St. Onge Company Links Supply Chain Blog
Strengthening your supply chain one link at a time.
 

Don’t Move! Just Wait Right There…

…and I’ll bring it to you.   Just what we all like to hear.   We are about to be served, waited upon and have our lives made just a little bit easier.  Few would turn down such service all other things being equal, including cost.  The allure of bringing us what we want is the attraction of automated retrieval systems in a distribution center picking environment.   The dramatic rise of e-commerce has created both a marketplace demand for devices and systems to bring the “parts to the picker” and eliminate all the travel usually associated with assembling an order.  That newly minted material handling equipment (and some recycled equipment types reapplied with gusto to the new material handling demand) does indeed eliminate the travel associated with assembling an order, through the use of robots, shuttles and cranes of all makes bring items to the picker, maximizing the time spent picking.  Some of these applications may provide more than a distribution center bargains for in the quest to increase picking productivity.  A few strategic considerations regarding automation applications in this arena can avoid a tactical failure.

First, as with any new technology, avoid the bleeding edge, and if your tolerance for risk is low, steer clear of the cutting edge.   Bleeding edge refers to technology, hardware or systems so new that it has not been applied in a commercial or industrial environment yet.  Simply put, unproven.  Let someone else work the bugs out and do not risk you customer’s satisfaction unnecessarily, the risk of being that stalking horse outweighs the potential benefit in productivity, throughput or even order cycle time benefits.   Even cutting edge technology with applications some measure of installed base bears close scrutiny before investing in it.  If that technology is so proprietary that is it only supported by a single supplier, are you comfortable with that risk?   If that organization fails, or is purchased and removed from the marketplace (as was the case with the Kiva robotic automatic storage and retrieval pick system) can your business withstand losing all support and future expansion potential of the material handling equipment you are considering implementing?   Most would not.

However, there are ample providers who are in the business of providing material handling equipment for the long haul and support a well established customer base.  All will be able to design a system that will satisfy your order throughput demands, and reduce the pick labor required to assemble your orders, but the magnitude and impact of such an investment and implementation demand a focus to ensure two key qualities are present in any system you consider implementing—flexibility and fiscal return.

Automated systems can be very inflexible.  Ensure that changes in your volume, order complexion, or even the items you offer to your customers can be accommodated by system you are considering with either no changes or justifiable upgrades or modifications that can be implemented within your facility, with no interruption to your order processing and that any additional investment is fiscally responsible.

Which bring us to the second quality to consider—fiscal return.  The labor displaced by the implemented system must be significant enough to return your investment in the time frame required by your business.  In calculating that time, ensure you are considering all the costs of automation.  There will be increases in the power required to run an automated system.  The maintenance of such a system is orders of magnitude higher then maintaining forklifts, pallet jacks and carts.   Spare components to ensure maximum uptime may need to purchased if your operation or the equipment design cannot endure the loss of a key component and the associated downtime.  All these fiscal considerations need to be added to the return on investment calculations.

Done well, automatically bringing parts to your pickers can mean a huge competitive advantage and bottom line impact.  Failing to properly consider such an application, can leave your pick staff standing, waiting, empty-handed, to fulfill your customer’s orders, which might mean they won’t be your customers for long.
 
—Bryan Jensen, St. Onge Company
 
 

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