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April 7, 2017 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Trip Report - ProMat 2017 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet New Cartoon Caption Contest Begins bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts

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April 6, 2017 Contest

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Holste's Blog: DC Automation - Adoption Problematic For Some Businesses

ProMat 2017 Video Review and Comment
Day 1 Day 2

Weekly On-Target Newsletter:
April 6, 2017 Edition

New Cartoon! Barnes on 3PLs, Air Cargo Drone, RFID Implants, ProMat 2017 and more

Why Multi-Tier Supplier Collaboration is More Important Now

by Gary M. Barraco
Director, Global Product Marketing
Amber Road

March Retail Vendor Performance Management Bulletin from SCDigest!


How many company members (MHI represents materials handling industry-related hardware, software and a few service firms) does MHI have?

Answer Found at the
Bottom of the Page

Trip Report - ProMat 2017

I am just back from two days at the ProMat 2017 show at the sprawling McCormick Place convention center along Lakeshore Drive south of downtown Chicago, where materials handling editor Cliff Holste and I spent a hectic couple of days pounding the show floor and looking for cool and interesting new solutions we could bring to SCDigest readers.

You will find what caught our eye in our video review and comments for Day 1 and Day 2, which usually include videos of each of these different hardware and software solutions we call out. Thousands of you have already viewed these videos - there is nothing else like them in the industry, recorded under some duress at the end of each day right on the show floor and all editing that same night - I encourage you to take a look.


No one will have time to sort through all the options in technology and vendors for piece picking automation, so good luck.


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Just as some quick background, ProMat is a massive show managed by MHI (formerly the Material Handling Industry of America) that runs bi-annually in Chicago in odd number years. In even years, there is a similar but slightly different show called MODEX in Atlanta MHI launched a few years ago.

At ProMat, material handling-related systems of all kinds for distribution and to a lesser extent manufacturing dominate the aisles, though there is plenty of supply chain and logistics software there too. The materials handling side covers a very broad and diverse array, from fork truck battery charging systems and all sorts of casters for carts and more to completely automated distribution centers and increasingly sophisticated robots of all sorts. More on all that in just a bit.

As a side note, in recent years, for a variety of reasons, the materials handling automation market has been strong, somewhat defying its normal very cyclical nature. This has led to strong demand for space at both ProMat and MODEX, bolstering MHI's financial picture, and in part allowing the organization to invest in other areas, such as its annual conference, which it is trying to build into a more main stream supply chain event.

As evidence of that market strength, once again this year ProMat was held in conjunction with another show called Automate. We walked across the lobby area to that show on Tuesday, and while we found a number of robotic vendors there as you would expect, half if not more of the space was taken up by vendors that had not much to do with automation per se, and which we we suspect were overflow vendors that couldn't secure space in the main ProMat hall, and were offered spots in Automate as a fallback.

It often takes Cliff and me two days to identify the broader show themes and trends, and that was the case again this year, even though the main one was staring us in the face on day 1.

I will start this way: as much of an impact as we all understand the growth of ecommerce is having on supply chains, we are still underestimating that impact. At ProMat 2017, the show simply revolved around ecommerce.

Not that many years ago, Cliff and I came back from a ProMat show touting the theme of "automated case picking" or what we called ACP. We were close then, we said, to a sort of Holy Grail of distribution - affordable solutions to automating the picking of individual cartons, using a wide variety of different approaches. Much of the focus was on the beverage industry, with the thought that success there would then lead to opportunities in consumer packaged goods, retail and other sectors.

It was exciting stuff - and almost totally absent from this year's show. If you came looking for automated case picking technology, you would not have found much on this year's show floor. Is that because the adoption of ACP is just going very slowly? I am not sure.

But what I do know is that if you were looking for automated piece picking systems, you were likely to feel like a kid in a candy store - though possibly even more overwhelmed.

There was aisle after aisle of piece picking systems, from partially automated (e.g., many "goods to picker" systems) to fully automated.

All this of course driven largely by ecommerce, and the resulting need to pick and pack individual items, not full cases. So called "piece" or "eaches" picking has been around for decades, or course. What is changing it that ecommerce is driving the volumes of eaches picking for many through the proverbial roof, and/or causing some companies, such as consumer goods manufacturers and some retailers, to do eaches picking for the first time.

Piece picking is also expensive operationally - and those costs are contributing to the challenges many consumer goods firms and retailers are having becoming profitable in ecommerce channels.

So piece picking systems were everywhere, dozens of them. I will make a couple of comments on that:

First, I am not exaggerating much when I say the technology to grab individual items and put them in a carton or tote has largely been solved. There were many systems at ProMat doing that robotic piece picking successfully at high rates of speed.

What's more, the challenge now is really not so much the physical grabbing (including actual gabbing, vacuum systems, etc.) but in the vision and software systems to speed up the picking process and improve accuracy - and progress in those two areas is occurring at a rapid pace.

All that means that for most companies, the issue will not be whether there is a robotic system that can do eaches picking for your products, which was the main question just a couple of years ago. The questions instead will be around what the total system design will be, what will be the replenishment and takeaway systems look like, how much do you need to spend and what is real ROI from the investment, etc.

On the Day 2 video, Cliff also noted a couple of key issues: (1) Every system has down time - should you/can you have a manual (human) back up in case the automated picking system fails? This is a tougher question than it might seem; and (2) Companies investing in these systems will have to staff or source technologists that can keep these robots running on both the hardware and software fronts. They don't have these people today.

My second observation is that there are now so many choices that it will be a significant challenge to find and sort through all the alternatives. I could say it another way: no one will have time to look at all the options in technology and vendors, so good luck. I have some ideas on what SCDigest could do to help in that regard, so stay tuned.

In terms of the overall show themes, another one is the escalating battle between traditional Warehouse Management System (WMS) providers and Warehouse Control System (WCS) over which software will control the overall picking process.

A growing number of WCS providers say most WMS systems today do not optimize that process very well, especially if automation is involved, and are throwing "data science" at the problem to improve results. We are also starting to hear the term "Order Execution System" to describe a new class of software that is focused on the most effective way to pick and pack. More on all this soon.

Finally, a minor theme at the show is the slow but steady growth Chinese equipment and system manufacturers trying to enter the US market. There were many booths from such vendors - far more than the last ProMat - often ganged together in a row of simple 10 x 10 booths, and generally featuring very basic equipment like carts and shelving, with confusing and even sometimes accidentally funny signage.

But no doubt those offerings come with aggressive pricing, and a few of the vendors were displaying more sophisticated equipment. Notably, in one of the major announcements connected to the show, well-known consulting firm Tompkins International surprisingly announced it had become the sole North American distributor for a new line of small AGV robots from China that are used in a very interesting system for - what else - piece picking. US and European materials handling vendors beware - the Chinese competitors are coming.

That's my overview of ProMat 2017. Next week, I will highlight the best new solutions Cliff and I found at the show, including the new Tompkins picking system and many more. Again, most are in the Day 1 and Day 2 videos, which are very good if I do say so myself, in an approach only available from SCDigest.

Any reaction to Gilmore's ProMat trip report? Where you at the show, and if Yes what caught your eye? Let us know your thoughts at the Feedback button below

View Web/Printable Version of this Column

On Demand Videocast:

Innovation in Shipper-3PL Relationships Benchmark Study Results

New Research will be Unveiled from SCDigest and JDA On This Increasingly Important Topic

In this outstanding broadcast, SCDigest and JDA recently completed new research study on innovation in shipper-3PL relationships, with the goal of obtaining the perspectives of both shippers and service providers on this increasingly important topic. All registrants will be sent a copy of the report will all the data shortly after the Videocast.

Featuring SCDigest editor Dan Gilmore and Danny Halim and Lori Harner of JDA.

Available On Demand

On Demand Videocast:

New Cloud WMS Solution is Game Changer for Warehouse Management Deployment and Flexibility

New Technology and Deployment Approach Offer a Simply Better Way to WMS Implementations - Learn How

In this outstanding Videocast, we will cover the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids.

Featuring  Dan Gilmore, Editor, along with Mark Hawksley and Bruno Dubreuil of TECSYS, a leading provider of WMS solutions.

Available On Demand

On Demand Videocast:

Successful Supply Chain Vendor Compliance - for Retailers and Beyond

Author Norm Katz on Vendor Compliance "By the Book"

In this outstanding Videocast, Katz will summarize key elements of book, to include: Compliance program guiding principles; What is permissible under the law relative to vendor chargebacks; Common mistakes companies make in rolling out and maintaining vendor compliance programs; The many "E's" of successful vendor compliance, from "Envision" to "Ethics."

Featuring  Dan Gilmore, Editor, Norman Katz, consultant and author of "Successful Supply Chain Vendor Compliance," and Greg Holder, CEO, Compliance Networks

Available On Demand


We received just a few feedbacks from last week's column on An Inflection Point in Supply Chain Planning? by SCDigest editor Dan Gilmore. But that includes a great response from consultant Dr. Chris Gopal, who thinks Gilmore is spot on.


You'll find his comments as well as a couple of other below.

Feedback on An Inflection Point in Supply Chain Planning?


Some thoughts on this piece:

Firs, this is an excellent and timely article and one, I think, which deserves to generate a lot of discussion. Given the excitement that is starting to get generated, it would be interesting, at this stage, to see the incremental projected benefits of these next-generation, AI- driven planning systems, relative to their total cost (acquisition, configuration, maintenance, change and implementation - including potential disruption in the "cracks" when one system is pulled out and another put in). I suspect these costs would be significant.
By "incremental" I mean those benefits that would be obtained net of what can be obtained via good business practices and improvements. It would be equally interesting to look at these costs/benefits v. those of the systems that are available today.

I bring up the "change" piece, because it seems that there are a potentially huge number of parameters and variables to consider in today's dynamic S&OP Process (now being called the "SI&OP Process). While these may be completely doable for "straight" processes that are wrinkle-free (third-party fulfillment, simple supply chains with few suppliers, few product variations, high resource-intensive manufacturing where the priority lies in equipment utilization, etc.), it becomes a little more daunting for other, more complex supply chains. Running thousands of scenarios is excellent (and may be required by the complexity of decision making), but at what point do we run into diminishing returns?

Among the factors that need to be considered (at different levels, anyway) are:

Decisions: The typical spectrum of decisions that have to be made includes Placing orders, Quantities, Suppliers/Source selection, Geographies, Manufacturing location/Source selection, Shipping/DC source selection, Shipment dates, Modes, Expediting/De-Expediting/Push-in/Pull-out, Direct to customer/DC, Shifting Customers and Destinations, etc.

Priorities which drive the decisions - Revenue, Margin, Working Capital and Inventory, Product, Customers and segments, Channel, Geography, Product Life Cycle

Trade-offs that must be factored in - functional metrics driven by Sales, Marketing, Finance, Operations

Trust in the system, the algorithms and "intelligence" built into the system (always an issue with executives, particularly when the complexities of the system are difficult to understand).

All these are subject to change (often frequent)- driven by changes in management (different executives have different priorities), economic and customer conditions (what's good today can be bad tomorrow, and vice versa) - and will be different by company and division.

The question: how would self-learning and the new AI-planning systems handle this? This may be a topic for future discussions in the column.

Again, a terrific piece.

Christopher Gopal, PhD


I think this was a very insightful column and I agree we may be entering a new world or era of supply chain planning based on analytics.

The challenge will be that so many companies are wedded to current planning technology and processes. So making the change to a new analytics-oriented platform will not be easy.

But we have had just incremental progress in planning technology for many years now. The technology you describe will bring step changes and paradigm shifts, and I agree that organization and processes will need to rapidly evolve to meet this "always on" planning environment.

How will that impact Sales & Operations Planning? That is a key question.

Roger Driscoll
Lafayette, IN




Dan Gilmore wrote: "I was very struck that at several of the case study breakout sessions, companies were simply limited in what they can do in demand and supply planning by a lack of staff. One well-known, global cosmetics firm cannot get to retailer-specific forecasting because it just doesn't have the human bandwidth, for example, a theme that ran through several of the presentations."

I think this company could benefit from Sparkcognition (Austin, TX). Based on what I know (my son works there) they make this easy. For another company they eliminated the need for a ton of people looking at the data.

Thomas A. Moore
Warehouse Optimization



Q: How many company members (MHI represents materials handling industry-related hardware, software and a few service firms) does MHI have?

A: About 800, each of which pay an annual fee to MHI; MHI does not have individual memberships, like a CSCMP or WERC.

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