting system a little over 10 years ago. After a few years of operation the SI “suggested” replacing and updating various aging control devices with new up-to-date components. The company said that they could not justify the cost at that time. They felt that the original control devices were working just fine and the software was stable and dependable – they were experiencing no unusual problems.

Unlike the business software industry, material handling system providers do not contractual policies in place that relate to providing and accepting software upgrades. In other words all the SI could do was point out the long term consequences of not accepting the recommended updates.

As time went on the SI informed the company that many of the critical control devices were no longer available and supported by the original manufacturers. In addition, time was running out on the SI’s ability to support the now obsolete WCS software programs running their system. Still, the company was not sufficiently motivated to take action, but instead kicked-the-can further down the road.

Eventually, the company hired an IT person who immediately panicked when he realized the system controls and software programs were obsolete and no longer supported by the SI or the various sub-contractors. In fact, spare parts for much of the existing control equipment, including PCs / PLCs, and bar code scanners were no longer available from the original manufacturers.

The IT person knew that the entire system had fallen into a state of operational obsolescence. The old system software operating system would not run on a new generation PC. At this point a hard drive failure, or even a relatively minor control system failure, could have a catastrophic effect on the DCs ability to ship orders to its customers. A lighten strike could put the system out of operation indefinitely.

Yet another proposal was provided by the SI, and submitted to the Board of Directors for emergency funding. Yes, it was very expensive because at this point the entire controls and software system had to be updated PDQ.

Final Thoughts

Unfortunately, this story is not all that uncommon. Part of the blame lay with equipment/system vendors, who while trying to close a sale, do not want to expose the actual cost on ongoing system maintenance. Nor do they want to scare the customer with doomsday scenarios that could result if controls and software systems are not kept current. Part of the blame lay with users who see equipment related upgrades as an unbudgeted cost instead of an incremental investment.

Of course, users should be cautious against the onslaught of new features that fall into the nice-to-have category. However, protecting your aging material handling system investment against operational obsolescence is “Mission Critical” and squarely on the users shoulders!

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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