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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News

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.

July 20, 2016

Logistics News : When Looking To Improve Operations, Shipper Can Tap Into a Variety Of Expert Resources


Keeping a DC Project Moving Forward Increases Implementation Chances

 

It can take months or even years to develop even a modest DC automation project. Unfortunately, for companies with limited internal resources, the amount of time involved can be a deterrent. However, by developing an informal relationship with an equipment or system provider, who is willing to share their concepting and budget pricing expertise, the project can move forward at a much faster pace.


Holste Says...

By developing an informal relationship with an equipment or system provider, who is willing to share their concepting and budget pricing expertise, the project can move forward at a much faster pace.

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Materials handling vendors often consider this kind of preliminary proposal development effort to be an essential part of their overall sales strategy. They have a substantial interest in getting viable projects through the approval process. By freely assisting in that process, the vendor is in a sense willing to gamble that they will gain favor when it comes time to close the deal. It’s a high stakes game as the project may never be approved for purchase.

Independent consulting firms who are primarily in business to sell their expertise have no interest in providing free consultation. They would say “you get what you pay for”. Still, utilizing the services of a qualified vendor, especially one who has design-build experience, may be worth considering if funding for independent consulting is not currently available. 

For the shipper this approach has both risks and rewards:

  • The vendor’s proposal will be based on questions they ask and answers the shipper provides. The shipper is responsible for the accuracy or their answers. The vendor will probably not spend much time probing for more detailed information, especially during the preliminary design and budgeting proposal stage. Therefore, there is some risk that the shipper’s unsubstantiated assumptions will be treated as fact.

  • The vendor may offer more than one proposed solution at different price points. While this is good, they will all be based on the application of equipment and services available in the vendor’s “tool box”, which may or may not be your best choice.

  • The vendor’s salesperson or account manager has a vested interest in seeing this through to a successful conclusion and will therefore be doing whatever is appropriate to promote the project, including setting up site visits to see the proposed equipment and/or similar systems in operation. This effort will keep the project alive even when the buyers focus may be diverted.

  • Having gone through this process, the shipper will have gained insight and broader understand of their company’s specific operational issues and possible solutions. This, plus the concept drawings and budget proposal provided by the vendor, are very valuable building blocks regardless of whether you immediately proceed with the project or not.

Hopefully, eventually your project will be approved. If at that point you have concerns relative to the solutions proposed by the vendor, you always have the option of hiring a consultant or industry expert to evaluate the vendor’s proposal and provide their independent opinion and alternatives. Further, depending on the complexity of the proposed solution, it may be advisable to obtain a computer generated graphic simulation to provide further “proof” of performance.

Final Thoughts

A DC project that never gets off the ground is a lost opportunity for the shipper as well as all of the various potential service and equipment providers, and in the broader view the logistics supply chain losses an opportunity to become more efficient.

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