Archive for July, 2010

Find your hidden systems

You wouldn’t think there’d be much passion associated with a topic like lift trucks, but that seems to be the one that generates the most response when we say something that hits a nerve. I guess that’s what I did when I wrote recently that lift trucks and racks are every bit as much a system as an AS/RS is.


Michael Yacks agrees. As owner of Reachable Solutions, LLC, which specializes in lift truck attachments, he’s responsible for helping customers systemize their lift trucks to their particular material handling environment. The biggest problems he sees happen when companies get locked into that environment. This creates an enclosure that limits their vision.


He told me of his experience in the food and grocery industry. Before Reachable Solutions Mike spent 25 years selling narrow aisle and very narrow aisle lift trucks. The mindset he encountered in food and grocery had to do with the basics of slotting and picking. One of the tenets of that mindset states: “Use pallet trucks to pick fast-moving items from floor slots.” That worked in the old days when the number of SKUs entering the distribution center was manageable. But in recent years marketers became students of demographics and market niches were created.


From these niches burst forth wave after wave of new products, from energy drinks for those who jog to diet foods for those who don’t. The varieties in those categories alone are enough to fill a couple warehouses. Of course, most grocers handle many more than those categories, so dedicating floor slots to the fast movers started becoming a problem. They’re ALL fast movers!


Many grocers have sought solutions in off-site storage, finding new locations or by automating. But Yacks believes if these grocers had done a little better planning and been more systematic with their existing material handling equipment, they might have found a solution closer to home.


“Had they planned for expansion, they could have simply implemented low-level order pickers which are similar to standard pallet trucks but, also have the ability to lift the operator slightly over three feet,” he told me. “This allows quick and easy access to pick slots as high as 10 feet. These types of trucks were common in Europe way back in the early ’90’s but are still just beginning to catch on in our market.”


The material handling market is filling with an array of new products almost as vast as the variety of products they handle. Why not try to understand your own demographic as well as the marketers in this industry do? You might find systems you didn’t know existed.

Logistics gives material handling a makeover

You know how the Twilight saga has transformed vampires in women’s eyes from evil monsters to attractive, desirable alternatives to us male, mortal mutts? I think the current economic situation is giving warehousing the same kind of image makeover. Where storage was once a necessary evil, now, with consumer demand coming back, many retailers are wishing they’d have had the foresight to stock up on the supplies customers are starting to demand.


Now the New York Times and Wall Street Journal are reporting that retailers are fighting for freight, outbidding each other to get space on ships. At the same time, expedited freight companies like FedEx are winning big with their international priority services that guarantee delivery by a certain date.


The heroes on the retail side are those material handling and logistics pros who anticipated the return of demand and started scheduling shipments and preparing their distribution centers months in advance. These people who were once invisible to the national business media are now their darlings, and are being courted for quotes. That case I just mentioned of the retailer with the foresight to get their warehouse in order was presented in a New York Times story.


The material handling industry is getting smart about accommodating the other 80 percent of supply chain managers who didn’t anticipate the speed of their customers’ return. For example, I just interviewed Mike Kotecki, senior vice president at HK Systems, for an ROI story MHM will be doing in September. He told me the economy has taught many companies to maintain a cash rich and liquid position rather than get bogged down with a lot of assets on their books. This is important as they face consolidation or divestitures, where they don’t want a lot of long term debt. Koteck told me this has been a big opportunity for his company.


A couple of their clients have been taking advantage of HK Logistics, where HK –owns and operate facilities for them and provides their supply chain as a service. This gives the client the benefits and ROI of warehouse automation without having to pay for the automation in one lump sum.


This kind of thing may give the material handling industry an image makeover too. Kotecki says clients are starting to look at automation’s ROI in a new light.


“I’m hearing customers more creatively and more open mindedly approaching ROI and looking for things that are traditionally a little softer, like product damage and employee satisfaction, sales value, depreciation, flexibility, growth potential, visibility—things that are a little less easy to quantify. They hope to come out of this recession with a more technological solution than just hiring five forklift guys back.”


I don’t think those forklift guys need to worry, though. The industrial truck industry is getting an image makeover too. Of course MHM will continue to stay on top of that, but don’t be surprised if our brethren in the business papers start stalking you for stories.

A material handling manager’s multiple personalities

As our economy advances out of recession, there are some things that will never be as they were. Material handling managers, for example, are not just responsible for material handling any more, but for many aspects of logistics—including transportation and distribution. Their facilities have multiple personalities as well. I encountered examples of both these phenomena at one site recently when I talked to Brent Beabout. He does material handling engineering and distribution center design for Office Depot, but his official title explains what I’m talking about: he’s vice president of global network strategy and transportation.


His latest project for Office Depot required all of his logistics skills. It’s a new fulfillment center in Newville, PA, that will service the chain’s North American Retail stores as well as its Business Solutions Division customers. This combination facility represents the largest greenfield implementation of Kiva’s “mobile fulfillment system,” comprised of inventory pods that are picked up and moved by a fleet of mobile robotic drive units. This “pod” system of storing and moving pallets, cases, and orders throughout a facility is another example of the kind of flexibility required of both material handling professionals and their tools.


This 600,000 square-foot operation will serve as a hub for Office Depot’s Northeast U.S. region, supporting Office Depot’s business to business customers as well as more than 100 store locations in the region. The Newville warehouse also houses a regional print facility. Beabout says this new combination approach will allow Office Depot to support its growing business, optimize total supply chain expenses and use inventory more efficiently.


The facility represents the integration of three (and soon four) other Office Depot distribution centers. And, as with any new concept, there’s a learning curve associated with it. The operation houses 250 brand new employees and a new management staff that’s not used to operating completely automated facilities. Most of them come from batch environments. This new environment will teach them the ins and outs of continuous flow—in other words, material handling logistics.


This isn’t just a title, but a way of business life that eliminates waste and applies just the right resources to whatever the demand signal is at any one time. It requires someone with a holistic end-to-end view of their supply chain, all the way to the end customer. Beabout believes this requirement will draw talent from other disciplines to the new world of material handling logistics.


“They’ll come from IT, data analytics, finance, the physical sciences,” he told me, “because there’s a lot of low hanging fruit in this field. There’s a lot of money in supply chain, especially in inventory in the retail business. A few percentage point gains in efficiency go right to the bottom line. That’s why a lot of CFOs are now becoming very interested in the supply chain, where before they couldn’t even spell it.”


Talent goes where the money goes. And because manufacturing isn’t what it used to be in the U.S., the supply chain is becoming the new differentiator among companies—just as the multi-talented Brent Beabout is making a difference for Office Depot.

Think “system” when thinking “lift truck”

How you think of a lift truck can determine the success or failure of other material handling technologies you apply in your plant or distribution center. If a lift truck is just a lift truck and a rack is just a rack, you may be in for trouble. You may purchase both of these material handling elements at different times, but their ultimate return on your investment depends on a constant “system” mindset.


Your lift trucks and rack are just as much a system as an automated storage and retrieval system. I hate to get all academic on you, but let’s look at the definition of “system”:


“A group of interacting, interrelated, or interdependent elements forming a complex whole.”


One of the biggest mistakes buyers make when purchasing a lift truck is thinking only of their history with that equipment when matching it to their current needs. But what happens when you move to a new facility and after taking delivery of the new lift trucks you ordered for that event, productivity tanks? It might be because you failed to match the new lift truck’s specs to those of your new facility—or at least to those of your new rack. Duncan Murphy, president of Riekes Equipment Company, a Yale dealer based in Omaha, Nebraska, says that even in this technology-savvy age, a simple mismatch of lift truck to rack opening still occurs.


“In drive-in rack applications, openings are quite often made too small or without considering the truck requirements,” he told me. “Just because something worked in another facility, decisions are made to replicate, but at the same time with another level in height or with slightly heavier product. Either change can require a wider wheel base for capacity/stability. When the truck wheel base width is changed from the preferred 6 inches, 3 on each side, and shrinks to 2 overall, the productivity is gone and rack/product damage goes way up.”


Let’s go from academic to philosophical. Life’s a system, and similar mismatches happen all the time to all of us. Why do you think the divorce rate is almost 50%? Keep that in mind the next time you’re looking at lift trucks or racks—or employees, for that matter.

Taking the pain out of pallets

Pallets don’t normally cost an arm and a leg, but they can cost a few fingers, or at least a sore back, especially pallets that weigh 65 pounds. At companies built around building such pallets, incidents like this often become considered normal occupational hazards. Even companies that build safety into their culture may find it hard to go a year without someone getting hurt.


That’s why a company in this industry that goes four is worth noting. The 52 team members working at Millwood, Inc.’s pallet plant in Hamilton, Ohio recently celebrated the passing of 1064 accident free days. Frank Hyatt, human resources manager and chaplain at the plant, remembers the date of that plant’s last OSHA reportable accident: February 9, 2006. It involved an operator getting his hand “jammed” on a band saw. No fingers lost, but it was enough of a wake-up call to start paying more attention to accidents like that as well as nail gun ricochet and even back injuries. In fact just installing lift tables has reduced back injuries considerably for Milwood, Hyatt says.


“Seventy-five percent of injuries happen within the first 90 days, and some within 30,” he told me. “We pay by the piece, and some workers aren’t used to throwing a pallet around. That’s why we have a 21 day training program. We don’t force anyone out there until they’re ready.”


Hyatt is proud of the results. With only two safety people working for him and having responsibility for 24 facilities around the country, seven of those plants have gone more than a year without an accident. The Nashville and Pittsburgh facilities have gone two. Milwaukee has gone three. Hyatt believes this is because Milwood has made safety an important part of taking care of its team members. It also holds them accountable. Enforcing safety rules is an important part of every manager’s daily routines.


“It’s better that we spend time retraining and even disciplining a team member than to spend time in the hospital because of an avoidable accident,” says Antonio Delgado, manager of the Hamilton, OH plant.


But when an accident does happen, Hyatt’s role as chaplain comes in handy. Workers and their families appreciate the company’s policy of allowing Hyatt to travel to locations where team members end up in the hospital. The 1200 people company-wide for whom he is responsible see him as an extension of the company.


“When team members around the country see that management cares about them, that makes them want to adhere to our standard operating procedures and not cut corners,” Hyatt concludes. “Anybody can say things in front of a bunch of people and act spiritual, but when somebody’s on second shift in another city and you go into their living room behind the scenes, word gets out that the owners of this company are for real.”

Get employees to stick with material handling

I have a candidate for the annoying buzzword of the moment: sticky. I’ve heard this word a lot lately as we media types try to find ways to keep you audience types stuck to our websites.


“How can we make our site “sticky?,” our marketing people keep asking. Sounds disgusting. Like we’re trying to trap mice.


As much as I think sticky stinks when used in this context, it stuck in my mind as I was talking to Alan Will about the need for better training for the material handling workforce. Al is a retired Marine Colonel who hopes to recruit a new generation of warehousing professionals for active duty in warehouses and distribution centers across the country. He’s starting in Suffolk, VA, with Paul D. Camp Community College. He’s applying the logistics expertise he developed in the Marines to help this school develop a vocational training program devoted to warehousing. This school happens to be near a growing logistics hub, and he wants to be sure the region develops a quality workforce that knows its way around lift trucks and conveyors.


That’s right, he wants this region to be “sticky” for logistics talent.


That talent needs to be developed, though, because kids aren’t drawn to the honey that is warehousing and distribution. Will says community colleges around the country need to develop warehouse training laboratories that have the equipment needed to train tomorrow’s talent. He says it’s worth the effort, just to convince companies of the value of having access to trained warehousing and distribution talent. The problem is, most companies rely on internal training.


“If we could deliver potential employees possessing both sound personal skills and warehouse technical skills, the industry would save money and be more efficient,” Will explains.


How?


• Training at the community college level can be considered a form of employment pre-screening.

• Pre-trained employees are more efficient and generally have a better understanding of their role in the supply chain.

• Although there is company “cultural” training upon hire, a pre-trained employee will get up to speed more quickly in production.

• People trained in warehousing and distribution jobs at the Community College level are stronger candidates for higher level logistics openings later on.


That’s what having a trained logistics workforce means to employers, but what does it mean to industry in general?


That’s what the Material Handling Industry of America (MHIA) and the College-Industry Council on Material Handling Education (CICMHE) are trying to determine. They have funded a research project titled “State of the Distribution Workforce and What It Means for the Material Handling Industry.” MHIA and CICMHE awarded Brian Edwards of Oklahoma State University and Kevin Gue of Auburn University $53,086 for this project.


This research will take a methodical approach. First it will examine factors affecting worker turnover, satisfaction, commitment, and performance. Then it will look at how the adoption of new technology is influenced by the training to use it.


“Historically, only technological solutions were applied to labor shortages and demographic shifts,” read an announcement by the MHIA. “Organizational behavior research demonstrates that there are other key variables and potential interventions that could help attract and retain qualified employees with benefits for the bottom line.”


That’s a fancy way of saying they want to make material handling sticky, just as Al Will does. If you’d like to help, either by donating equipment or your time to a local community college program, contact Al Will at abjbwill@yahoo.com. For more information about MHIA’s research, contact Mike Ogle, MHIA Vice President of Educational and Technical Services and Managing Director of CICMHE, at mogle@mhia.org.

Crown finds safety offers many rewards

Some companies build safety in a series of steps.


First they look for different ways to improve safety.

Then they start training managers on those improvements.

Then that training spreads to key employees at various plant locations.

Finally, all employees end up helping each other work safely.


That’s how Crown Equipment Corporation started improving its safety numbers year after year once committing to its SafeSteps program in 2005. It’s also why this lift truck manufacturer recently received the Occupational Excellence Achievement Award from the National Safety Council. More specifically, Crown was recognized for coming in at 50% below the industry average for workplace injuries in the last three years. A lot of that has to do with the positive reinforcement fellow employees give each other.


“They’re looking for the things on the floor that people are doing right with regard to safety,” says Brian Duffy, Crown’s environment and safety manager. “We promote feedback between the employees, saying ‘Great job, you sounded your horn as you approached the intersection.’ It fosters communication between the employees with regard to safety.”


It also fosters innovation. Management doesn’t want accidents to spur ideas. It encourages employees to write their ideas down on cards. These ideas are evaluated by the SafeSteps team. Here are a few of the ideas that were implemented:


Employees once had to go up and down stairs to retrieve parts from the second level of a mezzanine. Carrying these parts down the stairs in boxes, these employees couldn’t see the stairs as they descended. The big idea: Build a dumbwaiter to hoist the parts between the two floors.


Welders often handled 75-pound spools of wire in loading their machines. The big idea: purchase this wire on smaller spools. Not only were the 40-pound spools easier to handle, but it was less expensive to purchase them that way.


Employees were getting zapped by static electricity from their hoists. The big idea: examine the building’s grounding system. Turns out the ground was intermittent due to a short. No more shocks.


SafeSteps isn’t tied to an incentive program, says Duffy. However, Crown is finding that personal recognition from a supervisor or a VP is not only rewarding, it is cementing relationships between employees and managers.

About

Join MH&L’s editors as they examine and discuss current and future trends in material handling. Whether it’s a look at the latest in warehousing technology, a thoughtful analysis of pending government legislation, or a humorous take on management snafus, the Read, React & Respond Blog is a free-spirited, open conversation between MH&L staff and the material handling community.

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