As DC managers nationwide prepare to replace aging material
handling systems, they should consider upgrading the equipment instead of simply duplicating the old gear, according to a
supply chain management consultancy.
“Do not replace to replace. Replace to evolve. Be smart
about it,” said Dale Pickett, director of supply chain services
at Tompkins International, a consulting firm in Raleigh, N.C.
“Every company needs to consider the right mix of equipment
for what its mission is today.”
The problem is expected to escalate in coming years as the
material handling infrastructure, both technological and phys-
ical, requires increasing maintenance and repair, according to a recent survey of
retailers, manufacturers, wholesalers, and third-party logistics firms conducted by
Tompkins Supply Chain Consortium, a unit of Tompkins International.
Survey results showed that the average age of a material handling system is 15. 3
years and that 35 percent of all companies surveyed have at least one material
handling system that’s 20 years old or more.
The most common byproducts are loss of employee productivity and considerable system downtime, each of which was cited by nearly one in five respondents.
Other common headaches include excessive maintenance costs, lost throughput
capacity, and diminished customer service issues, the survey revealed.
“These systems last flawlessly for 10 to 12 years. If you do an ROI calculation,
you can be confident they will last with only minor hiccups,” Pickett said. “But
after 15 years, most components will have reached the end of their useful life, and
you can expect failure within hours, days, or weeks.”
Without time to prepare for rerouting the flow of goods, that type of failure
could lead to far worse problems than just a slump in productivity in the latest
warehouse shift. The event could have long-lasting consequences such as a loss of
sales, declining shareholder value, and customer confidence, he warned.
THE E-COMMERCE EFFECT
These potential impacts make a compelling argument for facility owners to
replace the old gear, but the most important part of the process is picking the
ideal replacement.
Instead of simply replacing conveyor beds with conveyor beds, smart warehouse
managers should examine both how their own business may have changed and
how competitors have evolved, especially in an age where Amazon.com has come
to dominate online retailing, Pickett said.
“Maybe your equipment was top of the line back then, but is that still applicable
to what you’re doing today?” he said. “If it was 10 or 12 years ago, that was before
Amazon. Think about the impact of where e-commerce fulfillment has taken us in
that time. Most companies have struggled and Band-Aided to make adjustments.”
Many warehouses have been swept along by the trend that has DCs and fulfillment centers doing more e-commerce processing than store fulfillment, a profound change that may have altered the very types of products now flowing along
material handling routes, chutes, and conveyors.
—Ben Ames
16 DC VELOCITY APRIL 2015 www.dcvelocity.com
go figure …
3rd
The Port of Long Beach’s new (and lower) ranking among the nation’s busiest containerports,
after being second for 11 years. A dramatic
drop in containerized imports over the past few
months, combined with a sizable year-over-year
increase at the Port Authority of New York and
New Jersey, vaulted the East Coast port into
the number two spot. The Port of Los Angeles
remains number one.
SOURCE: ZEPOL CORP.
Warehouse executives need to
upgrade, not just replace, aging
gear, Tompkins report says
In our January 2015 article
about hydrogen fuel cells for
lift trucks (“Almost ready for
takeoff?” page 55), we stated that a study conducted by
the Department of Energy’s
Argonne National Laboratory
found that, when the emissions produced during the
end-to-end cycle of hydrogen
production, storage, delivery,
fueling, and vehicle operation are factored in, a hydro-gen-powered lift truck may
account for more greenhouse
gas emissions than a bat-tery-powered truck. That finding was the result of a 2014
analysis conducted by EnerSys
using the Argonne National
Laboratory’s publicly available
GREET fleet carbon and petroleum footprint calculator.
Also, in an item about North
America’s largest freezer warehouse (“How cool is that?”
March 2015, page 3), we incorrectly identified the provider
and name of a shuttle system
that was part of an automated storage and retrieval system. The shuttle was provided
by Automha and should have
been referred to generically as
a “pallet transfer car.”
Oversight
