sc digest
April 8, 2016 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Trip Report - MODEX 2016 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet Expert Insight and Gilmore's Supply Chain Jab bullet On Demand Videocasts


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first thought


Supply Chain Graphic of the Week
Another View of the Internet of Things and the Supply Chain

Alibaba Now Number 1?
Showdown at the Steel Industry Corral in the UK
Amazon Once Again Expands Same Day Delivery Coverage
Ford Moving Many Cars to New Mexican Factory



Automated Restock Alerts Keep Lines Up and Running


Week of March 22, 2016 Contest

See The Full-Sized Cartoon and Send In Your Entry Today!

Holste's Blog: Boost Existing System Performance By 10 to 20%


Weekly On-Target Newsletter:
April 7, 2016 Edition

New Cartoon, Walmart Labeling, Truck Driver Image, Apple Report and more


The Compliance Networks Corner: Five Critical Supply Chain Steps to Ensure Merchandise Plan Execution

by Richard Wilhjelm,
Compliance Networks


Will Amazon Really Build Parcel Shipping Network?

by SCDigest Editor Dan Gilmore


What do RPS, Viking Freight, American Freightways and Watson Motor Lines have in common?

Answer Found at the
Bottom of the Page

Trip Report - MODEX 2016

Ok, SCDigest Materials Handling Editor Cliff Holste, Video News Anchor Jim Stephens and myself are fresh back from the MODEX 2016 trade show at the Atlanta convention center.

Thousands of you have already seen are day 1 and day 2 review and comment videos, but if you missed those, here they are again: MODEX 2016 Day 1Day 2.

As many of you know, MODEX is an event from MHI, formerly the Materials Handling Industry of America, and is the off-year show from the now not much larger ProMat show held in Chicago in odd number years.

The official number of attendees over the four days isn't out yet, but MHI estimates that figure will be about 25,000, which would it just about 5,000 or so short of the ProMat number in recent years. The MODEX floor show space continues to expand, as more exhibitors jump on board. 


I have been saying for several years now that we would soon see voice control of WMS and other supply chain applications.


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So with the materials handling sector in general enjoying pretty good times, and both the MODEX and ProMat shows doing very well, this has left MHI in relatively flush financial shape, which under CEO George Prest is aggressively moving to expand its focus from representing companies in the materials handling sector (hardware, software and more) to supply chain practitioners as well. It won't be an easy or inexpensive process, but MHI is in a position to make a run at it.

Cliff and I try to find some key themes from these MHI shows each year, and didn't really manage to do that this year in any significant way, other than to repeat something we noted last year after ProMat: the technical barriers to the holy grails of automating full case and piece picking in distribution centers are simply falling away.

If you decide not to automate such picking processes, it may be due to volume levels, the ROI, your culture, concerns about flexibility, etc., but it is unlikely to be because the technology just won't work for your situation, as was the commonly case just a few years ago.

Case in point of this perspective is a really cool new piece picking system from I am Robotics, which I will overview below.

In another minor theme, there were a significant number of what are called automated guided vehicles (AGVs) on the show floor. What is noteworthy here is that many are now using the same type of autonomous driving capabilities being developed by Google and many others for automobile navigation.

Interestingly, this not only greatly improves flexibility - an important limitation of AGVs in the not too distant past - but can actually also significantly reduce the cost of the vehicles by in a sense digitizing some of the hardware that was needed for AGVs to navigate in the past.

The big question though is whether AGVs will ever really find a place in distribution centers, instead of just the factory floor (and sometimes also then connected plant warehouses). That remains to be seen, although the Kiva-style robots (now being rethought by Locus Robotics, see below) are really a form of AGV.

OK, some other industry scuttlebutt from the show:

One source tells us a major deal is set to go down in the materials handling sector, but it just couldn't get done in time for the show. We couldn't get any more details out of him, so we will just have to wait and see on that one.

One consultant discussed with us the emerging use of telemetry to track pallets in a DC without the need for bar code scanning. What is interesting about this is that what is actually being tracked is not the pallet itself, but rather the vehicle moving it. In great summary, as a pallet comes off the line, it is given a virtual serial number, known by the system in sequence. 

When a fork truck or AGV picks up a pallet, the system tracks that vehicle moving the virtually ID'ed pallet to where it is deposited. So when another vehicle later moves to those coordinates, the WMS now knows which pallet is located there, and again tracks the movement of the vehicle (not the pallet directly) to another location, such as staging. No scanning, yet tracking. This is still somewhat experimental. More info when we get it.

Next, I have been saying for several years now that we would soon see voice control of WMS and other supply chain applications. Not voice just used for say order picking, but rather as a key or even primary interface to the system.

Supply chain software vendor Softeon was demonstrating just such capabilities in its booth, where you could say "Show wave completion" into a smart phone or PC, and a chart showing the current status of the pick wave would show up on the phone or screen. An operator might say "Need replenishment" or something similar, using either a set phrase or, as Softeon was showing, using "natural language" capabilities as well. I believe this will be commonplace in a few years.

On just a brief humorous note, as we noted in our Day 2 video, if you saw us in operation at these shows you might get a chuckle. We first do a quick assessment if a given vendor has something new and of possible interest, based on a quick visual inspection of the booth. If yes, we discuss what they are showing in more detail. If it passes that cut, we then want a 35-45 second video overview of the solution from a company spokesperson for use in our video recaps each day.

Almost every time, the vendor says something like "When do you want to do this?" And Cliff and I say "Right now!" The vendor is then like "Right now?" And we repeat "Right now." If they balk at first, as many do, we say (truthfully) we are unlikely to make it back to this booth. Somehow we get away with this, for our audience's benefit.

OK, short on space, but the best three new solutions we saw this year at MODEX were:

The aforementioned piece picking robot from I am Robotics: It moves up and down aisles of static shelving, picking products into a tote/carton using a simple vacuum type grabber. Started by a young CEO coming out of the robotics center at Carnegie-Mellon in Pittsburgh, the secret sauce is vision technology that allows the robot to "see" the items on the shelves, validate they are the right items, and make the right approach with the vacuum arm for each pick. These robots can now do 300 picks per hour, more in the future, and are targeted at ecommerce orders. They can be leased for I believe they said just $2000 per month. Company has one live deployment at some type of drug company DC.

Locus Robotics was formed when 3PL Quiet Logistics was concerned with the Amazon acquisition of Kiva Systems, since Quiet used Kiva extensively. That concern was well placed, as Kiva soon stopped selling outside Amazon. The Locus robots are cousins to the Kiva approach, but importantly different, not pursing "goods to person" picking, but rather "task to person." The picker in effect meets the robot at a pick location, sees the pick on an iPad screen, and after the pick the robot either goes to packing or the next pick for the order. 7-8 robots are needed to support each picker, but CEO Bruce Welty says the productivity and ROI are there. Huge traffic at the booth.

Very cool was a new data collection terminal using smart phones from COGNEX, prior to this primarily a provider of vision systems for bar code scanning on high speed conveyor lines. COGNEX has wittily built a platform into which a smart phone - either selected/acquired by the vendor or the end use company itself - is embedded, thus taking on a traditional brick or gun form factor but also accessing COGNEX's vision-based scanning module versus say a laser. This is a very well-engineered solution, beyond merely a hardened case for a smart phone, and the phones are easily replaced in the platform with newer models over time. This I believe is just where we are headed.

All three of these solutions can be viewed in more detail in the Day 2 video. I am out of space, but we saw a lot more at the show. In next week's edition of our On-Target newsletter, we will recap the other 15 or so "best of MODEX 2016" solutions that we saw at the show.

Any reaction to our MODEX 2106 trip report? Are the videos useful? Were you at the show? What caught your eye? Let us know your thoughts at the Feedback section below.

View Web/Printable Version of this Column

On Demand Videocast:

Now is Finally the Time for WMS in the Cloud

As Supply Chain Software Moves to the Cloud, Barriers to Warehouse Management Joining the Party have All Fallen Away

What has changed, and what WMS technology developments are fueling this transition. We'll cover all that and more in this detailed, fast-paced broadcast.

Featuring SCDigest editor Dan Gilmore and Dinesh Dongre, VP Product Strategy, Softeon

Available On Demand

On Demand Videocast:

Trends and Issues Global Sourcing and Trade Management

Results from SCDigest's New Benchmark Study on Practices and Technology in Global Trade

You'll learn the results of the survey, unveiled in a new report launched with this Videocast. Not to be missed by anyone interested in global sourcing, global trade management and supply chain visibility.

Featuring SCDigest editor Dan Gilmore, Gary Barraco, Senior Director of Supply Chain Solutions at Amber Road, and Dan Gardner, President of Trade Facilitators Inc.

Available On Demand

On-Demand Videocast:

Using Supply Chain Modeling to Improve Operations and Outperform the Competition

PriceSmart Builds Optimized, Aligned and Dynamic Supply Chain Network

You'll learn about key new trends in supply chain design, where companies are finding the value, and learn the powerful story of how leading retailer PriceSmart has used network design tools to craft its network of the future to support growth, optimize flow paths, and right size inventory levels.

Featuring Frank Diaz, senior vice president, distribution and logistics at PriceSmart, and Toby Brzoznowski executive vice president at LLamasoft and SCDigest's Dan Gilmore

Available On Demand


We received several excellent letters on our article on Target's decision to rewrite much of its  supply chain software, and do it in house rather than outsource and use packages. All the result of the impact of Omnichannel, which, CEO Mike McNamara said, is killing the traditional DRP/DC supply chain model in retail.

See a selection of this Feedback below.

Feedback on Target's Change in Software Direction:


In an omni-channel retail world the entire supply chain needs to be in the system because vendors can ship to the stores, DCs, depots, fulfillment centers, and so on.

So, a DC-level DRP system will not do the job.

I suspect we agree on that.

If so, then the logical solution would be a store-level DRP system which also includes the DCs, depots, fulfillment centers and so on. This way, everything is in the system and a model of the business exists from the final point of sale all the way back to the vendors, and possibly further back to raw material suppliers if the vendors have DRP/MRP systems. Forecasts, planned shipments, financial plans, transportation plans, and capacity plans exist for this fully integrated supply chain, everyone has up-to-date, clear and undistorted visibility, and everyone is working to a common set of plans.

Do we agree on this?

If so, then the next question is does it make sense for Target to create their own store-level system?

The success of these systems is mostly a function of the people side of the business - changing the process and behaviors and we have lots to share in this regard. But you also need to have software which can do the job.

There is nothing preventing a company like Target from changing their processes, and the process changes are tested and proven.

So, could a retailer as large as Target create store-level DRP software? If so, what would it cost? Would it be less than what many retailers are spending to implement a package?

Mike Doherty
Vice President
Demand Clarity


Yes, the DC/DRP model is dead.

The store-level DRP model where the extended supply chain including stores, DCs. vendors, and other locations is very much alive and is both tested and proven in retail.

All trading partners are linked together with clear visibility upstream and downstream. Changes are communicated daily or more frequently. The planning horizon extends a year into the future.

Darryl Landvater
Product Director


No question here: If an application is central to the business mission of a company, that company must own it own code. 

Did Amazon buy packaged applications?  I think NOT.


Steve Kohler



Q: What do RPS, Viking Freight, American Freightways and Watson Motor Lines have in common?

A: They were all acquired by FedEx, from 1998 through 2006, as it built its ground parcel and LTL business now known as FedEx Ground and FedEx Freight, respectively.

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