This week in SCDigest:
ProMat 2011 Full Review and Comment: the Euro Invasion
Supply Chain Graphic of the Week and Supply Chain by the Numbers
Cartoon Caption Contest Continues This Week!
SC Digest On-Target e-Magazine
New! Expert Contributor: The Velocity-Centric Warehouse
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  Newsletter Archives                  Can't View In E-mail? March 24, 2011 - Supply Chain Newsletter

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Videocast: Optimization 3.0: IBM's Guide to Leveraging the New Wave of Business Analytics for Next Generation Optimization-Based Decision Support

How To Create The Truly Adaptive Supply Chain

Featuring Thomas Dong, Senior Product Marketing Manager, IBM Software Solutions

Tuesday, March 29, 2011



Videocast Series: Operations Rules - Delivering Customer Value Through Flexible Operations

Part 3: Mitigating Supply Chain Risk from the Known-Unknown to the Unknown-Unknown

Featuring David Simchi-Levi, Professor of Engineering Systems at MIT

Wednesday, April 20, 2011



Special Videocast:
The Dell Supply Chain Transformation

How Dell Has Re-Optimized Its Supply Chain To Address Market Challenges And Drive Success

Featuring Annette Clayton, VP Global Supply Chain & Operations at Dell, and Professor David Simchi-Levi of Massachusetts Institute of Technology

This Week's Supply Chain News Bites
- Only from SCDigest

Supply Chain Graphic of the Week: The Results of Dell's Supply Chain Transformation

This Week's Supply Chain by the Numbers for March 24, 2011:

  • Developing Economies See Share of Global Manufacturing Rise
  • SuperValue Bags Big Savings
  • Shippers See Looming Capacity Crunch
  • Fuel Cell Technology in Forktrucks Starting to Emerge

Supplier Collaboration in a Lifesaving Global Supply Chain

Learn How Stryker Osteosynthesis Achieved Alignment of Supply to Demand and Built a World-Class Inbound Supply Chain



March 14 , 2011 Contest

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Weekly On-Target Newsletter
March 24, 2010 Edition

State of the Freight, US Manufacturing Crossroads, Procurement Cost Focus and more


By Scott J. Yetter

Voxware, Inc.

The Velocity-Centric Warehouse


Holste's Blog: Operational Flexibility & System Intelligence - Key Drivers for Automation
Top Story: ProMat 2011 Day 2 Video Review and Comment
Top Story:ProMat 2011 Day 1 Video Review and Comment

ProMat 2011 Full Review and Comment: the Euro Invasion

Materials Handling Editor Cliff Holste and I are back from our two days in Chicago at the ProMat 2011 materials handling and logistics show, a bi-annual event put on by the Material Handling Industry of America (MHIA), a trade association that supports materials handling providers and related software solutions.

It was an interesting couple of days. Many thousands of you have viewed our Day 1 and Day 2 video summaries, featuring a number of new solutions Cliff and I discovered on the show floor.  Thanks to many for the kind notes you sent in about those videos, the best perhaps from Thom Williams of  Amherst Alpha Advisors who wrote: "I (and, I’m sure, many, many others) salute you for your marvelous, insightful video coverage and commentaries flowing out from ProMat 2011.It’s just like watching the Super Bowl while sitting in a very comfortable front-row chair before of a 200” plasma flat screen HDTV, in a great sports bar, while being served great cocktails and munchies."


"ACP is very real, with a large number of proof points, mostly in Europe but a growing number in the US."


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We'll gladly accept those compliments. Those videos are difficult to pull that off, actually.

On to the show itself.

Clearly, this was the most attendance and "energy" on the show floor in several years, generated no doubt from both a modestly recovering economy and some pent up demand after 2-3 years of very constrained corporate budgets and interest.

That doesn't mean a lot of companies have their check books out quite yet though. Our method is to ask questions to many people and sort of triangulate on the truth, and our sense from that effort is that a lot of companies have popped their heads out and started "kicking tires" on possible projects without necessarily having firm plans - but that's a lot better than the last two years.

Those projects include a growing number of plans for new DCs, a category that almost disappeared off the face of North America since 2008. I believe most are projects that were on the drawing board before the recession and are now being dusted off, rather than the result of a surge in demand that is requiring new distribution capacity.

One subset of the market that is moving forward are a number of major retailers which, after a bit of a slowdown in rollouts of new DCs during the Great Recession, are cranking it back up again, good news for those supplying them equipment and software. Home Depot is an obvious example, but there are others.

There were several key themes among the exhibitors and products this year, the primary one that Cliff and I called in Monday's video the "European Invasion." This in fact is a trend that has been building for some time, but it was simply in your face this year.

What must have been dozens of European-headquartered providers were there in force - and most of them with very interesting technology and proven successes in some very advanced distribution center automation. Many of them had small and uninteresting if not unclear booths, but at a surprising number we visited, the story was interesting and strong.

A company like Germany's Dematic has been here long enough that it doesn't really seem European, and last year it bought one of the last major US providers in HK Systems. I am talking about a whole new wave, coming from a market that frankly has been a lot more advanced than the US in terms of distribution automation. So, these companies have both the technology and the experience/proof points.

I am not talking about your basic batch order picking and downstream sortation system here (hardly seen at the show). I mean very advanced levels of automation, including some "lights out" type DCs, many AGV systems - and automated case picking (ACP).

As many of you may know, ACP is a topic we have covered heavily in SCDigest and our Distribution Digest arm, and we have our 2011 ACP report coming soon - with some additional insight coming out of this show included.

Let me be clear here: (1) ACP is very real, with a large number of proof points, mostly in Europe but a growing number in the US (we saw video of an impressive ACP system at a mid-sized food distributor in Tennessee we had never even heard of); (2) there are now a dizzying array of approaches and vendors to choose from - Cliff and I are struggling to keep it straight, and we do this for a living; (3) this will dramatically change the face of distribution for many companies.

The line between automated "case picking" and "palletization" is sometimes a blurry one, but just to show how far this case handling has come, a company called ARPAC Group now offers an "pre-engineered, integrated automated pallet building system as a catalog item. For $158,000, you get a robot, end of arm tooling, a pallet dispenser, stretch wrap machine and more, delivered in two weeks. Technicians just have to come out for a couple of hours to teach the machine some "touch points." This is how far robotics have come.

All that said, below are just a few of our favorite new or nearly new products we saw in two days at the show. These are all featured in the videos, and will be described in more detail along with others we liked  in next week's On-Target newsletter:

TGW Systems (formerly TGW-Ermanco):  Featured a new very high speed "mini-load" AS/RS system called Mustang Evo. The crane speed was impressive (6 meters/sec), but more so the "Twister V" handling system on the cranes, designed to carry totes or cartons (more ACP) with what seems to be big advances  in flexibility in carton sizes and the number of cartons handled per move.


Smart Karton's All Paper Pack: Very innovative new packaging system, in which a self-adhesive inner Kraft paper liner can be crumpled up on itself and hold the product securely in the carton, eliminating the need for filler materials. A potential cost savings for shippers, and a much better experience for customers. Very cool.


Kollmorgen Turns Fork Trucks into AGVs: The new "Pick-n-Go" system from this Virginia-based vendor is intriguing, if expensive for now. It is an add-on to a fork truck from almost any manufacturer that can turn it into an operator/WMS-controlled AGV, similar in one sense to an offering from Crown announced earlier this year. But this one is designed to integrate with a WMS and/or voice system, sending the truck automatically to the next location (so the order picker doesn't have to get on the truck) or say to staging after the pallet pick is complete. Costs will be lower when this system comes integrated from the lift truck manufacturer's factory, as it is now often available in Europe.


Demo 3D's Simulation/Emulation Software:  This company offers a very cool set of tools to simulate materials handling systems and allow companies (usually system providers) to emulate the performance of actual control systems in a virtual automation environment. The system looks great, and we were surprised to learn that companies like Demo 3D are leveraging advances in computer gaming technology to dramatically improve the look and power of these systems and substantially reducing time and cost to simulate/emulate.


Raymond's Fuel Cell Powered Fork Trucks: Raymond is by no means the only company to introduce fuel cell trucks, so this is more as indicative of a trend, but Raymond's expert was very knowledgeable on the subject. The benefits of fuel cells: get rid of battery costs and handling headaches, see big environmental gains. The challenge: fuels cells cost something like $32,000 right now, a multiple of the cost of the truck itself. There are federal and some state tax credits, however, and this is just the way it will go before long as costs decline. Some multi-shift operations are finding ROI right now.


Holste's quick observations on the show largely parallel mine.

"The presence of European and Asian companies that are being attracted to the U.S. market continues to increase. Most of these companies are very well established and have mature alternative automation solutions to offer," he said. "Many of them now have operations in the U.S. and explains the reason why there was so many AGVs and robotic picking and palletizing solutions on display."


That's it - we are out of room. Had a number of conversations with people who recognized me at the show. Sorry if I missed you in Chicago.


Did you attend ProMat this week? What solutions caught your eye?  What were your thoughts on the show itself and what vendors offered? Do you see a "European invasion" as well? Let us know your thoughts at the Feedback button below.


Dan Gilmore


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Q: How long does it take to refill a fuel cell in a fork truck with more hydrogen when it is depleted?
A: Found at the Bottom of the Page


We got quite a bit of feedback on our article and video on the new bar code "scan tunnel" that Kroger unveiled at this year's National Retail Federation show (NRF) in New York City. The tunnel has a chance to revolutiomize the grocery store checkout process.

That includes our Feedback of the Week from Mike Bittner, former AMR Research analyst and now independent consultan, who isn't wild about the concept.

That and more below, most courtesy of our friends over at the RetailWire.

Feedback of the Week - on Kroger's Scan Tunnel:


I have become pretty accepting of the self checkout lanes in my store. The whole reason for the "tunnel" format is to make it clear that items have been properly presented to the POS system. If a customer walks past the tunnel with a product in their hand it is pretty obvious and new video technology is becoming able to detect these maneuvers.

It seems the barcode read accuracies I recall reading are approaching the 99% level without additional input. The time consuming part of self checkout is still bagging and tendering. I don`t see anything here that addresses either of those. There is no mention of cost, so I don`t know how it compares to plain scanners.

Sure looks like a solution looking for a problem to me.

Bill Bittner
BWH Consulting

More on the Tunnel:


It looks a little too much like an MRI machine for me. That aside, I think the issue is whether customers would rather zip through an automated checkout, or have a pleasant, efficient checkout with a courteous associate.

In stores that are really mainly competing on price and not service, this system should work IF it gets up to a read rate of 99.9% or so. At a 98.5% read rate, someone with 30 items in their basket is going to have an issue more often than every third trip.

Would you rather use this thing or check out in a Publix, where there are typically no lines and no self check outs? Oh, and the associates are friendly and fast.

Al McClain
CEO, Founder

Just what we need - another device that scans our bodies while it scans our groceries.

I`m so old-fashioned, I would cheer for a system that allowed the checkout clerks to put product on a belt, self-scanned it inside a smaller tunnel (for product only), and then had someone bagging it up for me on the way out. Of course I have some friends that wouldn`t even want their food subjected to whatever the tunnel would do, but I`m not that extreme.

Paula Rosenblum
Managing Partner
RSR Research

If this thing works, it`s pretty darn cool!

Jonathan Marek
Senior Vice President

Let`s start by assuming it works--if it doesn`t work nearly perfectly, it will end up being a customer service disaster. The question would be whether the system pays for itself; do the reduced touches save sufficient labor costs to pay for the machines?

The upside is faster checkout. The downside is reduced customer contact.

Stephen Needel
Managing Partner
Advanced Simulations


Q: How long does it take to refill a fuel cell in a fork truck with more hydrogen when it is depleted?
A: Just 2-3 minutes. A Raymond spokesman this week said most companies will probably lease a filling set up inside their DC from one of the industrial gas companies to manage this.
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