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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.

August 17, 2016

Logistics News : Is Your DC Order Fulfillment System Out-of-Date?

Paying Attention to Technology Upgrades is Critical!


Conveyors, sorters, and control systems require hardware and software upgrades – probably more often than most DC business managers would think. For example: picking and sorting system installed within the last 5 years or more, are probably operating with outdated controls and software programs. This includes 3rd party vendor provided control devices as well as software programs provided by the original equipment manufacturer.

Eventually, providers stop supporting outdated technology. Some will provide incentives that encourage shippers to up-to-date their technology. Still, in some cases the desire to hang-on to outdated technology is strong leading to operational obsolescence which can cripple an operation.

Holste Says...

The best way to deal with the question of when to upgrade and/or incorporate new features and functions is to develop a plan.

What do you say?

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I recall one such case involving a large privately owned auto parts distributor. The company hired a System Integrator (SI) to design, engineer, install, and commission a batch order picking and sorting system in 2001. Over the years the SI “suggested” replacing and updating various aging control devices with new components. The company never could justify the “out-of-pocket” cost. After all, the original technology was working just fine and the software was stable and dependable.

As time went on the SI informed the company that many of the critical control devices were no longer available and not being supported by the OEM. In addition, time was running out on the SIs ability to support the now extinct proprietary software programs running their system. Still, the company was not concerned enough to take action.

Eventually, the company hired an IT person who panicked when it was discovered that the DC system controls and software programs were obsolete and no longer supported. In fact, much of the existing control equipment, including PCs, PLCs, and bar code scanners were no longer being serviced by the OEMs and critical parts were not available rending the devices non-repairable.

The IT person understood that the entire DC system had declined into a state of operational obsolescence. At this point even a relatively minor system failure could have a catastrophic effect on the DCs ability to process and ship orders to its customers.

Unfortunately, while sever, this situation is not all that uncommon. Part of the blame lies with system providers who do not want to upset their customers with doomsday scenarios. Part of the blame lies with company executives who see DC technology upgrades as an out-of-pocket expense instead of an incremental on-going business investment.

The best way to deal with the question of when to upgrade and/or incorporate new features and functions is to develop a plan. Then schedule regular intervals for reviewing your material handling equipment, controls and software systems, and upgrade them as recommenced. Not only will this approach protect your business by keeping critical technology up-to-date, it is way more cost effective to upgrade incrementally.

Final Thoughts

Business managers should be cautious against the onslaught of new features that fall into the “nice-to-have” category. Still, it’s important to understand that protecting against operational obsolescence is good business. This is the reason why industry experts advise companies to have an independent system audit/evaluation done every 3 to 5 years.

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