Productivity solutions for manufacturing, warehousing and distribution ® JANUARY 2006 INCLUDING WAREHOUSING MANAGEMENT Lori Gonzalezi Supervisor, Regional Master Operations Mercedes-Benz USA MANUFACTURING 3PL feeds the shop floor 32 INFORMATION MANAGEMENT DoD on RFID 28 PRODUCTIVITY SOLUTIONS Palletizers set the pace 31 Fast lane for slow movers page 22 Lori Gonzalez Supervisor, Regional Master Operations Mercedes-Benz USA Productivity solutions for manufacturing, warehousing and distribution MANUFACTURING 3PL feeds the shop floor 32 INFORMATION MANAGEMENT DoD on RFID 28 PRODUCTIVITY SOLUTIONS Palletizers set the pace 31 Fast lane for slow movers page 22
Transcript
Product iv i ty so lut ions for manufactur ing,warehous ing and distr ibut ion
�
JANUARY 2006INCLUDING WAREHOUSING MANAGEMENT
Lori GonzaleziSupervisor, Regional Master OperationsMercedes-Benz USA
MANUFACTURING
3PL feeds the shop floor 32INFORMATION MANAGEMENT
DoD on RFID 28PRODUCTIVITY SOLUTIONS
Palletizers set the pace 31
Fast lane forslow movers
page 22
Lori GonzalezSupervisor, Regional Master OperationsMercedes-Benz USA
Product iv i ty so lut ions for manufactur ing,warehous ing and distr ibut ion
MANUFACTURING
3PL feeds the shop floor 32INFORMATION MANAGEMENT
DoD on RFID 28PRODUCTIVITY SOLUTIONS
Palletizers set the pace 31
Fast lane forslow movers
page 22
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Second-guessing the efficiency of your operation's racking? Is your fleet of forklifts notquite getting the job done? Worker productivity a bit sluggish?
For the second year, the World Food Logistics Organization (WFLO) offers real-world solutions to these issues and others in a concentrated, 24-hour class on materialshandling (www.wflo.org).
The course features several hours of classroom instruction from industryprofessionals and wraps up with a group case study exercise.Topics slated to bediscussed include forklifts, racking, construction, warehouse management systems, andmore. For information or to register, visit www.iarw.org.
New company debutsat NA 2006 Celerity Automation Inc. (www.celerityautomation.com), a new materials handling venture, will presentits take on materials handling in the 21st centurywhen it introduces its linear transfer vehicle (LTV)at the NA 2006 show in Cleveland, Ohio, March 27-30, 2006.
The LTV is just one of hundreds of new productsand solution innovations scheduled to be featured atNA 2006 (www.na2006.org).According to showsponsor, Material Handling Industry of America,more than 400 exhibits will cover 150,000 squarefeet.
The proprietors of Celerity, Richard C.Young andMichael Maynard, have extensive materials handlingbackgrounds.The LTV leverages their expertise withsmooth, virtually friction free electromagneticoperation.The LTV is a high-speed linear transfersystem that uses the latest advances in linear, directdrive servo-motor technology to ensure highlyaccurate vehicle positioning.
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 1
Five tips for selectingthe right conveyorThere are so many factors to consider whenpurchasing a conveyor system.To breakdown the barriers of a successfulimplementation, essential questions needanswering. But, asking the right questions isthe key to getting the most appropriate
answers.Dynamic Conveyor (www.dynamicconveyor.
com), a supplier of conveyor technology, hascompiled a list of five key questions that will help
you determine the right equipment for your operation.Available on Modern's Web site at www.mmh.com/conveyortips, these helpfulhints are a must see if you're shopping for a new system.
The path to higher productivity
BREAKING NEWS YOU SHOULD KNOW
Writing the book on leanorganizationsWhile lean manufacturing is well established, lean warehousing is only inthe early stages of development.Andnow comes a new publication calledLean Enterprise Leader focused on howto create an organization of empow-ered teams all pulling in the same direction.
The book has two goals, according to author StephenHawley Martin.The first is to eliminate the decision-mak-ing bureaucracies that serve as a barrier to lean implemen-tation.The second is to help floor leaders transition from“command and control” managers into coaches who effec-tively instruct their workforce in introducing and fosteringlean productivity.
Intended for supply chain professionals looking to migrateto a lean philosophy, Lean Enterprise Leader can be purchasedon the book's Web site, www.LeanTransformation.com.
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2006Interlock rack systeminstalled.
2007New picking system. Easilyreconfigure racks.
2009Sales soar. Move entire rack system to new building.
2010Seamlessly add on to existing system.
2025Fortune100. Sell rack system at a profit. Purchase newInterlake system.
Productivity Solutions forManufacturing,Warehousing and Distribution
< Mercedes handles slow-moving parts. p. 22
MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 3
VOL. 61, NO. 1
departments &columns1/ Upfront5/ My View47/ Focus On50/ Product Showcase17/ Great Ideas54/ 60 Seconds with Thomas Moore fromNortheastern University
news7/ Following banner year in 2005,
expert expects robust 20068/ Certification program for RFID expands9/ NA 2006 education program set10/ Global supply chain seminar on demand10/ Top supply chains identified13/ The changing culture of lean14/ Keeping the dock safe 15/ People to know
Economic expert Jim Haughey says to expectstrong economic results this year.
CONTENTS 1.06
featuresWAREHOUSE / DISTRIBUTION
22 Fast lane for slow moversMercedes has designed a DC in the U.S. that handles slow-movingparts—handling volume efficiently, allowing other distributionoperations in its network to reduce inventory.
EQUIPMENT / SYSTEMS
19 Towline conveyor increases productivityCase New Holland’s conveyor system pays for itself in less than a year.
20 Warehouse upgrade lifts orderpickingNavarre Corp. scores gains using new linear and spiral conveyors.
21 Loading system improves worker safetyUnilever-Bestfoods now loads more trailers a day in less time.
INFORMATION MANAGEMENT
28 RFID on the front linesRFID technology is beginning to transform the Department ofDefense supply chain from storage depots to the battlefield.
PRODUCTIVITY SOLUTIONS
31 Palletizer keeps butter churningA dairy coop moves from manual to robotic palletizing.
MANUFACTURING
32 Building a new supply chainUsing a 3PL, office furniture makers save $4 for every dollar spent.
INCLUDING WAREHOUSING MANAGEMENT
COVER PHOTO BY: ED WHEELER
Modern Materials Handling® (ISSN 0026-8038, GST Reg#123397457, R.B.I. Int’l Pub. Mail #0280739) is published monthly, except October when published semi-monthly by Reed Business Information,8878 S. Barrons Blvd., Highlands Ranch, CO 80129-2345. Reed Business Information, a division of Reed Elsevier, is located at 360 Park Avenue South, New York, NY 10014.Tad Smith, CEO. Circulationrecords are maintained at Reed Business Information, 8878 S. Barrons Blvd., Highlands Ranch, CO 80129-2345. Phone (303) 470-4445. Periodicals Postage Paid at Littleton, CO 80126 and at additionalmailing offices. POSTMASTER: Send address changes to Modern Materials Handling, P.O. Box 7500, Highlands Ranch, CO 80163-7500. Publications Mail Agreement No. 40685520.Return undeliverable Canadian addresses to: Deutsche Post, 4960-2 Walker Road,Windsor ON N9A 6J3. Email: [email protected]. Please address all subscription mail toModern Materials Handling, 8878 S. Barrons Blvd., Highlands Ranch, CO 80129-2345. Rates for non-qualified subscriptions:US $99.90/yr. Printed in U.S.A. Modern Materials Handling® is a registered trade-mark of Reed Elsevier Properties Inc. used under license.
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OR AS LONG AS I’VE BEEN WITH MODERN,each year was going to be the one when RFID took off. Last yearwas no different.And once again, we’re still waiting.
Or are we? You see, I’m beginning to think that maybe we’vebeen using the wrong measures.
What really matters here? Number of tags? Dollar volumes?Number of end users? Item level tagging rather than pallet or case level? Success stories?Replacement of every bar code on the planet?
Or, is it more important that RFID be part of how people think? Consider this.Four years ago, RFID had no relevancy in distribution although it was already a success in
manufacturing.Today, we are obsessed with RFID in distribution while rarely discussing its fitin manufacturing. Fact is, the technology has already established itself as a point of considera-tion in both arenas.And that’s not only new, but a breakthrough that has already occurred.
Much the same has happened at the Department of Defense. Even though so manypeople thought DoD’s primary RFID initiative was similar to Wal-Mart’s, they werewrong. Until this year, DoD’s efforts there were essentially nonexistent.
In "RFID on the front lines" on page 28, Bob Trebilcock is the first editor to tell thestory of what DoD has been doing with RFID during the past few years.And you’re goingto be surprised. For instance, ever hear of Marines in Iraq using Web-based search tools,GPS and active RFID to track truckload shipments in the field in real time? I doubt it.
What’s most interesting here is that RFID has penetrated deep into the military’s infra-structure.And it’s only going to push deeper as DoD’s supplier mandate, similar to Wal-Mart’s, ramps up this year.
Meanwhile, the research firm Aberdeen Group has just released its latest report: "Find-ing the Tipping Point for RFID." As you will see (literally), RFID is now typically part ofthe data capture and management discussion. (We’ve put together a four-part report onthose survey results, appearing exclusively on mmh.com in our first Vlogs. So in addition tothe story in words, we’re telling it with video interviews.And this is only the beginning ofwhat we’ll be doing with video this year at mmh.com. Stay tuned.)
Clearly, RFID has worked itself into how people think and how they approach informa-tion systems of the future.That’s a break out move for any technology. It’s time RFID wascredited with that, and we stopped waiting for the old world to end with a big bang.
MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 5
F
GARY FORGER, EDITORIAL DIRECTOR
M y V i e w
RFID’s quiet bang
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Following a strong 2005, the U.S.economy is promising another solidperformance in the new year. Not
only will the general econo-my be robust in 2006,but so will both thewarehousing andmanufacturing sec-tors. In turn, theywill keep sales ofmaterials handlingequipment and relat-ed information sys-tems at high levels aswell.
The U.S. Gross DomesticProduct (GDP) moved ahead 4.1%in the third quarter in 2005. In fact, thatnumber would have been 4.5% had it notbeen for a number of hurricanes havingravaged the southeastern United States,according to Jim Haughey, an economistfor Reed Business Information, parentcompany of Modern. He expects thatwhen the final numbers are in, GDP in2005 will advance 3.6%.
Overall, Haughey says he expects anaverage of roughly 4% growth in GDP in2006. "Historically, this is very stronggrowth," he adds.
Manufacturing mirrored the econo-my's surge in 2005.“Manufacturing startedstrong in 2005, slowed a bit, and finished
strong to end the year," Haughey says.Following a 4% manufacturing expan-
sion in 2005, Haughey expects similargrowth in 2006.Withmanufacturers operatingat 80% of capacity,these operations arepoised to add totheir capacities in2006, he says.
Auto manufactur-ers are not faring as
well as most othermanufacturing sectors,
he adds. Due inpart to imports
taking primary marketshare, coupled with a lowerdemand, automobile suppliersare feeling the crunch.Thesame goes for parts manufac-turers in middle America, assome of those operations arebeing outsourced abroad,Haughey says.
The warehousing/distribu-tion sector is experiencingrecord low inventories, cou-pled with ever-climbingthroughput.While Haughey does notexpect a major change in this environ-ment, he does expect the segment willgrow faster than manufacturing as import-
ed goods continue to flow through thesupply chain in 2006 and beyond.
Warehousing will continue to see asurge in goods throughput in 2006, fol-lowing a 2005 that saw a 4.8% increaseover 2004 numbers, he says. Despite theincreased volume of goods movingthrough U.S. warehouses, Haughey saysthat square footage in the sector remainsrelatively flat as companies use softwareand advanced materials handling practicesto keep inventory levels low.
Materials handling equipment salesposted their largest sales year ever in
2005, ringing in a huge 27%increase over 2004, which was12% higher than in 2003.Andwhile the rate of increase willplateau in 2006, that's stillgood news for equipment sup-pliers.They can expect a flatyear in terms of growth, butcontinued strength from a dol-lar perspective.
Orders and shipments ofmaterials handling equipmentskyrocketed 30% and 31%,respectively, in September of2005, compared to the same
period in 2004—according to theModern Materials Handling Orders Index(www.mmh.com)
"The truck market has peaked,"
OUTLOOK
Following banner year in 2005,expert expects robust 2006 Strength in the general economy will carry forward to the manufacturing and warehousing sectors aswell as materials handling equipment sales.
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 7
Materials
handling
equipment
sales posted
their largest
sales year
ever in
2005.
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Haughey says, "and although conveyorsales continue to rise, the truck marketis much bigger."
Prices for materials handling equip-ment are expected to creep up roughly1.5%, as opposed to the 5.3% increase in2005. "Steel prices continue to slide,helping overall prices slow their upwardmovement," he adds.
EDUCATION
Certificationprogram forRFID expandsAs a response to the growing numberof major retailer mandates to use RFID in their supply chains, a vendor-neutral certification program is beingdeveloped.
The Computing Technology IndustryAssociation (CompTIA) has announcedthe development of an educational semi-
nar that wouldgive participantsthe CompTIA RFID+certification(www.comptia.org).The creden-tial would "vali-date theknowledge andskills of profes-
sionals needed to meet the expectedhigh demand for RFID talent over thenext several years," says the organiza-tion.
"The industry as a whole can usethe certification as proof of the founda-tional knowledge regarding RFID tech-nology," says Dave Sommer, director ofRFID initiatives for CompTIA. "In thepast, each vendor has done its owntraining—we'll eliminate some of thatredundancy."
Recently joining the challenge toeducate RFID professionals is ZebraTechnologies Corp., a supplier of busi-ness printing solutions (www.zebra.com).The company was the first to introducean on-demand RFID printer/encoder andcontinues to develop industry protocolsand technological standards.
Research conducted by strategicconsulting firm Frost & Sullivan showsthat of 500 North American companies,roughly 50% have undertaken any typeof RFID initiative or plan to do so dur-
8 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
Q1 Q2 Q3 Q4 Q1 Q22005 2006
Q3 Q4
140
130
120
110
100
Ord
ers
inde
x
Despite a dip in the MMH Orders Index
expected in 2006, the materials handling
industry is poised for a strong year.
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ing the next 12 months. But, a shortageof skilled RFID practitioners could ham-per the development of the industrialRFID implementation, according toCompTIA.
"As the number of RFID implementa-tions continues to rise, certification willbecome increasingly important as a meansfor companies to ensure they are deploy-ing the appropriate RFID systems to meettheir business goals," says Bob Cornick,vice president of RFID at Zebra.
Zebra is not alone in its work todevelop the certification.A number ofthird-party logistics providers, profes-sional industry groups and technologycompanies are also lending expertise.
You can take a beta exam for theRFID certification on the CompTIAWeb site.And, those who pass the betaexamination will be awarded the certifi-cation.The current cost for the exam is$75, with the final version increasing toabout $200 in March 2006, Sommersays.
CONFERENCES
NA 2006educationprogram setMarch is not that far away.Which meansit's not too early to make your plans forNA 2006 in Cleveland, Ohio (www.na2006.org).
This year's show, set for March 27-30, offers a bevy of new materials han-dling solutions, technology advancementsand educational seminars.
Leading the docket of activities is thefree Executive Forum—open to all atten-dees and exhibitors.The forum featuresvice president of operations at GreenMountain Coffee Roasters Jon Wettstein,who will speak on his operation's success-ful extended supply chain. Paul Matthews,senior vice president of Limited LogisticsServices Inc.,The Limited, will discussmoving supply chain management into theboardroom and how maximizing efficiency
can drive profitability.Finally, the president of supply chain
networks at Lucent Technologies Jose A.Mejia will provide insight on how Lucentwas able to emerge from a tumultuoustime with a revamped supply chain.
NA 2006 visitors can look forward
to the RFID Education Center, which willdetail the latest developments, technolo-gy, strategies and trends for enterprisesfacing the challenge of deploying RFIDsolutions into their supply chain.Thecenter will explore new standards beingdeveloped in the industry as well as
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 9
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methods undertaken by companies hav-ing taken the RFID plunge.
As in past years, attendees can take ofadvantage of free show floor seminars.Thehighly focused, half-hour seminars arehosted by industry experts in materialshandling and logistics solutions, and will beconducted in specially designed theaters
on the show floor.The seminars are sched-uled to explore everything from lean man-ufacturing to warehousing management.
A strong response has brought backthe supply chain short course. Represen-tatives from The St. Onge Company willexplain methods of network optimizationand critical factors in site selection.
Using case discussion and methodsdeveloped by Richard Muther &Associates, attendees will learn how tointegrate the five components of an indus-trial warehouse—layout, materials han-dling, communications, utilities, and buildingdesign—into a cost effective facility.
ONLINE
Global supplychain seminaron demand
Available on demand, Modern'sGlobal Supply Chain Conference can beaccessed at www.mmh.com. James P.Womack, president of the LeanEnterprise Institute, delivers the keynoteand addresses how the principles of leanproduction can be applied successfully tosupply chain management.
Womack is one of the world's lead-ing authorities on lean—and one of itsmost forceful advocates. He's the co-author of the business bestsellers LeanThinking and The Machine that Changedthe World. His most recent book, writtenwith long-time collaborator Daniel T.Jones, is Lean Solutions.
Also participating in the conferenceis John Fontanella, senior vice presidentand research director of supply chainservices at the Aberdeen Group.
Fontanella discusses with Modern's edi-torial director Gary Forger the results ofModern's industry-wide survey of the latestbuying and usage trends in materials han-dling equipment and systems and relatedinformation systems.A special emphasis ofthis session is the shifts in practices, issuesand metrics that impact the throughputand efficiency within the four walls of theplant and warehouse.
BEST PRACTICES
Top supplychains identifiedFor the second consecutive year, Dell tooktop honors in AMR Research's SupplyChain Top 25, a list exemplifying the verybest in supply chain practices. Published
news&Trends
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recently in "The AMR Research SupplyChain Top 25 for 2005," the list identifiesthe manufacturers and retailers that exhib-it superior supply chain performance.
Rounding out the top three perform-ers are Proctor & Gamble, in the secondspot, followed by IBM in third. Bothcompanies moved up a spot from theprevious year's rankings.
Nokia falls two slots to fourth in2005, while Toyota Motor moves intothe fifth spot from sixth last year.
Top supply chain leaders shapedemand, instantly respond to marketchanges, and outflank competitors,according to AMR Research (www.amrresearch.com). Benchmarking datasay leaders carry 15% less inventory, are60% faster to market, and complete 17%more perfect orders.
The report identifies what is publiclyknown about each company's past per-formance, and augments this informationwith analysis of future earning potential asdictated by supply chain dominance.
The first component of the ranking ispublicly available financial data, whichcomprises 60% of the total score and ofthat, return on assets and inventory turnsaccount for 25%, and trailing 12 monthsgrowth accounts for 10%.The secondcomponent of the ranking is AMR's opin-ion, which is 40% of the total score.Theopinion component was based on astructured voting methodology acrossAMR Research's team of analysts.
MANUFACTURING
The changingculture of leanWithout leadership on the C-level advo-cating for a complete migration to a leanmanufacturing philosophy for subordi-nates, truly lean manufacturing processesare an impossibility, according to MikeGugger, manager of special projects atTechsolve (www.techsolve.org).
Gugger, who has overseen many leanmigrations, says leadership remains thekey in making a commitment to lean."The number one lean success indicatoris leadership," he says. "If this isn't in the
heart of the leader andhe is not acting on itdaily, then lean cannotbe successful."
He admits migrat-ing to lean philosophies
is an exhaustive exercise. "CEOshave to reevaluate their personalbeliefs as a whole, not just a cul-ture," Gugger adds. "It's a matterof integrity. If you're saying onething and doing another your sub-ordinates will pick up on that.Setting a good example is key."
news&Trends
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 13
Mike Gugger
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In one lean installation that Guggerdirected, the CEO was reluctant to assumethe responsibility as a lean leader. OnceGugger and his team of consultants left thesite, the plant reverted to its old bloatedways. "A leader has to drive that culturechange. Ideas for improvement come fromthe shop floor, but recognition and drive
must come from the C-level office," hesays. "Lean has to be a way of life."
Gugger insists the change to leanmust be gradual. "Institutionalizing lean isa long term behavioral change. It cannotbe done in the short term—it is a jour-ney," he says. He adds that companiescurrently suggesting they are a com-
"If companies have not completelyeliminated waste, then they are not com-pletely lean," he says.
EQUIPMENT
Keeping thedock safe
Dock shock and trailer drop are leadingto operator injury and equipment dam-age.And despite the prevalance of theseoccurances, more can still be been doneto curb the jarring incidents.
Both situations occur when lifttrucks enter and exit trailers, with andwithout heavy loads.The transfer pointbetween the dock and the trailer is thesite of considerable vibration—damagingto both the driver and truck.
To help curb operator injury andfatigue and to decrease costly equipmentdestruction, Rite Hite (www.ritehite.com) has engineered a solution that aimsto smooth things out.
The Dok-Lok vehicle restraint wasengineered to hold trailers steady and toprovide minimal vibration to lift truckoperators when crossing the dockthreshold.
"We bridged the gaps between level-er and dock height," says Matt Sveum,project manager for the company. "Weare finding up to a 50% reduction invibration using the Dok-Lok."
news&Trends
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news&Trends
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 15
Stephen C.Turnerhas been named vicepresident of servicefor RemstarInternational, Inc…Toyota MaterialHandling U.S.A., Inc.,(TMHU) announcesseveral managementchanges, includingAdam Hughes asnational dealer salesmanager, EricRobinson as nationalIT manager, LarrySanders as fleetservices manager andCurt Rhoades asrental and remarketingmanager… AutomaticSystems, Inc., announces thatRobert A. Pierson has joined theenterprise as manager of industrialsales… Creform names the follow-ing four associates to vice presi-dent positions: Kaz Tanikai, KeithSoderland, Zen Matsui and JoeOtake… SATO America, Inc.,announces the appointment ofTerry Bresin as western regionalsales manager… Ozburn-HesseyLogistics names Karen Hall direc-tor of marketing and communica-tion for the third-party logisticsprovider… Deb Pitman hasjoined Orbis Corp. as director ofsupply chain management, respon-sible for all points along the com-pany's supply chain, includingsourcing, scheduling, materials andcustomer support.
Mitsubishi Forklift Trucks offi-cially opened its new CustomerFocus Area in Houston to dealersattending the annual dealer confer-ence in Houston… Avaya andSymbol are joining forces to pro-vide a joint solution designed to
people to knowimprove organizational productivity bygiving workers a wireless mobile com-puter that delivers advanced levels ofvoice quality and can perform manyactivities that would otherwise require
the use of several devices... TNTLogistics North America hasopened a 250,000 square-foot distribu-tion center for BMW of NorthAmerica, LLC in Stockton, Calif.
Larry Sanders
Adam Hughes
Stephen Turner
company news
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mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 17
Several years ago I was driving home from NorthCarolina late one night. Tiring, I stopped at a rest
area for a quick nap. Upon awakening, my battery wastoo weak to start the car.
A helpful soul stopped, but neither one of us had anyjumper cables. But, he said it wouldn’t be a problem.
The kind stranger pulled his car up to mine until thebumpers touched and then proceeded touse the jack handle to span the positivebattery terminals. He instructed me tostart the car. I was skeptical, but bygosh, it worked!
Even when the right tools are notavailable, creative people find a way toget the job done. They just “make do.”
From my early years in the autoindustry, I became accustomed to work-places customized with cardboardpadding and duct tape to make up forthe ergonomic comfort that the engi-neers left out.
My own first warehouse “make do”was in a four-story warehouse buildingwith a freight elevator to get products up and a spiralchute to get them down. Before distributed printingwas common, getting orders to the upper floors wastedious. To improve it, we cut small holes in the floorsand installed a rope over pulleys, top and bottom. Clipson the rope held orders on the “clothes line” as theywere raised to the next floor. A doorbell signaled thatthey were on the way.
At the same company, we had a common productlabel on which we stamped the part number for prod-ucts coming off the production line. The labels wereplaced on the end of the boxes. As both a cost reduc-tion and productivity improvement, we found that ourbox supplier could easily print a blank label on the endof the box. And, to keep from double handling the self-inking stamp, we mounted it on the packing benchwith a metal guide to permit the operator to push the
box against the stamp, rotating its print head. Presto!—print and apply.
My partner, Bob Ouellette, started his career in asmall appliance factory. He recalls having a great dealof difficulty maintaining just the right tension on thefabric for heating pad covers. The engineers struggledwith it until one day when an operator appeared with a
fishing pole. With a little special rigging,it did the job for years. It became thehighlight of every plant tour.
Last month, I was in a facility inCanada. The warehouse manager, JoeFiorello, didn’t have the benefit of awarehouse management system (WMS)to support the operation. But, he createda couple of clever “make do’s.”
When product was low in a forwardpicking position, pickers released aspring-loaded flag from under the rackbeam. As it waved in the aisle, it was avery visible signal to the replenishmentoperator to bring a new pallet.
At a large mail order house inEngland, it was important that each picker finish his orher batch in 18 minutes flat to feed an indexing deliv-ery conveyor to the sorter induction stations. Eachpicker was rated by picking rate and assigned a numberof pick lines accordingly. The dispatcher had mounteda measuring stick on the bench so that as a pickerannounced his or her rating, fan-folded labels could bestretched along the table to the corresponding mark.What a simple work-balancing tool.
We’ve all seen the broomsticks, poles and home-made hooks for clearing jams on conveyors or in flowracks. I believe that by carefully observing the way theoperators “make do,” we could learn a lot more aboutthe details of work-place engineering.
The fine art of making doInnovative materials handling solutions often come from the most unexpected places.
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 19
equipment/systems
CONVEYOR UPDATE
At its tractor manufacturing plant in Fargo, N.D.,Case New Holland relies on a unique towlineconveyor system to help workers assemble mas-
sive, articulated agricultural tractors. The system fea-tures four different connected, towline conveyors (SISystems, 610-252-7321, www.sipasystems.com) thatcomplete assembly of the 60,000 pound machines.
Since implementing the system, Case New Hollandhas documented an assembly time savings in thousandsof manufacturing hours. This savings alone allowed thecompany to recoup its initial investment less than a yearafter implementing the new towline system.
The assembly process begins on a mainline indexingconveyor. This initial section uses two towline cartspositioned back-to-back to support the tractor. The firstcart carries the front axle half of the tractor unit, whilethe second cart supports the rear axle half. The tractorindexes through this phase of the system at 20 feet perminute as the front and rear axle assemblies receivepower transmissions and other components.
The system is configured in a “U” shape. At theindexing mainline conveyor’s midpoint—where theconveyor turns 180 degrees—the rear half carts divertto a separate indexing conveyor. This allows the fronthalf carts to continue along the initial conveyor wherethey receive cab subassemblies and other parts.
The separate indexing conveyor section featuresthree workstations for additional build-up of the rearaxles. Once the appropriate parts are added, the com-pleted rear half carts merge back into the mainlineindexing conveyor. There, the driveshaft and other
parts—including the main pivot assembly—physicallyconnect the tractor’s two halves.
The now-joined halves of the tractor are then posi-tioned at the starting point of the third conveyor sec-tion, a continuously moving, slow-speed mainline con-veyor on which the final assembly takes place. Toaccomplish this transfer, a fourth towline conveyor—the short auxiliary conveyor section—advances theconnected tractor from the initial assembly mainlineconveyor to the final assembly mainline conveyor.
For final assembly operations, the mainline slow-speed conveyor of the third section transfers the trac-tors through a range of work areas. Running at a vari-able speed of 0.25 to 0.75 feet per minute, this main-line slow-speed conveyor handles 448,000 pounds ofgross moving load. And, only one cart tows the tractorat this point, since the two halves are now connected.
When each tractor’s assembly is complete and the fin-ished product is removed, the empty carts are returned tothe staging area to be re-engaged with the first mainlineindexing conveyor, and the process begins again.
Case New Holland’s conveyorsystem for 60,000-poundtractors pays for itself in lessthan a year.
Towline conveyorincreases productivity
By Sara Pearson Specter, Editor at Large
Case New Holland saved thousands of hours ofmanufacturing time by implementing a towlineconveyor to help in the assembly of tractors.
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CONVEYOR UPDATE
Navarre Corp. scores gains using new linear and spiralconveyors as well as pick modules and a voice system.
Warehouse upgradegives orderpicking a lift
With growth and consolidation onthe horizon, national distributorof entertainment media and soft-
ware Navarre Corp. needed to increasewarehouse size and upgrade an outdatedorderpicking process.
The old process relied on pallets, fork-lifts and hand-packing stations for out-bound shipments. But Navarre of NewHope, Minn., needed to modernize opera-tions with a multi-level concept for the newwarehouse design (Keogh Consulting, 440-526-2002, www.keogh1.com). With thisexpansion, Navarre installed two, three-level pick modules (Bastian MaterialHandling LLC, 888-575-9992, www.bmh-corp.com). The design also has additionalcapacity for a third module. Other upgrad-ed features include the integration of orderwave management and a voice-directedpicking system.
Central to this success are nearly 5,000feet of linear conveyors combined with spi-ral conveyors to transport goods throughoutthe facility. The spiral conveyors recirculatecontainers vertically between pick modules,saving valuable floor space.
Spiral conveyors (AmbaFlex, 877-800-1634, www.ambaflex.com) also allow forincreased capacity within the pick modulewhen compared to belt conveyors. The cus-tom-designed spiral conveyors transport productsbetween three levels with infeed elevations more than12 feet above floor level in some instances.
The combined design allows Navarre to combine
cyclical picking with monthly new product releases—causing volume spikes for new stock keeping units(SKUs). Ultimately, total system requirements willexceed 25,000 SKUs.
By Sara Pearson Specter, Editor at Large
20 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
Spiral conveyors helped Navarre Corp. expand verticallywith a new multi-level warehouse design.
equipment/systems
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CONVEYOR UPDATE
Unilever-Bestfoods now loadssignificantly more trailers aday in less time while reducingproduct damage.
To improve overall worker safety by significantlyreducing fork lift traffic at a plant in Chicago,Unilever-Bestfoods Corp. implemented an
automatic over-the-road truck loading system. The turn-key system automatically loads up to 145
over-the-road trailers a day. This throughput exceedsthe food company’s original target of loading 90 to120 trailers a day, allowing for future growth.
In addition to the automatic truck loading system(Advanced Systems, 248-647-2331, www.advancedsystems.biz), the project included the relocation offive case palletizers to a warehouse adjacent to thefacility’s shipping doors.
Existing case conveyors were relocated to feedthe palletizers. Meanwhile, a new pallet handlingsystem accumulates and meters pallets to the auto-matic truck loading system (ATLS) at all six loadingpositions.
The solution has led to several benefits toUnilever-Bestfoods. To begin, overall worker safetyincreased due to a significant reduction in fork lifttraffic. This led to fewer vehicles and redeployment ofthose operators elsewhere in the facility. The reduc-tion of the fork truck fleet has also reduced the asso-ciated maintenance costs.
Unilever-Bestfood’s ATLS runs continuously, 24hours a day, 7 days a week with minimal supervision.Product damage has been reduced. Load accuracy isnow 100% because the system automatically scans
and confirms the placement of all pallet loads insidethe trailers.
As needed, the ATLS can automatically direct aportion of production to forklift pick-up locations formanual rail car loading. The system handles two,3,000 pound pallet loads simultaneously.
Pallet loads are positioned in a range of pat-terns—including pinwheeling—inside a variety ofconventional, unmodified common carrier trailersizes. The ATLS also allows unimpeded access forconventional fork trucks to dock doors not used bythe system.
A custom software package maximizes sequencing,accumulation and logic for metering pallet loads tothe ATLS. It interfaces with the company’s control,verification, and business management systems. Andthe system software can be programmed to accom-modate priority picks.
By Sara Pearson Specter, Editor at Large
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 21
equipment/systems
Loading systemimproves worker safety
At Unilever-Bestfoods, the automatic truck loadingsystem (pictured between loads) sequences, transfersand places loads in a variety of trailer sizes.
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When Mercedes Benz decided to open aNortheast regional distribution center,
the company’s objectives were threefold. First, it needed a new, more productive DC to replace
an outdated one in Maryland. Second, Mercedes wanted toestablish a central location, known as a regional masterDC, for all of its slow moving parts in the United States.Third, the automaker needed a greenfield facility to launchits new lean distribution initiative in North America.
And by all indications, Mercedes met all three objectives.Based in Robbinsville, N.J., the DC’s design mirrors that
of a DaimlerChrysler DC in France that is known for its effi-ciency and productivity at storing and distributing partsthroughout that country. The Robbinsville DC is more than450,000 square feet and processes 15 truckloads daily to 105dealers across the Atlantic seaboard. In addition, between800 and 1,200 packages of air freight shipments are deliveredto 230 dealers across the U.S.
By Jeff O'Neill, Associate Editor
Fast lane forslow movers
22 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING
Higher productivity, more efficient
warehousing and a new approach to
handling slow movers are the ddrivers
behind Mercedes' newest parts DC.
Lori Gonzalez,supervisor of regionalmaster operations
MMH0601WD.qxd 1/12/2006 11:06 AM Page 22
Located just one hour from a major Northeast shipping port,Robbinsville proved ideal for the automaker to relocate itssmaller DC in Baltimore. “The Baltimore site [200,000 squarefeet] couldn’t accommodate our needs for a regional master(DC),” says Lori Gonzalez, supervisor of regional master opera-tions. “We feel that this site not only accomplishes our goalscurrently, but allows for future expansion as well.”
In fact, the DC has already made its mark. “Very quickly,we increased our overall productivity by over 30%,” Gonzalezsays. And, thanks to the new distribution strategy, “our linecounts went up, and our touches went down.”
Meanwhile, the DC is in the process of receiving all slowmovers from the automaker’s other four DCs in the U.S.When that is completed, Robbinsville will be the sole U.S.supplier of slow-moving parts, which equals 80% of allstocked part numbers.
Central to the DC’s overall success now and in the futureis a conveyor system (Gebhardt USA, Inc.) that “allows us amore efficient operation,” Gonzalez notes.
Materials flowServing as the cornerstone of the operation, the conveyor
coordinates path placement with the warehouse managementsystem (WMS) to determine appropriate routes for each tote.Routes maintain proper direction through a series of bar codereaders that relay information to the WMS that then directsthe conveyor to either divert parts or keep them on their way.
At the end of the conveyor causeway is a three-level pickingtunnel that Gonzalez and others call the stollen—the Germanname for a tunnel dedicated to medium-sized, fast-movingparts. Within the tunnel, workers putaway and replenish.Armed with handheld bar code readers and directed by centralcomputer terminals located at each of the three levels of thetunnel, workers ensure that outgoing totes are verified for con-tents and directed on their proper path (see layout drawing fordetails on the flow of inventory in the DC).
With more than 160,000 separate storage locations, theRobbinsville DC is in constant motion. A complex series ofchecks—through manual and automated bar code readers—keeps inventory flowing.
Built on a standards-based work environment for associ-ates, the management team has developed a series of expect-ed work benchmarks—a high and low range by area—to eachworker and “through coaching, we expect each individual tomeet those goals,” Gonzalez explains. “Identifying those effi-
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Mercedes' pick tunnel is set to accommodateall of the car maker's slow-moving parts forthe entire United States.
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ciency gaps makes jobs easier andincreases productivity.”
Regional philosophyCentral to the standards-based envi-
ronment, Gonzalez explains, is the com-pany’s push into the regional master strat-egy. In fact, Robbinsville processes one-third of all parts sales orders in the U.S.
Mercedes’ operational philosophy isbased on seven core concepts: · Minimize processes and unnecessarysteps to quicken work flows· Identify product defects before ship-ping to decrease returns· Discover methods to eliminate occur-rences of damages · Eliminate double handling in trans-
portation to decrease touch and/orhandling costs· Attempt to eliminate excess motion tocut down on unnecessary worker strainand curbing the possibility of injury· Eliminate waiting for product in pick-ing, putaway or delivery to ensure evenwork flows—reassigning people to themost appropriate work area to main-
24 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
warehousing/distribution
Bulk Storage
BulkStaging
Conveyor Shipping Lanes
Small Parts Storage
Conveyor
12
6
9
5
4
11
10
3
Oversize Pallet Storage
8
Medium/Bulk Storage
Stollen Pick Tunnel
Receiving
Hazmat and HoldStorage
Sort/Inspect
Cross-dock location
7
10MercedesRobbinsville, NJPRODUCT: Mercedes auto parts
SQUARE FOOTAGE: 456,128
SKUs: 58,000
EMPLOYEES: 87
SHIFTS: 3, 8.5 hours each
BBulk putawayParts are received via five inbound docks at the MercedesDC and separated into lanes dependent on part size. For bulkstorage, workers scan each palletainer load and affix printedlabels from the WMS—received from a nearby central termi-nal—for storage location on each part for putaway. If the part isa rush order, the associate will bring the part over to a cross-dock location at shipping for same day shipping.Workersemploy stock pickers to transport palletainers over-the-roadtrucks, through receiving, to bulk staging , and then to bulkstorage , in standard 30-foot racks.Very large, palletized parts are sent to oversize pallet storage
. Once the palletainer is delivered to its location, the associ-ate will scan the location bar code on the rack and confirm theitem number and quantity on the handheld reader.Small/medium parts putawayOnce unloaded from inbound freight, small parts are staged inone lane on the receiving floor.Workers then sort and inspect
each container, prompting the WMS to print tags indicatingstorage location for each part within the palletload. If the part isa rush order, an associate will bring the part over to a crossdocklocation for same day shipping. Once tagged, parts are placedin totes on conveyor , based on storage location. Bulky medi-um-sized parts are placed on carts and wheeled over to medi-um/bulk storage . Once parts arrive at storage destinations in
small parts storage or the stollen , workers scan eachputaway tag per item, directing small items to a specific storagelocation. Once the line item is stored, associates scan the loca-tion bar code and verify the storage activity through their hand-held linked to the WMS.Small/medium parts picking For small- to medium-sized parts, the WMS will print a paperpick ticket that workers receive at central terminals on any levelof the small parts storage or stollen for system-directedpicking.Workers then manually pick parts and scan each loca-tion of each line item—either an each or any number of thesame part—in order for the WMS to be updated. Oncescanned, printed labels are placed on each line item whenplaced in a tote on the conveyor . Each tote load is deter-mined by the shipping destination of each part.The tote is thenintroduced down the conveyor path where overhead scannerson the conveyor direct the route of the tote. Loads are thendiverted to a perpendicular leg of conveyor in shipping ,where workers build pallet or cage loads dependent on dealerlocation.Bulk picking Associates receive paper pick tickets via a central terminal nearbulk storage .Workers pick each line item using a stock pickerand scan the location bar code.The line item is directly taken toshipping where shippers build loads based on dealer locale.11
4
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109
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7
2
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5
4
3
2
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warehousing/distribution
tain the ideal flow and· Identify barriers or gaps to correctinefficiencies in the work flow—help-ing to increase standards.
“We are cutting down on extra han-dling, which is wasteful, and we continu-ally search for ways to streamline ourprocesses,” Gonzalez mentions as resultsof the their new operations philosophy.
The challenges of startup While the DC operates smoothly
now, Gonzalez concedes that integratingthe workforce into the new facility posedsome of the more daunting challenges.
Having closed the Baltimore DC onthe Friday before July Fourth weekend,Gonzalez and her team were chargedwith opening the new facility the follow-ing Tuesday, without the benefit of theBaltimore facility operating as a backstop
in the event of monumental breakdownin Robbinsville. Instead of closing oneDC and immediately opening another,Gonzalez says she would have graduallydiminished Baltimore’s operations—toensure customer demands were met—and to take some of the initial pressureoff Robbinsville.
“That first week was a killer” with60% of the warehouse workforce and90% of the management staff being new,Gonzalez says. “Our workers had ques-
tions that our team leaders couldn’tanswer because they hadn’t beentrained yet.”
A prime example was the conveyorsystem, an installation with more thantwo miles of track and multiple overheadand side bar code readers. Associatesneeded time to learn how to best use theconveyor to maximize productivity.
Similarly, associates faced a learningcurve with the DC’s WMS. Establishingpicking zones was an initial challenge
Signature bins move rapidly throughthe warehouse operation—checkedon their way by overhead and side barcode scanners.
Pickers at Mercedes use the conveyor system to stage and con-vey medium- and slow-moving parts.
MMH0601WD.qxd 1/12/2006 11:07 AM Page 25
that was overcome by experimentationwith various pick paths.
“Once we got through the initialphase of implementation,” she says,“we were much better off.”
People powerPlaying a huge role in Mercedes’
move to Robbinsville from Baltimore isthe company’s commitment to the peo-ple who execute on the floor. Takingpride in the aesthetics of the facility,Gonzalez says little details go a longway in keeping associates satisfied.
“Switching from a facility that waswell over capacity in Baltimore towhat we have now makes a big differ-ence,” she says. From the brilliantblue color permeating every aspect ofthe infrastructure, to natural light andfull-time air conditioning, “employee
comfort was obviously a major priorityin the initial design,” Gonzalez says.
Despite the more than three-hourdrive from Baltimore, 35 of the 75Mercedes employees made the treknorth and continue to work for thedistribution operation. “These guysare my eyes and ears in here,”Gonzalez says of the employees she
oversees. “They make it all go.”Gonzalez explained that the move
to a larger facility precipitated the hir-ing of more than 20% additional asso-ciates than were present in theBaltimore facility. And, while the larg-er workforce was able to ramp upthroughput at roughly the same 20%margin, the company eliminated bothovertime and temporary workers.
Currently, the Robbinsville facilityis processing 11,800 line items daily—compared with 9,500 daily at theBaltimore site. And, she says, “Ourhours-worked compared to our lines-out is improving every month.”
Going forward, Robbinsville is capa-ble of massive expansion—the companyexpects to be operating at 1.2 millionsquare feet in coming years. Gonzalezsays she expects the small items storagearea to add another level, bringing thatlocale to three floors of picking space.
She adds, “We’re happy with whatwe have in place now, and are excitedabout the possibilities for the future.”
26 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
warehousing/distribution
Order pickers build “cage” ordersdependent on dealer and locationand ship same day if orders arereceived before 5:00 p.m. EST.
CONVEYOR SYSTEMS: Gebhardt USA,
440-260-7600, www.gebhardtusa.com
CONVEYOR-MOUNTED BAR CODE
SCANNERS: SICK, 800-325-7425,
www.sickusa.com
HANDHELD BAR CODE READERS:
Intermec, 425-355-9551, www.intermec.com
LIFT TRUCKS: Crown, 419-629-2311,
www.crown.com
MATERIALS HANDLING CARTS
AND CAGES: Cannon, 800-251-6235,
www.cannon.com
System Suppliers
MMH0601WD.qxd 1/12/2006 11:08 AM Page 26
The 2006 Material Handling & Logistics Show and
Conference (NA 2006) is your one-stop destination
for manufacturing, warehousing and distribution
solutions. With a comprehensive showcase of exhibits
and an Educational Conference outlining leading-edge
equipment and technology, this is your must-attend event
in 2006. By attending NA 2006, you can not only compare
the latest material handling and logistics solutions
at one time, at one place, but see how they work
together to make your supply chain work more
productively and profi tably.
Thousands of Solutions NA 2006 will be the most comprehensive material
handling and logistics event in the United States in
2006. Over 400 of the Industry’s top providers will
cover 150,000 square feet at Cleveland’s I-X Center.
NA 2006 exhibits are organized into Solution Centers so you can easily fi nd solutions to:
• Solve manufacturing challenges
• Streamline fulfi llment and delivery
• Improve assembly logistics and support
• Take advantage of the latest IT solutions
NA 2006 will provide perspective from industry leaders
with over 50 Educational Seminars and a 1/2-day
Executive Forum titled “Breakthrough Achievements In
High Performance Supply Chains” — all free to attendees.
NA 2006 will also feature an RFID Education Center
demonstrating the latest technologies, strategies and
trends for enterprises incorporating RFID solutions
into their operations.
Make Plans Now to Attend NA 2006!By attending NA 2006 you can discover the latest
solutions to help you differentiate your product, improve
customer service and increase the overall profi tability
of your supply chain. Plan now to attend this one-of-a-
kind event from March 27-30, 2006 in Cleveland’s I-X
information, Educational Session details, Show news and
more on-line at www.NA2006.org or call 800-446-2622
or 704-676-1186.
Focused Solutions For Your Supply Chain
March 27-30, 2006 • I-X Center • Cleveland, OH
NA 2006 is sponsored by:
NA2006.orgRegister today for FREE admission:
For information on exhibiting at NA 2006,
contact Show Sales at 800-345-1815 or 704-676-1190
563759_027.indd 1563759_027.indd 1 1/10/2006 9:52:00 AM1/10/2006 9:52:00 AM
information management
Last June, Assistant Under Secretary ofDefense for Supply Chain Integration AlanEstevez visited a Marine logistics unit in Iraq.
Although Estevez has been at the forefront ofdeploying RFID technology for military applica-tions, what he found surprised even him.
“If you’re going to use RFID to achieve your end-goals, you can’t just throw the technology up andexpect it to work,” Estevez says. “You have to look atyour business processes to get the most out of it.”
The Marines had done just that, linkingtogether three different technologies for completeinventory visibility.
The first was information about the contents of
shipping containers provided by active RFID tags.The second was satellite-based vehicle trackinginformation. The third was an Army-developedlogistics search system that allows a user to pullup a map of an area.
By combining the three, a Marine could usecoordinates to pull up a map of an area, locatevehicles with GPS, and then ping those vehiclesto see what material is in the cargo containers.
While it hasn’t happened overnight, RFID technology isbeginning to transform the Department of Defense’ssupply chain from storage depots to the battlefield.
RFID on thefront lines
Marines in Iraq are using Web-based searchtools, GPS-positioning technology and activeRFID to track truckload shipments in thefield in real time.
28 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
By Bob Trebilcock, Editor at Large
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mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 29
“That’s just one small site, but it’s aglimpse of what the power of this tech-nology can do for us downstream,”Estevez says.
It’s also a glimpse at the benefits theDepartment of Defense (DoD) may reapfrom RFID. Thanks tomore accurate and timelyinformation, that one unitreduced its inventory valuefrom $127 million to $70million and its order back-log from 92,000 requestsfor supplies to 11,000.
“They could do thatbecause the soldiers inthe field could access thesame information anddidn’t reorder material,”says Estevez. “The dia-logue between logisticsand field units has changed from‘Where is my stuff?’ to ‘Why isn’t mystuff moving?’ because they can see it.”
That dialogue, however, didn’tchange overnight. Applications like theone being used by the Marines are theculmination of nearly 13 years of work-ing with RFID technology in the militarysupply chain. The DoD’s experiencesand timeline can provide valuable les-sons to private industry as it now looksfor supply chain applications for RFID.
The first war Retailers are interested in RFID to
reduce stock outs and redundantorders that result from a lack of inven-tory visibility.
Reducing stock outs was also theimpetus behind the DoD’s adoption ofRFID. “During Desert Storm, we hadto open 24,000 of the 44,000 contain-ers we sent to the Gulf to ascertaintheir contents,” recalls Estevez.
That lack of visibility meant soldiers
and commanders often ordered redun-dant inventory because they didn’t knowwhat was inside the containers. Notknowing whether they had spare partsmeant they might order extra helicoptersor tanks just to make sure they had
enough operating equipment.In those instances, they weren’tjust shipping equipment. Theywere also shipping the partsand crew to operate and main-tain it.
Enter RFID. In 1992,DoD began to experimentwith active RFID reusabletags (Savi Technologies, 408-743-8000, www.savi.com).Soldiers would scan bar codesor manually enter informationas they were loading shippingcontainers. That information
was written to an active tag to track thecargo inside those containers. Thetechnology was slowly adopted, show-ing up in Somalia, Haiti, Bosnia andKosovo.
Each new implementation, however,started from scratch. That’s because themilitary had not yet formulated a stan-dard approach to RFID. “In 1997, weput out guidelines that said we shouldconsider RFID,” says Estevez. “But itwas never embedded in training andwas never embedded in policy.”
Enter IraqThe current conflict in Afghanistan
and Iraq changed all that. “In 2002, wewere already in Afghanistan and begin-ning the preparations for Iraq,” saysEstevez. “General [Tommy] Frankssaid he wanted all consolidated ship-ments coming into the theater to beRFID-tagged so we had visibility.”
That meant the military could nolonger do RFID on an ad hoc basis,relearning lessons with each newimplementation. Estevez was asked topull together an RFID policy. In addi-tion, Charles Fletcher, the commanderchosen for the core support commandin Iraq, had worked with RFID inBosnia and understood the technology.
The initial results, Estevez says, weremixed. The troops who came withGeneral Fletcher knew how to success-fully use the technology. Over time,however, those troops were augmentedwith additional troops and reserve unitsthat had never seen an RFID tag. Thosechallenges were compounded whencargo was handed off to troops in thefield, who were constantly on the move.Then, there were the natural elements,like working with RFID in a sandstorm.
Even with those limitations, Estevezsays visibility into inventory was signifi-cantly improved over the first Gulf con-flict. “In certain commodities, we were
Following Desert Storm, the DoDimplemented a program usingactive RFID tags to identify theaggregated contents of shippingcontainers and large cargo pallets.
Alan Estevez,assistant under secretary of defense
MMH0601IM.qxd 1/9/2006 2:43 PM Page 29
30 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
information management
able to go into battle with three daysworth of material on the ground insteadof the 30 to 60 days of inventory weneeded for Desert Storm,” says Estevez.“That’s because we knew what materialwas in the pipeline.”
A way of doing business Fast forward to July 2004. With 12
years of implementation under its beltand success in Iraq, using active RFIDfor consolidated and containerized cargoand unit equipment became policy.
Since then, the DoD has created aglobal RFID infrastructure that includes1,500 read/write stations located aroundthe world. Information collected byreading tags at those locations feeds acentral database. “Anyone with the rightclearance can track an active tag movingthrough the system and access the datafrom that tag to look inside the contain-er,” says Estevez.
That network can be accessed in awarehouse or on a base. In fact, a soldieron the battlefield using a portable RFIDfield pack equipped with a mobile read-ing unit and a radio modem or satellitelink can even access the information.
The next step Active tags provide item-
level information aboutconsolidated shipments.But collecting the informa-tion to populate those tagsis still a cumbersomeprocess, requiring bar codescanning or manual dataentry. And, those shipmentsare eventually deconsolidat-ed, especially in the fieldwhere bar codes may notget read all the time.
“My stock speech is thatwe neglected to include abar code scanner in the bar-
rel of an M16,” says Estevez. “Out in thefield, I might have a Marine working in110 degree heat without material han-dling equipment while random rocketfire is coming in on him. Scanning a barcode so we have accountability isn’t nec-essarily the first thing on his mind.”
That’s where passive RFID tags comeinto play. In the future, pas-sive RFID tags, like thosebeing used by Wal-Mart, willbe applied to products, car-tons or pallets when theyleave a supplier’s facility.Those tags will be automati-cally read when they’reunloaded at one of the DoD’s26 major supply depots.
Those reads automaticallyprovide the information toreceive the shipments intothe depot. When they areconsolidated for shipping,another read provides theinformation needed to popu-late the active tag on the ship-ping container. That meansno more bar code scans.
Once those shipping con-tainers are opened and pal-
lets, cartons or products removed, thepassive tags will once again be readautomatically—whether that read takesplace in a warehouse, on a ship or on thebattlefield using a portable field unit.
“If we ever develop material han-dling equipment for the field, we willhave RFID reading capability embed-ded in it,” Estevez says.
The first shipments are scheduled tobegin this month going to Susquehan-na, Pa., and San Joaquin, Calif. Estevezexpects it will take about seven years toroll out passive RFID to all supplydepots.
The technology is expected toimprove logistics in two ways. First, itbrings financial savings. “We did a veryhigh-level business case focused on pas-sive RFID,” Estevez says. “Our mostconservative estimate was a $70 millionreturn on investment over five years.The best case was $1.7 billion overthose same five years.”
Beyond the financial savings, there isanother benefit that can’t be quantifiedbut is every bit as important. “RFID willlead to enhanced readiness for ourtroops,” says Estevez. “That’s the abilityto have a multi-million-dollar piece ofequipment up and operating when youneed it rather than sitting idle in park.” Beginning this month,
the DoD will use passiveRFID technology to iden-tify the individual pallets, cartons and largeparts within a shipping container.
Click on mmh.com tolearn more about activeRFID applications.
Mobile RFID readers equipped withmodems and satellite technologyallow soldiers in the field to readtags and communicate with theDoD's host system.
MMH0601IM.qxd 1/9/2006 2:44 PM Page 30
Maryland & Virginia Milk Producers CooperativeAssociation Inc. didn't need a better way to
make butter: It needed a cheaper way. The regional milk marketing and processing
cooperative, located in Reston, Va., serves nearly1,500 dairy farms in 11 states. Among its loca-tions is a manufacturing plant in Laurel, Md.,that processes butter and processed milk.
With pressure to keep dairy prices low, thecooperative members were looking for ways toimprove production processes for its Laurel facil-ity’s butter division.
One area targeted for possible improvementwas the packaging and palletizing process, whichrequired manually packaging and palletizing itsperishable butter in 50-pound and 25-kilogramboxes with plastic liners. This process, on average,required two and a half workers per shift and evenmore workers during seasonal shifts.
To improve packaging efficiency, the companyturned to a robotic palletizer (Westfalia Technologies,717-764-1115, www.westfaliausa.com), which hasreduced labor costs and risks associated with manu-al lifting. For this tool to work, a new surface neededto be poured over the old traditional brick floor. Therobotic palletizer needed a level surface that con-tained less moisture.
The palletizer’s rate, size, low power consump-tion, and simplicity fit Maryland & Virginia’s
requirements perfectly. The system as configuredcan handle six to eight cases per minute, lift up to198 pounds and has a physical size of about 2.5feet by 2 feet. An arm protrudes from the robotbase to about 8.5 feet from center when fullyextended.
An additional benefit is that the palletizerrequires only 220 volts of power, avoiding aninvestment in an electrical upgrade.
“One person can now operate the line,” saysRandall Fischer, assistant division manager atMaryland & Virginia. “This system saves on man-power and eliminates the liability associated witha manual palletizing operation. Within two years,the palletizer will have paid for itself.”
By Jeff O’Neill, Associate Editor
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 31
productivity solution
With pressure to keepprices low, a dairy coop’smove from manual torobotic palletizing will payoff in less than two years.
A robotic palletizer reduces labor costs andrisks associated with manual lifting atMaryland & Virginia Milk Coop.
Palletizer keepsbutter churning
MMH0601PS.qxd 1/9/2006 12:34 PM Page 31
Supply Chain Solutions’ CEO LesBrand and co-founder Jim Wardhoned their skills in just-in-
time/just-in-sequence manufacturingwith Saturn and Dell. Now, they usethose practices to service the furnitureindustry in Grand Rapids, Mich.
The third-party logistics (3PL)provider receives parts, components andraw materials from office furniture man-ufacturer Steelcase’s suppliers in smalldistribution centers near the manufactur-ing plants. Products are then stored andstaged for delivery just-in-time and just-in-sequence when needed by the plant.
Today, Supply Chain Solutions hasopened seven distribution centers servingSteelcase and Haworth, another officefurniture manufacturer. The facilities,measuring between 100,000 and 150,000square feet, are designed for quick turn-around. Staging lanes for plant deliveryare emptied seven to nine times a shift.
While some products are stored onshelves, most of the inventory remainsin a distribution center for less than aday. For that reason, Supply ChainSolutions relies heavily on informationtechnology, like its warehouse manage-ment system (WMS) to direct associateson the floor and monitor inventory levelsfor reorder points (Provia Software, 877-776-8421, www.provia.com). Materialshandling is limited to lift trucks, palletjacks, simple rack and floor storage.
Supply Chain Solutions didn’t stopwith just delivering product to theplant. The team convinced Steelcaseand Haworth to collaborate on thedelivery of the parts they purchasefrom common suppliers, reducing thenumber of loads coming into a SupplyChain Solutions distribution centerand ultimately reducing transportationcosts for both manufacturers.
“The collaboration alone hasreduced transportation costs by 30 to35% for all the participating OEM’s,”says Brand. “Haworth tells us that forevery dollar they spend on our activity,
Building a new
SUPPLYCHAIN
By Bob Trebilcock, Editor at Large
32 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
MMH0601MFG.qxd 1/10/2006 12:21 PM Page 32
manufacturing
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 33
they’re saving four dollars in logisticsand handling costs.”
Getting goingIn 2001, when Supply Chain
Solutions began operations, Steelcaseoperated like most traditional manu-facturers. Sales orders from customerswent into a manufacturing planningsystem. Based on the manufacturingschedule, purchase orders were sent tosuppliers for the parts needed to pro-duce those orders.
Seventy percent of Steelcase’s orderswere short cycle orders, allowing just 10to 12 days between receiving and manu-facturing. The system allowed suppliersfive days to manufacture and delivertheir products. That meant inventory satat a Steelcase plant for four days prior toproduction.
Supply Chain Solutions replaced thatmodel with a load control center (LCC)that supports inbound service centers.The two coordinate the delivery of parts.
The LCC is the information manage-ment piece of the puzzle. It includes sev-eral different applications to consolidateand optimize information about orders ateach inbound service center.
An inbound service center is thematerials handling piece, the distribu-tion center where inventory from sup-pliers is consolidated, sequenced andthen shipped to various plants.
Pulling orders The first step when Supply Chain
Solutions engages a customer like
Steelcase is to request a file transmissionof all outstanding purchase orders to thesupply base. That information goes intoan order repository at the load consolida-tion center. The system puts the ordersinto a standardized format that is sent toassociates working on the floor of thedistribution centers. Associates are pro-vided with purchase order numbers, theitems that have to be pulled, and thetime frame in which they have to bepulled to meet delivery pickups.
The actual workflow is managed bythe warehouse management system.Since inventory does not typically stayin the facility for long, many items arestored on the floor and some in racks.Most picking is done with pallet jacksor lift trucks. Picks are confirmed byscanning a bar code label.
In addition to managing work, theWMS is also monitoring inventory lev-els. When stock dips below the reorderpoint, an e-mail is automatically sentto notify the supplier to replenish thatitem. Automatic notifications are alsosent to the furniture manufacturer’spurchasing and planning departments.
When deliveries are received at theinbound service center, a similar processtakes place. Pallets are unloaded imme-diately with lift trucks. An associatescans a bar code with a purchase ordernumber into the system. The systemcross-references the order repository todetermine whether the product will beplaced into inventory or sent to a staginglane to be crossdocked to a manufactur-ing facility later that day.
Collaboration With Steelcase onboard, Supply
Chain Solutions began providing asimilar service to other manufacturers,including Haworth.
Because both manufacturers hadsome of the same suppliers for manyparts and materials, there was someroom for consolidation of the process.“You had two trailers following each
other down the road to our facility andboth were half full,” says Brand.
Supply Chain Solutions managersproposed they take charge of inboundtransportation, combining the two orderson one truck to save both manufacturersmoney. “We did a pilot, and after thepilot showed quite a bit of success, weexpanded the concept out to multiple
regions across the U.S.,” says Brand. To coordinate that consolidation
activity, Supply Chain Solutions creat-ed a supplier portal that receivesorders from Steelcase and Haworth.When a supplier logs into the system,they acknowledge that they have anorder by creating an advance pickuprequest (APR) in the system.
The APR sends an automated signalto Supply Chain Solutions’ transporta-tion management system, which plansthe pickup in coordination with all theother activity in the transportation net-work. Once a pickup is planned with acarrier, information is sent back to thesupplier to prepare for pickup.
When the carrier picks up at the sup-plier’s facility, they click off the APR. Inturn, an advance shipping notification issent to Supply Chain Solution’s WMS
While most incoming parts areshipped out on the same day asthey are received, some inventory isstored in racks for several days.
WAREHOUSE MANAGEMENT SYSTEM:
Provia Software, 877-776-8421,
www.provia.com
LIFT TRUCKS: Caterpillar, 800-228-5438,
www.catlifttruck.com
RACKS: Leased from GE Capital,
www.gecapital.com
RF AND BAR CODE SCANNING:
Intermec, 800-934-3163, www.intermec.com
System Suppliers
MMH0601MFG.qxd 1/10/2006 12:22 PM Page 33
34 J A N U A R Y 2 0 0 6 / MODERN MATERIALS HANDLING mmh.com
manufacturing
system to prepare for receipt. When the purchase order is scanned
at the inbound service center, the systemdetermines not only whether the inven-tory is going into storage or to a staginglane, but it also allocates that inventoryby customer. Although Steelcase andHaworth are collaborating on deliveriesto the inbound service centers, ship-ments to their plants are segregated.
Next steps Now that Supply Chain Solutions has
optimized the delivery of parts to theplant, the 3PL is working with its cus-tomers to optimize other areas of the sup-ply chain. For instance, a West Coastcenter pre-positions inventory from Asiafor delivery to the Midwest. Another han-dles the refurbishment and reshipmentof office furniture coming off lease.
Brand even has plans to play a rolein the design and purchase of materi-als that are common to all manufactur-ing customers, like protective dunnagefor filing cabinets.
“The idea is that we could systemizethe inventory and bring it into one largeservice center that could service multi-ple plants and customers rather thanhave multiple smaller service centers,”says Brand. “There you could really startto leverage scale.”
Click on mmh.com to learnmore about how SCS
optimizes inventory flow.
An associate cross-referencesinbound parts to determine whethera pallet is staged for delivery to aplant or putaway for shipment later.
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www.scmr.com/gscc.
GSCC 2005 was developed to help logistics and supply chain professionals maximize their companies’
productivity and profitability. So it was no surprise that so many logistics and supply chain executives
accessed the online event, eager to learn more about lean supply chains, global logistics, capacity short-
ages, freight visibility, and much more.
This year’s GSCC featured keynote speeches and individual conference sessions, all moderated by
Reed Business Information editors Francis J. Quinn (Supply Chain Management Review), Michael A.
Levans (Logistics Management), and Gary Forger (Modern Materials Handling). “Our aim was to create
an event filled with featured speakers and workshop sessions that would provide the most value for
attendees,” said Quinn. “The result was a very comprehensive, informative conference.”
Special Supplement
By Bridget McCrea
TNew Supply Chain Horizons
Michael A. LevansChief EditorLogistics Management
Francis J. QuinnEditorial DirectorSupply Chain ManagementReview
Gary ForgerEditorial DirectorModern Materials Handling
www.scmr.com/gscc
January 2006 • Global Supply Chain Conference G35www.scmr.com/gscc
MMH060101_GSC.qxd 1/12/2006 9:45 AM Page 1
G36 January 2006 • Global Supply Chain Conference www.scmr.com/gscc
KEYNOTE SPEAKER JAMES WOMACK kicked off the thirdannual GSCC with an intensive discussion of how com-panies can apply lean manufacturing techniques to theirown supply chains. By applying principles originallydeveloped on the manufacturing floor, Womack said,companies can effectively drive waste out of their supplychains and reap significant benefits. Womack, the authorof the business best sellers The Machine that Changedthe World and Lean Solutions, is president of the LeanEnterprise Institute.
Using Toyota as an example, Womack discussed howlean concepts can help companies grow market share,post strong profits, and stand tall as industry leaders.Toyota, he said, aims to be number one inthe global motor vehicle industry by 2007.Much of the automaker’s success, he said,is based on “brilliant supply chain management” that cen-ters on lean concepts.
For companies to follow suit, Womack said, they mustemploy a three-pronged value-creation process, based on
customer-to-concept-to-launch cycles;order-to-delivery cycles (involvinginformation and production); anddelivery-to-recycling events. “To set thisup,” said Womack, “customers and sup-pliers must seek out the perfect, sharedprocess for every product.”
Getting lean isn’t always easy, admittedWomack, who said finding the right place to apply leantechniques can be particularly challenging for companies.He suggests using a simple formula developed and usedby companies like Toyota and based on a shared, continu-ous-improvement process that involves the company itself
as well as its trading partners and customers.“Supplier and customer must work together
on the presumption that every item has to getbetter and cheaper, and that every supply chain has tobecome more responsive and flexible,” Womack said.“This can only be accomplished through a shared, contin-uing improvement process.”
GSCC Keynote
The Lean Supply Chain
IN HIS KEYNOTE SPEECH, JOHN MANNERS-BELL spoke of theharsh realities of doing business in China, then followedup with a positive outlook and a few tips on how shipperscan navigate the murky waters of foreign trade. Manners-Bell, CEO of Transport Intelligence Ltd., a U.K.-basedmarket research firm, gave attendees an up-close look atthe intricacies of moving freight into, out of, and aroundChina.
“Some major issues have been glossed over as themedia focuses on the opportunities,” said Manners-Bell.“I’m here to give shippers a reality check.”
On his list of major logistics challenges, Manners-Bell
cited issues such as government regulations (particularlythose that control foreign access to China’s market), ahigh level of bureaucracy, insufficient transportation net-works, and a lack of distribution facilities.
Also hampering logistics and transportation in China isa lack of training at both thepractical (IT, warehouse oper-ations, etc.) and strategic(business management) levels. To overcome this shortfall,Manners-Bell said, companies such as DHL are establish-ing their own in-country training programs in majorcities like Shanghai. “DHL is spending about 3 to 4 per-
Logistics Keynote
China: 10 Things You Need to Know
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RAISING THE BAR ON SUPPLY CHAIN EXECUTION.
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www.scmr.com/gscc January 2006 • Global Supply Chain Conference G39
REAL-TIME MANAGEMENT HAS BECOME a popular conceptin supply chain circles, where the one who can accessaccurate data the fastest holds the competitive advantage.In his keynote speech, Dr. Sandor Boyson of the RobertH. Smith School of Business at the University ofMaryland and author of In Real Time: Managing the NewSupply Chain, discussed the processing of real time infor-mation among all customers, distributors, suppliers, andmanufacturers in the supply chain.
Calling real-time operations “a new business model,”Boyson said the real-time supply chain is a result of high-ly streamlined physical, informational, and relationshipnetworks. By enabling such information to occur, compa-nies achieve a fluidity across the entire supply chain thatwasn’t possible with more traditional systems.
“It’s the apex of intensive, organizational investmentover many years,” explained Boyson, who pointed to a
coalition of tomato growers, led byDel Monte, as a prime example ofreal-time information in action. The“virtual” suppliers group comestogether to meet the demands of aWal-Mart distribution center and uti-lize a technical platform that allowsthe group to meet the retailer’s day-to-day requirements in a seamless fashion.
“This shows how the real-time model has penetratedeven America’s most traditional industries,” said Boyson,who added that in the case of the tomato growers, a cus-tomer order triggers multiple actions across the supplychain. “Rather than using a sequential, step-by-stepprocess, that single event prompts multiple actors in thesupply chain into action, thus compressing time, cuttingcosts, and improving performance,” he said.
Supply Chain Keynote
Succeeding in Real Time: The New Supply Chain Imperative
EACH YEAR, MODERN MATERIALS HANDLING MAGAZINE sur-veys its readers to find out about their operations and keyindustry trends. In this keynote speech, Editorial DirectorGary Forger and John Fontanella, senior vice president
and research director, supply chain services for AberdeenGroup, discussed those survey results and the overall stateof materials handling in manufacturing, warehousing,and distribution.
Materials Handling Keynote
The State of Materials Handling in Manufacturing,Warehousing, and Distribution
cent of its total revenue in China on education,” he said.Other challenges include a lack of IT standards, poor
systems integration and equipment, an unreliable energysupply, and high transportation costs that in some casesmay surpass rates in Japan, Europe, and North Americaby 50 percent.
Steps are being taken to alleviate these and other
problems that companies face in China, said Manners-Bell, who added that the country is “looking over itsshoulders” at competitors like Vietnam, knowing that itneeds to act soon or risk losing its economic steam.China recently joined the World Trade Organization and is implementing a five-year plan to improve itstransportation and logistics infrastructure, he noted.
Dr. Sandor Boyson
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LIKE IT OR NOT, TODAY’S COMPANIES are operatingin a global economy. The trend has put a newslate of challenges in front of shippers that arealready grappling with a capacity crunch andsoaring freight rates. In this GSCC session, RobertBernardini, a business consultant at SSA Global,discussed how companies that are moving fromthe domestic market into foreign territories canpiece together the complicated global logistics puzzle.
While not a cure-all for global logistics woes, technologycan serve as a vital link between U.S. companies and theiroverseas activities. According to Bernardini, shippers canuse IT to more effectively link transportation andimport/export processes. It also can help shippers ensuresupply chain security, process security, correct documenta-tion, accurate total landed costs, and inbound and out-bound visibility—“all in an effort to achieve completeglobal agility,” he said.
“Technology is helping fill the gaps with tools designedto simplify procurement, logistics, and compliance,” saidBernardini, who walked attendees through the steps nec-essary to ensure that their import and export information
is accurate, complete, and compliant withinternal and external standards. He sharedstories of his own experiences as a logisticsmanager, when his company once was finedby the Federal Aviation Administration (FAA)for improperly shipping hazardous materials.
“We found out that a sales office hadshipped a can that was under pressure, and
that exploded while in the air,” Bernardini recalled.“Turns out it wasn’t declared properly, and the responsi-bility came to bear on corporate to ensure everyone hadan understanding of the regulations.”
To avoid such situations, Bernardini recommended,shippers can turn to software programs and in-countrypartners (such as freight forwarders and third-party logis-tics providers)—two of the most important “tools” thatany company can have on hand.
“While software can’t totally demystify the globalprocess,” he said, “it can assist with the process of stream-lining global shipments and making them look likedomestic shipments while still ensuring that the appro-priate screening and documentation gets done.”
Conference Session
How Technology Can Demystify Global Logistics
More than 560 companies participated in the2005 survey. From them, the magazine learnedthat capacity utilization is on the rise, as is theneed for more warehouse space and materialshandling equipment and solutions. Sixty-fivepercent of respondents increased spending onthe latter in 2005 (down from 71 percent in2004), while 6 percent decreased spending (com-pared to 3 percent in 2004).
Fontanella said that limited access to capital may beputting a clamp on companies’ costs. “Companies arespending money, but they have to see almost immediatepayment and benefits from their investments,” he added.
The fact that the bulk of manufacturers and distribu-
tors are currently at 90 percent or higher capaci-ty can be attributed to overall economic healthand positive economic indicators. “This is areflection of signs of productivity that are due to consolidation of distribution channels, andthe fact that companies are rethinking theirmanufacturing networks,” he said.
According to the survey, top materials han-dling buys were lift trucks (66 percent); racks
and shelving (57 percent); totes, bins, and containers (42percent); dock equipment (41 percent); and packagingand pallets (40 percent). “This tells me that companies are trying to deal with growth,” Fontanella said. “That’s a positive sign.”
IN THIS COLLABORATIVE SESSION, MMH Editorial DirectorGary Forger; John Hill, principal and board member atESYNC; Jon Kuerschner, vice president of applications atHighJump Software; and Chris Utgaard, COO ofSportsman’s Warehouse, discussed how high-growthcompanies are working through the decision process for
selecting an ERP system or “best-of-breed” supply chain executionsoftware.
“It’s not a decision to be takenlightly,” said Forger. “The chal-lenge is to find the most suitable
solution that brings together processes, solutions, andpeople. In the end, it’s all about finding the best way tomanage inventory and its movement while watching outfor the best ROI.”
Hill noted that the process starts with determining if anexisting ERP can handle the task or if a best-of-breed(BoB) system would be a better choice. “This can beaccomplished through a thorough analysis of the func-tionality required to optimize your supply chain perform-ance,” he said.
Kuerschner said companies with less complex, lower-
January 2006 • Global Supply Chain Conference G43
Special SupplementSpecial Supplement
www.scmr.com/gscc
Conference Session
ERP vs. Best-of-Breed Software: How High-growth Companies Make Their Decisions
THIS SESSION, PRESENTED BY SSA GLOBAL business consult-ant Steve Vail, included a discussion of a topic of utmostpriority for most business and supply chain managers:freight visibility.
Vail built the case for improvingfreight visibility and supply chainsecurity because of the ongoing threatof terrorism. He also exposed visibili-ty as one of the key components of alean supply chain and an importantenabler of successful global trade.
With many of today’s shippers rely-ing on a patchwork of manual processes and computersystems throughout the cash-to-cash cycle, Vail said, frag-mented information, delays, and inefficiencies are com-mon. In fact, he said, 74 respondents to a recent survey
said that they continued to incur extra costs for expedit-ing shipments to make up for such shortcomings.
The first step to improved visibility, Vail said, requires ahard look at the communication taking place between acompany and its largest carriers. “Make sure you’re com-municating properly via EDI channels, the Web, or anoth-er channel,” he advised, “then scale it down the line to allof your carriers.”
Companies should also realize that information isbecoming as important—or, in some cases, more impor-tant—than the shipment itself. To shippers that may nothave a handle on visibility yet, Vail said, “you’re not toofar behind.”
“Start small and rack up some success using visibility,”Vail continued. “Keep expanding on those successes andgetting better, and you’ll see results down the line.”
CAPACITY SHORTAGES ARE ON ALL SHIPPERS’ MINDS these days.In this session, Richard Armstrong, chairman and CEO ofArmstrong and Associates Inc., and Jim Handoush, presi-dent of Landstar Logistics Inc., offered an overview of theconditions that are causing the capacity crisis and offeredsolutions for shippers.
Armstrong opened the session by reviewing the historyof the capacity shortage and the grim realities behind it.“The good news is that the capacity crunch isn’t going toget any worse,” said Armstrong. “The bad news is thatshort-term, it’s going to be at the same level as it was in2005.”
According to Armstrong, containerized ocean freightvolume was up 10 to 22 percent through September 2005,with ports inLong Beach, LosAngeles, NewYork, and NewJersey posting significant gains. Higher seasonal tradevolumes and the hurricanes both impacted capacity, saidArmstrong, who pointed to a lack of truck drivers andwarehouse space as other key drivers of this continuing
problem.Handoush
shared stories ofshippers who havefound waysaround capacityissues by relyingon their 3PL part-ners. One retailshipper that uses a“core carrier” concept, for example, recently integrated its3PL into that “core” mix (rather than just using the 3PLas a “safety net” when capacity gets tight) and has gainedflexibility as a result.
To get around the crunch, Handoush said, shippersshould think of carriers as an extension of their owncompanies (for example, by ensuring that trucks areturned around quickly at the dock). “Look at yourselfand how you’re doing business, how you’re treating vendors,” he explained. “Start to effect some change,knowing that long-term success requires the support of long-term vendors.”
Freelance writer Bridget McCrea is a contributing editor for Logistics Management magazine. She frequently writes about supplychain technologies.
Conference Session
How to Overcome the Capacity Shortage
volume facilities that have predictable business processesrequiring little or no materials handling would do bestwith an ERP solution. Those firms with more complexenvironments would gravitate toward a BoB solution.
Utgaard’s company recently upgraded to a BoB-typewarehouse management system and a leading ERP ven-dor’s product for its order management system. Afterimplementation, the company experienced a 50 percentincrease in picking efficiency, as evidenced by its ability toservice 50 percent more stores with a constant labor force.
Sportsman’s Warehouse now posts inventory accuracy of99.9 percent and improved order accuracy and fill rates.
When making the choice between ERP vs. BoB, Hillcautioned, companies should not seek “silver bullets,”because there is no such thing. “Establish a roadmap andallocate the time and resources necessary to do the jobright on the first pass,” he said. “Keep in mind thatalthough a WMS may well be where you begin, it’s not anendgame. Rather, it should serve as a cornerstone forenterprise-wide supply chain excellence.”
Richard ArmstongJim Handoush
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Landstar Global Logisticsdelivers the capacity thatdelivers the goods.
mmh.com MODERN MATERIALS HANDLING / J A N U A R Y 2 0 0 6 47
HIGH-SPEED ELECTRICCHAIN HOISTSThe ED single phase,electric chain hoistline now includes two,½-ton models: the sin-gle-speed ED1050Sand dual-speedED1050DS. CompactED hoists can be easi-ly installed and offerhigh lifting speeds.Thedual-speed modelincludes a low-speedadjustment capabilityfrom zero to 100% ofmaximum speed.Features include adouble braking system
for added protection, heavy-duty motor,friction clutch to prevent overwindingas well as corrosion-resistant, nickel-plated load chain.Harrington Hoists, 800-233-3010,www.harringtonhoists.com
MAGNETIC LIFTING FRAMES Custom designed for specific liftingapplications, STRONG-MAG liftingframes securely move metal sheets inplants.The lifting frames can be easilyattached to an overhead crane or aforklift and lowered onto the sheets tobe moved, avoiding operator contactwith sharp, metal sheet edges.The twodifferent models—overhead or"portable" forklift versions—can be
designed to handle sheets in widths offour, five or six feet and lengths rangingfrom eight to 12 feet. SimondsInternational, 800-343-1616,www.simondsinternational.com
EASY-TO-READ CRANE SCALEThe upgradedMSI-4300 Porta-Weigh Plus elec-tronic cranescale features arechargeable 12-volt, sealed leadacid battery andLED backlightdisplay.The bat-tery provides up
to 300 hours of operation betweencharges and the six-digit, 1.6-inch highalphanumeric liquid crystal display withLED backlighting is easily read from adistance. Digital calibration and self-diagnostic circuitry provide simplemaintenance. Measurement SystemsInternational, 800-874-4320,www.msiscales.com
PNEUMATIC CHAIN HOISTSLodestar Air XLair hoists havecapacities from 2to 7.5 tons andare metric-rated.Air pressure is90 psi and liftingspeeds rangefrom nine feet
per minute for the 7.5-ton capacity to31 feet per minute in the 2-ton capaci-ty model. Pendant controls provideprecise load spotting and precisionspool valves meter air for smoothstarts. Spark resistant models for haz-ardous environments include copper-plated hooks and lower-bottomblocks, stainless steel hook latches andplated load chain. CM IndustrialProducts, 800-888-0985,www.cmindustrial.com
INCREASED CONTACTOR LIFEWire rope hoists are available in capac-ities of three, five or 10 tons.Thehoists feature a heavy-duty design, highcycling motors and accurate position-ing with a 6:1, two-speed motor.Thehoists also offer increased contactor
life due to the low current switchingthat is controlled through an onboardmicroprocessor.Additional featuresinclude standard overload protection,upper and lower limit switches, brakewear monitoring and load spectrumrecording. Demag Cranes andComponents Corporation,440-248-2400, www.demag-us.com
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CEILING-MOUNTEDWORKSTATION BRIDGE CRANESCeiling-mounted workstation bridgecranes are ideal for facilities with limit-ed floor space.The systems provideinfinite coverage without interferingsupport columns.With crane interlock
sections, ceiling-mounted systems canbe linked to a monorail or anotherbridge crane.The ceiling-mounted sys-tems feature a low-profile steel trackthat allows for maximum use of ceilingspace. Standard systems are available incapacities from 250 to 4,000 poundsand up to 34-foot bridge lengths.Custom ceiling-mounted workstationbridge crane systems with telescopingbridges or cantilevered bridges areavailable for lifting loads outside theregular crane coverage area.SPANCO, 610-286-7200,www.spanco.com
VACUUM LIFTER FOR LARGE PARTSThe VPF-57 vacuum lifter features acustom lifting frame with two swivelingvacuum suction pads that can be
adjusted andlocked inplace.Availablewith capaci-ties up to4,000pounds, thislifter can besuppliedwith com-pressed air, 115-volt electric or bat-tery-powered vacuum stations.Eliminating the use of straps andhooks that can damage molded parts,the VPF-57 also features an ergonomichandle with fingertip controls that canbe fully integrated with any hoist.Anver Corporation, 800-654-3500,www.anver.com
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overhead handling
A Matthews International Company
...to make you money?
www.holjeron.com • 800-691-8302
Is your line smart enough
Simple • Smart • ReliableMicroroller® motor driven rollers and ZoneLink™ controls use distributed intelligence to power and control material handling systems. Combined, these technologies give you more reasonsto invest in smart solutions for your conveyor applications and enable you to decrease maintenance, improve safety and lower energy consumption. Contact us today to see how we can provide components for your conveying system that are simple, smart and reliable.
LOW-LEVEL ORDERPICKERSThe "P Series" of low-level order pickersis based on the P-Type chassis and isdesigned for picking orders from the firstand second levels in warehouse racking.Two base versions of the lift trucks areavailable, with the driver position fixed (for
picking at first level) or rising (for pickingat second and sometimes third levels).Both can be supplied with either low- orhigh-lift forks to suit the type of pickingregime adopted and the nature and vol-umes of the products to be picked. Atlet,Inc., 714-701-4949, www.atlet.com
CASTER SWIVEL LOCKPROVIDES EASY ACCESSA vertical swivel lock on heavy-duty cast-ers is mounted at a 90-degree angle tothe top plate providing much easier accessto the operator.The new design reducesthe amount of bending required by theoperator.The swivel lock provides finger-tip conversion of a swivel caster to a rigidcaster for straight line steering control.Hamilton Caster & Mfg. Co., 800-733-7655, www.hamiltoncaster.com
CONTAINERS HANDLE1,500 POUNDS ROPAK industry standard containers arebuilt on a 45-inch x 48-inch footprintand are available in two heights—25 and34 inches. Engineered to be lighter intare weight than standard footprint con-tainers, the containers offer capacities upto 1,500 pounds.This construction
makes them ideal for storage and trans-portation of a variety of lighter-volumecontents, including aluminum compo-nents, blow-molded bottles and vacuum-formed food trays. LINPAC MaterialsHandling, 888-209-7052,www.linpacmh.com
READ LINEAR AND 2-DBAR CODES The MAH200 universal bar code readerautomatically discriminates between allmajor 2-D matrix and linear bar code sym-bologies.The readers incorporate a dual-path, optical system, a 1.3 million pixelCMOS sensor and a 400 MHz processor.Their reading system supports high-densitymatrix codes and larger low-density linearcodes and high-speed omni-directionaldecoding.The bar code readers are avail-able in handheld, gun handle and presenta-tion-stand form with cabled, batch andcordless versions. Pepperl+Fuchs, 330-486-0001, www.am.pepperl-fuchs.com
CABINETS WITH 100DRAWERSIZESA multi-drawercabinet featuresa full-widthergonomic han-dle, a choice of100 drawersizes, 12 colorsand differentdrawer banks.A variety of drawer acces-sories such as partitions, dividers andplastic bins are also available.The cabi-net, which can be moved by a forklift orpallet jack, is also offered in a mobileversion. Rousseau Metal Inc., 800-463-4271, www.rousseaumetal.com
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Selectrak®, which comes in 4 widths, is a custom carton flowthat installs in your existing rack system without tools andwithout the custom price. You can count on us for the mostcompetitive prices and for the best delivery in the industry!
• Easy installation, featuring heavy-duty drop-in design• Provides total carton support and consistent flow • Presents product for easy picking of split and full case
INTERNAL BACKLIT CONVEYORThe AccuVision internal backlit conveyor is designed to providemore accurate visual inspection procedures for a range of indus-tries.The conveyor's internal lighting system projects a strong,uniform light field through the translucent belt on the low pro-file conveyor-illuminating part profile and appearance for auto-matic or manual inspection capabilities.The internal light sourceis rated for 16,000 hours. Conveyor Technologies Ltd.,513-248-0663, www.conveyortechltd.com
LOW-VOLUME PALLETIZERThe NO-LIFT semi-auto-matic palletizer is designedto reduce worker fatigueand eliminate potentialinjury from lifting andstacking boxes onto ship-ping pallets. Boxes comefrom an in-feed conveyorand are easily positioned onthe ball transfer table form-ing a layer. Once a layer isfull, the operator simply pushes a button and the NO-LIFTstacks the boxes and lowers the pallet for the next layer. Fullpallets are removed with a lift truck and replaced with anempty pallet.The NO-LIFT raises the pallet to the correctheight to begin again.A scissor-lift transfer table and all con-trols are included. Powell Systems, Inc., 765-884-0613,www.powellsystems.com
HYDRAULIC TROUGH DUMPERQuick discharge of materials into elevated hoppers or pro-cessing equipment is possible with a hydraulic trough dumper.Features include a 60-degree discharge angle for non-freeflowing materials, a 304 stainless steel bucket with polishedwelds, a 2,000-pound lifting capacity and washdown construc-tion for wet environments. Material Transfer & StorageInc., 269-673-2125, www.materialtransfer.com
CONVEYOR SYSTEM OFFERS SAFETYFEATURESA conveyor system features "safety-yellow" belting with electrostaticdischarge properties and an engi-neered modular frame.The convey-ors also offer a non-tensioning drivesystem that guides moving parts.Safety snap-link belting protectsoperators from injury by acting like a fuse to separate duringoverload or jams.These conveyors are shipped fully assembledand include a quiet variable speed, direct-drive brushless DCmotor that can carry loads up to 200 pounds. SmartMoveConveyor, 800-581-2876, www.4smartmove.com
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If your supply chain is giving you aches and pains, Mericle Logistics will make it better. Located along the I-81 Corridor, Mericle Logistics offers public and contract warehousing, transportation, and a full range of value-added services. Look to Mericle Logistics for YOUR strategic supply solution.
Supply Chain Rx
Responsive • Reliable • Ready
Call Rudi Biscontini at570.823.1100 for more information.www.mericle.com/logistics
Products for SaleCareer Opportunities
Fleet Site ManagerTake your career to new heights! Toyota, the number one brand name in forklifts, is currently seeking a Fleet Site Manager at the NUMMI facility in Fremont, CA. You will oversee the TMHU Fleet Operations, ensuring deliv-ery of contractual responsibilities, and maintaining positive relationships with both NUMMI management and TMHNC personnel. This position will also be responsible for providing recommenda-tions for cost savings and equipment replacement decisions, facilitating best practices to improve fl eet operations, reviewing budget variances, and coor-dinating equipment and services pur-chase orders with NUMMI purchasing. Bachelor degree preferred. Individuals with extensive knowledge of repair and maintenance of lift trucks, and, experience with managing a material handling fl eet will be seriously consid-ered. Budget process experience pre-ferred. Excellent communication and customer relations experience a must. Email resume & salary history to [email protected].
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We have chosen supply chain manage-ment for repositioning our MBA programfor a number of reasons.
We believe that SCM has had a trans-formative effect on many industries in thelast few decades and will continue to playan important role in creating value forcompanies such as Bose, Raytheon andTyco.These companies and others suchas UPS, Federal Express and Maersk haverecruited our students and sent execu-tives to visit our classes.
Under professor Bob Lieb’s leader-
ship, Northeastern has been offering alogistics/supply chain management under-graduate program for 35 years and agraduate certificate for more than adecade.Although our SCM programshave been small, demand for our co-opstudents and our graduates has alwaysbeen strong.We expect now that it willonly be stronger.
The new MBA program defines thecompanies that hire our graduates as the“customer” and our students as “part-ners” in the educational process.We
believe that by working with corporatepartners, we can create graduates whomake an immediate contribution in thesupply chain realm.
SCM is a natural career path forNortheastern; we have a strong facultywho understand the industry and whoare frequent contributors to both aca-demic and industry journals. Northeast-ern University’s 100-year history in coop-erative education has provided us with anatural affinity for working with corpora-tions to solve business challenges.
Thomas Moore on why Northeastern’s MBA program is newly focused on supply chain management.
Thomas MooreCOMPANY: NortheasternUniversityLOCATION: Boston, Mass.TITLE: Dean of the College ofBusiness AdministrationTOTAL ENROLLMENT: 4,000grads and undergrads in Collegeof Business AdministrationEXPERIENCE IN ACADEMIA: 30years in education administration
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one-on-one interview
60seconds with...
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*Downhill Assist Control standard on 4WD models, not available on 2WD.
The same technology that helps the Toyota 4Runner negotiate a steep descent* also helps operators of our three-wheel electric lift truck maintaincontrol on loading dock ramps. It’s yet another reflection of our commitment to your safety and productivity. 1-800-226-0009 www.toyotaforklift.com
They may not look alike, but they’re closely related.
