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From SCDigest's On-Target E-Magazine

- June 29, 2015 -

Supply Chain News: John Hill Unplugged Full Transcript Part 2

From the Rise of the MHI Organization to Key Mentors to a Vision for a Better WMS, Dan Gilmore Hill Discuss Supply Chain Trends and History

SCDigest Editorial Staff

John Hill is a legendary figure in the Warehouse Management Systems and automatic data collection worlds. Currently a consultant with St. Onge, he was CEO of WMS pioneer in the late 1970s/early 1980s, a company that helped define the modern WMS market and which produced a large number of professionals that greatly influenced the industry after Logisticon's ultimate closure.

He and a small group of folks - notably the late Dave Scott - ran a small consulting firm called Cypress for many years through and beyond the 1990s that had influence in the market well beyond its size. He was a fixture giving conference presentations for years, to the point many assumed he was running a very large consulting firm. He has been highly involved and influential in the MHI organization (the former Material Handling Institute) and automatic identification group AIM, and indeed is a chart member of a group called the AIDC 100.

In the Fall of 2003, just weeks after the first issue of Supply Chain Digest in September, Hill did the very first "unplugged" interview with SCDigest editor Dan Gilmore. Now he's back in 2015 with a much longer discussion, summarized in Gilmore's First Thoughts column last week. Last week, we ran the first half of the full transcript of that interview, which can be found here: John Hill Unplugged Full Transcript Part 1

SCDigest Says:

Someday, I think someone is going to do it, bring such a WMS to the market. Users will by it, generate their own software just for their needs, and improve their operations.

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Below now is part 2 of that full interview:

Gilmore: Ok, let's change gears again. What are some of the key trends you see now in supply chain and logistics.

Hill: Ok, I could go on for a long while on this, but it may just be easier to point you to two important documents that MHI has produces over the past couple of years, onE being the Material Handling and Logistics Roadmap, and more recently the MHI Industry Report, which was introduced at ProMat in March.

I think those reports are very much on the money in terms of key trends that I need to expand on them. What's important is that MHI is an 800 plus member organization of material handling equipment and systems companies, and quite a few of them are connecting the trends and data in those reports to their own company strategies and product development plans.

I just got back from the MHI Spring meetings a couple of weeks ago, and heard any number of companies, both large and small, which have taken those reports to heart and are going to be using them to help guide their plans. I think MHI nailed it with these two reports.

Gilmore: OK, let's move to topic of the MHI organization - what's going on down there in Charlotte? Certainly of late MHI has moved too much more of a supply chain focus, versus strictly material handling, and seems right now to be very ambitious. What's happening now, and what can we expect in the future?

Hill: Well first, George Prest, who came in about three years ago as the CEO, has put together a very solid team of people to augment what was already a good core team. That includes bringing on Daniel Stanton from Caterpillar, who brings a lot to the table. He really knows supply chain, and brings to MHI's members a level of understanding not only of the technologies but also why and how members can benefit from MHI programs.

Stanton in turn has brought on some other new staff that comes from industry, not the material handling vendor world. These guys all know their stuff, and can interact with the members and help connect them with what end users are really looking for.

Gilmore: That's really a key part of my point. I don't think MHI would have been bringing in supply chain types even just a few years ago.

Hill: I don't think so either. The other key development is that although MHI has had the appearance of being outwardly focused, with seminars, conferences, educational materials and the like, the main focus of the product groups within MHI has been the individual product areas, the development of standards, and things of that nature without a lot of interaction with the actual users of those systems.

But now MHI has launched two new solutions groups - one around automation, one around information systems - whose focus is on greater interaction with the user community in a non-commercial fashion. They will form the basis for other such groups.

The mission of the information systems group, for example, is to "enable practitioners to dramatically improve and sustain supply chain performance by providing access to proven information systems technology, tools, software and best practices through peer networking, publications, focus groups, conferences, and seminars, and become the go to resource for selection, integration, deployment and use of existing and future information systems solutions for world class supply chain management."

That's obviously a mouthful, but that is a dramatic difference from the charter the traditional product groups within MHI. These groups are already engaging with a number of people within the user community, and the feedback from that outreach will help focus the activities of MHI members.

Gilmore: Well again, things really are on the move down at MHI. You mentioned automation there, so let's look in that direction for a few minutes. There is a lot happening there, in terms of robots and goods to people systems and more. Are we going to see sometime fairly soon a lot of DCs where there are more robots than people?

Hill: I am excited by what I see in this area, but I still think it is going to be some time before we can turn the lights off in the warehouse. That's for a variety of reasons, not the least of which is cost.

I think it will come, but come slowly. But there are some vendors that are pouring a ton of money into technologies that will enable these highly automated facilities. The other thing is that frankly unless we start working harder on workforce replenishment strategies for distribution center work, we might not have much choice except to go to much higher levels of automation.

(Distribution/Materials Handling Story Continues Below )

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Still, "lights out" distribution probably won't happen in my lifetime, on any sort of broad scale, but directionally we are headed in that direction.

Gilmore: One point I have been making is that, especially in the automated case picking area, there may be ROI factors, or cultural issues or other issues that will be barriers to adoption of high levels of automation, but it won't be because the technology won't work for you, as might have been the situation in the past. The technology hurdles have largely gone away.

Hill: And I also don't think we will hear many stories of the automation disasters we sometimes heard of in the past. I was actually there for some of them. I saw a crane go through the back of a DC in the middle of a snowstorm two days before Christmas during acceptance testing. It didn't kill anyone, thank goodness, but it was really something.

I was also there when a leading beer manufacturer decided to pick the brains of leading makers of palletizers and then build their own rather than buy commercial equipment. When they turned it on, the pressure was too high, and caused the beer cans to start to explode. I didn't get hit with any metal shards but I did get covered in beer.

I was around for a few others, but those were the worst.

Gilmore: One issue with heavy automation is that it can be inflexible. How do you come down on the automation versus flexibility discussion?

Hill: I think the drive to use automation to handle the omnichannel fulfillment challenge will reduce those concerns to an extent, as the needs may stay more constant. If the DC layout is good, the basic equipment is solid and the workforce is well trained, to me the question becomes can you get the job done at the cost you want without high levels of automation.

If not, then you've got to look at a lot of options and work really hard at the ROI.

Gilmore: Even then, you have to be thinking about designing in flexibility from the get-go. It may cost you a bit more upfront - and maybe that screws up the ROI - but you'll be very happy you did so down the road.

John, as we wind down here, over your long and distinguished career, you met and worked with thousands of supply chain and logistics professionals. I know it will be hard to do this, but are there a few that made special impressions on you?

Hill: I had jotted down some names when thinking about this, and my list filled a full page. But I will just pick out a few to cite here.

There was a fellow by the name of Denny Maher at 3M who was my boss in Europe - he ran the Europe business unit. When I told him I was leaving the company, I did it with much trepidation about his likely reaction. I told him I was going to go back to the states to form a new bar code business.

He looked at me and said, "You have to promise me one thing. If you make it, two weeks before you go public, give me a call. If you don't make it, give me a call too, because there is always a spot for you here."
That approach is something I have used many times when people have left organizations I was running.

Another guy was Dave Collins, the founder of Computer Identics, a company that pioneered bar code scanning in manufacturing and distribution. Another was Wes Shea, the founder of MHI, who counselled me continuously and was a true mentor. Finally, my long time business partner at Cypress Dave Scott, a Renaissance man and consummate technologist, who I miss dearly still today.

Gilmore: Anything else you want to discuss?

Hill: I have one more thing. In the late 1980s a few us, including Dave Scott, worked on the use of object-oriented programming to develop a WMS to beat all WMS's. Think of a program to which a user could input data on current and projected warehouse activity and product mix and volumes, equipment and human resources, and out of the program would pop out alternatives for changing the physical layout of the DC and how to deploy staff to optimize performance.

Then the program would automatically generate and configure a WMS to execute that plans and manage performance.

We got pretty far with that concept - but then we ran out of money. But someday, I think someone is going to do it, bring such a WMS to the market. Users will by it, generate their own software just for their needs, and improve their operations. And down the road, when profiles and business conditions change, they will be able to go into an offline version of the program, enter the new data, play around with what if scenarios, and regenerate the software.

Although it may not even be called a WMS, I will be happy when that vision becomes a reality. I am not sure where the source code is for that development - I think it may be is a safety deposit box in Jackson Hole or something - and David's gone now so it won't be him that moves it forward, but I hope someday someone does.

Gilmore: And last, the most important question of all: Are you ever going to retire?

Hill: My golf game is no longer good enough to do that - and I'm still having too much fun in "our world" to leave it!

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