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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

August 21, 2013

Outdated Software Increases Risk of Catastrophic System Failure

Understanding Who Is Responsible for Maintaining System Operational Integrity

Holste Says:

Users should take steps to protect their investment against operational obsolescence through regularly scheduled system audits and updates.
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Previous Columns by Cliff Holste

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Sorting It Out: For Shippers - Benefits Of Real-Time Control In The DC Are Huge!

Sorting It Out: Shippers Looking to Improve Operations Choose Customer Centric Approach

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Material handling systems that are +5 years old are probably operating with outdated PLC/PC programs, and worse yet, software code that can no longer be supported.

Given the speed at which technology advances, after about 3 years of operation, industry experts recommend that companies begin the process of updating their systems controls and software. This will protect against operational obsolescence and premature system failure.

Unlike the providers of WMS and other types of business software, material handling system equipment providers generally do not have contractual policies in place that relate to providing software upgrades. They rely on their customer service representatives and distributors to maintain an ongoing relationship relative to maintaining and updating installed systems. However, they have no contractual responsibility to provide follow-up services. In other words the customer must take the responsibility for keeping their material handling equipment and associated software systems current.


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

There are important differences in the way software providers (i.e. ERP & WMS) and material handling equipment providers support their customers. One is contractual, the other in interactive.

With few exceptions, companies that provide enterprise logistics and management software 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 an ongoing licensing type of agreement included in the initial sales contract.

Material handling equipment manufactures and system integrators provide software that is specifically written to enable operational functionality for the equipment they provide. This “machine” software 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:


As a matter of policy, software companies specializing in providing business management software systems (ERP/WMS) to a broad range of users, regularly upgrade their software programs 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 system configuration. 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 intrinsic to 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 appropriate levels of training, 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 insurance 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 system 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 physical material handling system there will most likely be subsystems and peripheral equipment not manufactured by the system contractor. 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 WMS or WCS.

Outsourcing system controls engineering and software to a third party is a common practice for some integrators.

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.

While it is true that mechanical equipment (conveyors, sorters, etc.) can remain serviceable for a decade or more, the controls and software that enables them can go extinct in just a few years. Users should take steps to protect their investment against operational obsolescence through regularly scheduled system audits and updates.

Final Thoughts

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 squarely on the users shoulders! Left unchecked, at some point a hard drive failure, or even a relatively minor control device breakdown, could have a catastrophic effect on the DCs ability to ship orders.

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