DC Velocity - March 2017

newsworthy

THE LATEST INDICATION THAT THE MATERIAL handling industry is being radically reshaped by the explosion in e-commerce and omnichannel fulfillment activity came Feb. 2 when Toyota Industries Corp. (TICO) announced the launch of Toyota Advanced Logistics Solutions (TALS). The new division, which is separate from Toyota’s existing forklift business, will sell integrated automation and productivity solutions to material handling and logistics markets in North America.

To provide the foundation for that business, TICO acquired Indianapolis-based systems integrator Bastian Solutions LLC, which specializes in material handling automation, robotics, warehouse execution and management software, and industrial controls. The company will retain its name and will continue to be led by CEO Bill Bastian II and President Aaron Jones.

Michael B. Romano has been named president and CEO of TALS. Romano will resign from his position as president and CEO of Chicago-based Associated Integrated Supply Chain Solutions. Associated, a lift truck dealer for The Raymond Corp. of Greene, N.Y., also provides other types of warehouse equipment as well as facility and dis-tribution-network design, labor-management engineering, systems integration, and aftermarket services. Romano will sell his majority ownership in Associated to Raymond, which is a minority stakeholder.

Toyota’s decision to create TALS was inspired in part by Associated’s 2013 acquisition of systems integrator Peach State Integrated Technologies, Romano said in an interview. Because Raymond is owned by Toyota, Associated has a longstanding relationship with the Japanese industrial giant.

“Toyota became interested in the drivers for that acqui-
sition—the current and expected growth of e-commerce
combined with labor shortfalls,” Romano said. “The dis-
tribution model needs to change to accommodate e-com-
merce, which is labor-intensive because you’re handling
eaches. But the labor force is not available for that, so many
companies are looking to automate.”
TICO’s strategy is similar to that of rival lift truck vendor
Kion Group AG of Heusenstamm, Germany, which paid

$2.1 billion in 2016 to buy Atlanta-based systems integrator Dematic Corp. At the time, Kion said it planned to become a “one-stop supplier for intelligent supply chain and automation solutions.” In December, Kion said it would create a Supply Chain Solutions business unit comprising Dematic; Belgium’s Egemin Automation, a provider of automated guided vehicles that it acquired in 2015; and Retrotech, a U.S.-based systems integrator, which Kion acquired in 2016.

In 2016, Honeywell International Inc. acquired Intelligrated, considered to be Dematic’s primary competitor, for similar reasons. Mason, Ohio-based Intelligrated’s warehouse execution system (WES) software and order fulfillment technologies will complement Honeywell’s mobile computers, auto identification, and voice automation product lines, Morris Plains, N.J.-based Honeywell said at the time.

MORE CONSOLIDATION AHEAD?

Romano said more acquisitions will follow Bastian’s, and that TALS “will not necessarily” compete with Associated and Peach State. One of his responsibilities, he added, is to “assess, organize, and then to align all current competencies in this space within the Toyota enterprise. We will take people who are doing [the kind of services TALS will provide] today and try to assimilate those competencies under the TALS umbrella,” he said.

Given Toyota’s objective of being the number one player in every space it competes in, Romano added, he expects TALS will have the resources needed to become the global leader in comprehensive material handling solutions.

In a separate interview, Brett Wood, president and CEO of forklift company Toyota Material Handling North America (TMHNA), said he expects to see more consolidation in the North American material handling segment. In addition to domestic match-ups, the rapid growth in demand for e-commerce fulfillment and integrated material handling solutions could also attract big players from Europe, China, and Japan, who may seek to get into those markets by acquiring or partnering with systems integrators, he said.