After walking the Pack-Expo show in Vegas for three days, I kind of felt sorry for some of the equipment on display. It might have been fatigue setting in, but consider: this is the most attention stretch wrappers, pallets and reusable plastic containers will get all year. Once this equipment gets purchased and put to work, its contribution to supply chain integrity is often forgotten.

Maybe my empathy for the exhibits was more fatigue than feelings, but Pat Lancaster, chairman of Lantech, manufacturer of stretch wrapping systems, confirmed for me that the kind of solutions his company sells are often misunderstood. His conclusion is based on his own eye-witness accounts. He told me he has spent half of his time lately in customer plants. What he noticed is that film breakage and its consequences happen more than people realize. He said as his company’s products got better over time he would have expected wrapped loads to get better. As the old song goes, it ain’t necessarily so.

Shippers tend to focus on products, labeling and packaging when making process improvements in their operations. Once those elements are combined into a unit load they go through a wall into another, darker space and the knowledge of that load gets dimmer too. Things like carton specs and when those loads go out of spec are forgotten, if they were ever known.

That’s a shame when you consider how proud of their products manufacturers can be. The stretch wrap that was designed to protect those products during shipment is a “second class citizen” in Lancaster’s words.

“Labor reduction has caused owners of the process to have many competing tasks and stretch wrap isn’t seen as important to quality,” he told me. “Meanwhile there’s still a push to reduce packaging and therefore reduce costs.”

So what do many manufacturers do to make up for the lost protective properties of the reduced secondary packaging? Add more stretch wrap to the load. Unfortunately, that causes more damage, not less, according to Lancaster.

“Precision is what matters where stretch wrap is concerned,” he said.

He also told me that when stretch film was identified by manufacturers as a packaging problem the focus was on film breakage. But Lancaster says the new focus should be on just plain “good loads”—those that ship well and keep products in “as-made” condition.

“It’s about the right amount of containment force, not just pre-stretch,” he told me. “There needs to be more recognition of bad loads.”

For example, if a palletized load set next to another stretch wrapped load shifts and hits its neighbor, that can cause film abrasion and weaken the film’s effectiveness. If that damage goes unnoticed on the dock and the pallets are loaded onto a truck, any further forces during transportation can continue the chain of events that started with the initial film damage.

Once the products are delivered, any damage is usually blamed on the carrier or the transportation process, Lancaster said. The manufacturer who built the bad load may never find out about it or learn from their mistakes.

“At the same time, damage is expected during transportation, so not much attention is paid to it,” Lancaster added. “Therefore bad loads keep going through.”

Another common mistake he sees that has become one of the chief characteristics of a bad load is when the stretch film covers the pallet entry holes so when forks break the film, its integrity is severely compromised.

As Lancaster demonstrated during Pack Expo, new pallet wrap systems can measure the amount of film wrap force that’s applied to a load, whether too much or too little, according to pre-set standards for the product.

The message he wanted to leave with every supply chain manager who visited his exhibit—whether they be responsible for shipping or receiving unitized products—is that when you notice product damage, look at upstream equipment, not just what happens in a trailer. Damage is a chain too, and it often starts with the shipper’s unitizing process.

Upon entering the Las Vegas Convention Center to cover Pack Expo this week, it didn’t take long for me to hear about games of chance. Most of these games involve the chances chief technology officers play when putting their money on technology, hoping it wins their companies big paydays.

Certainly it’s easy to see how they can be impressed by all the latest material handling and packaging automation on the show floor. The chance comes when betting on whether the technology will translate from the show floor to their plant floor.

Several of the technology vendors and packaging specialists I spoke with at this event explained that technology is a safer bet if considered in a supply chain context. That means not just upstream and downstream, but within one’s own enterprise, as well.

Robotics

One display I saw on the show floor was as mesmerizing as the glitziest animated one-armed bandit at any of the casinos. It was an IRB 4600 6-axis articulated robot from ABB. It was Joe Campbell’s job to snap visitors out of their stupor (whether technology induced or simply the after-effects of a night on the strip) and give them a glimpse of this technology’s role in the real world. Campbell is VP of ABB’s Robot Products Group and he told me how picking applications for robots first developed in the food industry, where labor availability problems combined with contamination concerns to make robots a more viable solution. Even where labor is available, people don’t often stay long in these jobs, and that makes the cost of technology seem more competitive with the cost of hiring and training replacements—not to mention the lost-time costs of repetitive motion injuries.

While watching ABB’s palletizing robots, Campbell explained that his company’s new focus is taking costs out of commissioning this equipment—in other words, pre-engineering it to take engineering hours out of a project. These projects are evolving from robots working with standardized grocery pallets to assembling grocery store displays using smaller customized pallets. This is now a job for that six-axis industrial robot I told you about, and Campbell says it can make better use of the vertical space and therefore the cubic feet available in today’s DCs.

So, robots are becoming pre-engineered, packaged solutions and they’re moving from arc welding centers to packaging stations where engineering manpower is limited.

Mobile Computing

Does that mean robots and other technologies shown at Pack Expo are ready to be picked off the show floor and plugged in, ready for action in any environment? That’s a losing bet. Winners are the ones who consider all the angles, and in the supply chain game, that means up and down the supply chain. Just as robots assembling pallet loads in a DC must be engineered to accommodate the grocery store environment, mobile computing devices must be configured to make best use of a company’s human labor up and down the chain.

Bruce Stubbs, director of industry marketing for Intermec, told me his company relies on the wisdom of a customer advisory council made up of visionaries in Intermec’s target market segments. These experts are brought together periodically for couple-day meetings, both to offer a sanity check on Intermec’s R&D direction for data capture and to offer their own advice. Keep in mind, these are VPs of logistics, CTOs and CIOs who have five- to seven-year strategies of their own with marching orders to drive costs out of their operations.

“They want more multi-purpose devices, so that’s why we have a new 70 series of mobile computers which can do near/far scanning with one scanning engine, as well as image capture,” Stubbs told me. “When their workforce is on the floor they can be more mobile and agile—pairing a mobile computer with a mobile printer. One of the CIOs in our customer advisory council tasked us to continue looking for more intuitive user interfaces and to get away from human/machine interfaces requiring key punching.”

That’s especially important as retail customers enter their peak holiday season, and they can use mobile printers and computers to set up mobile packing stations without worrying about a wired infrastructure. Even some of Intermec’s vaunted advisory council members have yet to get up to speed on these capabilities, said Alex Babic, Intermec’s manager of industrial printer products.

“One of the people in our advisory council said he’d like to configure our smart printers with his smart phone,” Babic explained. “We told him he can do that now. Every printer we ship has a web page on it and you can browse to the printer and see the basic settings. Within enterprise accounts where companies are investing more in enterprise systems, connectivity and device management is becoming more important.”

Funny thing is, if that advisory council member had talked to one of the workers on his own shop floor, they might have schooled him on what can be done with intelligent mobile devices. It’s a trend with real supply chain value. Another CIO Babic told me about is a bit more up to speed on making this technology play. He was from a German company that knew everything about handhelds, network systems and how to program every printer. He knew all this because he constantly interacted with his company’s vendors, customers and internal users.

Returnable Packaging and Containers

In a glitzy environment like the Pack Expo display floor, it’s easy to let device connectivity overshadow the importance of people connectivity. Luckily for the technology gamblers walking that floor there were off-the-floor forums to help them put what they saw in the proper context.

During a couple sessions on returnable and reusable packaging, that supply chain message came through loud and clear. Bob Klimko, director of marketing for Orbis and education and technology Chair for the Reusable Packaging Association, said reusable packaging can be used to change a company’s supply chain culture.

“There are all sorts of people impacted along the way, inside and outside your organization, including suppliers and customers,” he said. “With reusables your transportation spend may go up because there’s a reverse flow you have to account for. You need a holistic view of all stakeholders and their metrics and their systems. Consider objectives not only for your business but for each partner you’re aligning with. If you don’t consider benefits for suppliers and customers there will be problems. Alignment of objectives within the extended supply chain is very important.”

Gerry Vetter, director of supply chain and procurement for Coca Cola Consolitaded, BYB Brands, Inc., put this in the context of those plastic beverage shells used to carry bottles of soda from the DC through the store receiving dock and out into the store for front-of-aisle displays.

“There is a cost for bringing those shells back and you have to know that and understand it from the very beginning,” he said. “There needs to be alignment in shell strategies; that means more commonality and going all the way back in the supply chain to the bottle design and understanding the cargo footprint. Sustainability is important to many of our largest customers like Walmart and we have to account to them where we’ve reduced waste in our systems.”

I’ll end this report with a fun little encounter I had with one of the audience members after the reusable packaging presentations. His named is Vince Allora, who patented an idea for a plastic beverage bottle that can double as an elegant long-stemmed beverage glass when it is inverted. You see, the base of the bottle unscrews to become the base of the glass when the neck of the inverted bottle is inserted into it. The open base of the bottle now becomes the rim of the glass from which you sip the beverage. You can see this at www.flipbottle.com.

Vince wanted to get Coke’s attention and he thought Mr. Vetter might open a doorway for him.

After Vince made his pitch and left his card with Vetter, I had to corner Gerry and find out what he thought about this innovation—especially in light of the supply chain sensitivities I kept hearing about all day. Here’s what he said:

“What you have to determine with this kind of thing is whether it’s a seasonal premium or special event type of thing or an ongoing sustainable package. If you look at it as an ongoing sustainable package, the way we’re set up today it would require a whole new set of shells. We’d have to determine how it would fit into how we operate our systems. We’d have to go out to the supply chain and determine where and how we’d merchandise it—would it require new merchandising racks and how would it fit on the racks of a major grocery store?”

These are questions Vince Allora will have to answer if his inventive brainstorm is to be supply-chain validated. For his sake, I hope what happened for him in Vegas doesn’t stay in Vegas.

Nearshoring has become a popular trend (perhaps more popular as a concept than an actual practice) for companies looking to gain more control over their extended supply chains by bringing work that had been offshored to Asia back closer to home. One small Midwest-based manufacturer of precision metal stampings, Chirch Global Manufacturing, has adopted a strategy that it describes as onshoring/offshoring –maintaining a presence in China while keeping jobs in its native Illinois backyard. This strategy has been made possible thanks to Chirch’s adoption of cloud computing.

Cloud computing is the latest trend in software solutions, even though it’s not necessarily all that new. It’s just become a lot more common, especially as the mainstream has made Internet-based repositories of software applications so ubiquitous and so easy for users to share the same app. Google, for instance, has made its software packages available via the cloud for years. Similarly, anybody who has uploaded or shared a video on Youtube or a photo on Shutterfly has experienced the power of cloud computing.

Evangelizing its applicability in business apps, particularly supply chain apps, has taken a bit more persuading, but Christine Hansen, product marketing manager at Epicor Software Corp., makes a compelling case. Speaking at the Design & Manufacturing Midwest trade show in Chicago this week, Hansen referenced a study by analyst firm IDC that predicts cloud computing to become a $9.5 billion market by 2015.

In fact, in an MH&L article earlier this year, IDC analyst Simon Ellis predicted, “We expect 2011 to find an increasing number of manufacturers exploring how they can use cloud computing to address technology gaps, most often for communication but also for collaboration. Business relationships in the value chain can be increasingly supported online, using a social business framework for support with the intersection of Web 2.0, Enterprise 2.0, and collaboration platforms and applications.” So clearly, cloud computing is gaining more adherents every day.

Hansen likens the differences between traditional server-based computing and cloud computing to buying vs. renting a house. When you rent, you don’t have to pay a hefty down payment up front, nor do you have to know anything about maintenance. Adopting cloud-based applications on a software-as-as-service model is very much like paying a monthly utility bill, she says.

So a company like Chirch, for instance, can leverage the inventory management capabilities of Epicor’s software to manage and monitor its operations both domestically and overseas, in a shared environment. The software, for instance, helped Chirch identify instances when its suppliers were shipping too much product, leading to excess inventory. That led Chirch to institute a policy where it would only accept less than 10 percent overage.

According to an Epicor case study, “improved information access has empowered Chirch’s employees, giving them more confidence in their decision making. From monitors across the shop floor, they can view all the following: open sales orders, due dates, quantities, finished and on-hand inventory, and ship location. They can also view material purchase orders, so if the required material is not on hand, they can see when it is due to arrive. If the material for a specific job is not arriving for another day or two, the shop can move to the next job in line so a machine doesn’t stand idle for days.”

While cloud-based applications are certainly not appropriate in all situations (there are obvious competitive advantages to having robust, customized solutions), the speed with which companies can deploy solutions, even across borders and continents as Chirch is doing, will help ensure we’ll continue to hear more about this buzzword trend. Though the terms sound vaguely alike, cloud computing is most assuredly not vaporware.

On this third report of takeaways from the Dematic Customer Conference in Park City, Utah, I’ve saved the best for last. Today’s conference was highlighted by its kickoff general session hosted by Todd Buchholz, former White House economic advisor who is now both an economist an author. So who do you think is this American economist’s hero in business? Does the name Amadeo Giannini ring a bell?

This was an Italian immigrant who made a home and a name for himself in early 20th century San Francisco. Giannini started in business as a broker in fruits and vegetables. After the great San Francisco earthquake, when all the area banks were shutting off credit to businesses, Giannini opened his doors as the Bank of Italy. He learned all the languages of his customers. He lent money to women, opening up a women’s department in his bank. He did all the things the other banks of that era would never consider doing.

Today we know Giannini’s business as The Bank of America. The lesson of all this for an audience of Dematic customers: Never do business with anyone unless you know as much about their side of the table as they do. That allows you to provide better service and to innovate. Buchholz noted that Giannini even studied the dairy industry and was the first to loan money to Borden Dairy because he recognized milk as collateral. He loaned money to Disney in the early years of that studio because he recognized those Snow White drawings and cells were collateral.

“If you’re on the material handling and logistics side or the supply chain management side and you’re pitching a book distributor, it’s not sufficient to be the foremost expert on computers and conveyor belts, you better have some knowledge of how the publishing industry is changing,” Buchholz said. “Also, understand the expectations of consumers for on-time delivery. You need to be someone who can make sense of complexity.”

The Brain Race

That requires educated professionals and Buchholz emphasized that the U.S. is in a global race for IQ points. “Whatever country harnesses intelligence will prosper the most in the 21st century,” he said. He noted that even during our recent recession the unemployment rate for those with a college degree was only 4%.

During the Q/A at the end I had the opportunity to ask Buchholz to expand on the state of the engineering talent pool and its connection to the economy. He noted that there’s new growth in commodities, which makes engineering and logistics more attractive as professions—even for the unskilled, in some locations.

“In Australia they’re paying truck drivers $100,000 to move to Western Australia to drive trucks around the mines,” he said. “For your people coming up in logistics we are not at the end of the effort to squeeze costs at increased speeds and to get better distribution. You’re doing it to squeeze out lower skills but you need the upper skills to design the systems–so you have fewer unskilled laborers on the shop floor. So this is a great area for younger people with training but it’s probably a bad area if you’re an unskilled worker.”

Dematic’s Take on Its and Our Future

After this session I had the opportunity to chat with John Baysore, president and CEO of Dematic North America. This was a chance to see if Dematic’s experience matched the opportunities Buchholz laid out in the presentation he gave for them. Remember what he said about the demand to squeeze costs out? That’s an opportunity Dematic is going after full force—by beefing up its engineering muscle.

“We’re hiring engineers on the controls and software side of the business,” Baysore told me. “The strategy is to leverage software first and controls second to reduce hardware. That has helped us competitively. We’re looking at lean methodologies. We’ve already taken out a lot of the low hanging fruit so we’re looking at fine tuning from a lean perspective, meaning all of our processes and how we handle a job. That means looking at ways to take costs out and shorten project cycle time. Customers want us to be able to turn orders around quicker. We’re putting pressure on ourselves to do that.”

That doesn’t mean cool stuff like automatic guided vehicles (AGVs) are old hat. On the contrary, for the food and grocery industry, this technology is as fresh today as it was 20 years ago in the manufacturing world.

“There’s now a tremendous opportunity for AGVs in Dematic’s traditional markets,” Baysore explained. “HK was more on the manufacturing side and Dematic was a little further downstream in warehousing and distribution. As a result, to meet this growing interest in AGVs we decided to more aggressively invest in R&D. We need to create dedicated leadership with P&L responsibility in that sector to drive it. It’s a great entry point for companies just ready to dabble in automation. Mix in ideas like LaserTrucks+ which adds voice picking to a non-manned vehicle and this lets companies get into some level of automation without a full-blown comprehensive conveyor system.”

This echoes what Buchholz said about understanding customers’ markets. But is there enough engineering talent out there to help Dematic take that concept to a wide variety of industries? After all, as I reported in my last blog from this conference, Baysore told attendees that his company has an open requisition for 150 more engineers. Is he concerned about the talent pool?

“We’ve had that open requisitions for engineers since the end of the recession,” he told me. “We’ve never completely filled those positions because we’ve increased our scrutiny. We have taken a lot of fresh-out-of-school graduates from areas surrounding our field offices and trained them. We’re looking for engineers on the controls and software side of the business. The strategy is to leverage software first and controls second to reduce hardware. We’re looking at lean methodologies.”

To conclude our reports from the Dematic Customer Conference, it seemed fitting to ask Baysore how he felt about business prospects going into his company’s new fiscal year, which starts in October. His forecast:

“We’re going into 2012 with the strongest backlog we’ve had in five years and the strongest pipeline we’ve ever seen in new opportunities, so barring some kind of cataclysmic meltdown we expect to grow another $50-100 million in revenue.”

Dematic North America CEO John Baysore started his company’s first full day of “Supply Chain Rebound” conference sessions with some news that supported the event’s theme. Not only has his company added 200 engineers to its staff since it acquired HK Systems last year, but it is looking for 150 more. Senior Vice President Mike Kotecki piled on more good news about the economy with these numbers representing U.S. industry: 189,000 new manufacturing jobs added this year and inventories on the rise.

But those are general feel-good stats you would expect from the hosts of this kind of conference. The real work was yet to be done by conference speakers whose job was to inspire the 350 attendees to do their part in the recovery by improving their supply chain performance.

Joseph Tillman, of Supply Chain Visions Ltd., reported that the real bellwether of recovery is consumer confidence, and unfortunately the most recent gauge of it was below 50, which is considered a retreat. So the fact that companies are still interested in investing in technology, as evidenced by attendance at this very conference, is heartening. A big part of that is because the bosses of these attendees are pressuring them to reduce costs, so many came to Tillman’s session to hear about the supply chain best practices that will help them accomplish that mission.

Tillman said it takes more than adopting a laundry list of metrics to raise the performance bar. Any metric, whether on-time shipping or perfect orders, must be:

1. Objective—tied to the work being done at your site;

2. Results oriented—employees being measured should be involved in collecting performance numbers ; have them post a sign in the workplace to ensure goals are being reached. These should be compared to historical data. This will help ensure buy-in from those being measured.

3. Tied to root causes—why didn’t we reach this goal? This shows where to focus efforts. Sometimes the answer lies outside the group and points to another;

4. Action-oriented—once causes are found, share them with all groups involved, especially those that might be keeping your group from reaching its goals. Don’t point fingers, but share data, and ask “what can we do to help you improve?”

5. Tied to corporate goals. Your organization can’t be best at everything, so choose those goals that best align with your company’s stated goals.

Performance improvement for Joseph Shaw of Ahold USA lies in streamlining his supply chain. That’s easier said than done for a company in food and grocery. Ahold manages a portfolio of 90,000 products from 5,000 vendors. Defining performance metrics surrounding this management effort started with realizing that 15,000 of those 90,000 products are critically important and should be their core focus. Those are then broken down by commodity, category and vendors. From there, 1,700 products were analyzed.

Then the Ahold DC network was analyzed for which products could be co-located. Optimal DC locations were selected based on product demand. But that’s the easy part of network rationalization. The hard questions include the cost of a new building and the material handling systems it will house. The question may become “why do I need to relocate?” Then there’s transportation rationalization: how can I ship in full truckloads to get a better rate? Can I consolidate distribution points? How many DCs can I shut down? But remember, when trying to make transportation more efficient, factor in driver hours of service. Going over that limit can counterbalance any transportation efficiencies.

The end product should be a baseline model managed by one person so it can be revisited periodically and its history can be understood. That person will understand the quirks that went into the first go-round and he or she can help the organization avoid making the same mistakes twice.

More from the Dematic conference in tomorrow’s blog post.

I’m not an expert on yogurt. The subtleties among the various brands are all Greek to me. But here I am in Park City, Utah, not only talking about yogurt with my dinner companions, but talking about Greek yogurt. Our dinner is being hosted by Dematic, on the opening night of its annual logistics conference (its first time hosting since acquiring HK Systems last year).

Now, I’m not sure, but I’ll bet our hosts don’t know much about Greek yogurt either. As far as I could tell, it was nowhere on the dessert table. However, my fellow dinner companions are experts, not only about the developing markets for Greek yogurt in the U.S., but about the material handling challenges of making and moving the stuff for these markets.

These gentlemen are from Schreiber Foods, a $4+ billion global enterprise and the world’s largest customer-brand dairy company. They are big enough to care about continuous improvement, hence their presence at this conference. They have their sights set on getting fresh ideas from this event and applying them in their operations.

What impressed me about these guys was they not only knew about Greek yogurt, but they understood the connection between really good Greek yogurt and really good material handling. The quality of this particular product is tied not only to quality ingredients, but to quality material handling techniques. The ingredients of Greek yogurt require a compressed production timeframe—meaning higher-speed material handling and timely transportation.

The fact they consider material handling and logistics a competitive advantage not only for quality service but quality product is as fresh to my ears as my introduction to Greek yogurt. In fact when I got back to my room I did a little Internet search and found out a little more about the company.

It has a large dairy plant in Shippensburg, Pa., that specializes in cream cheese and yogurt production. The facility is an integral part of the Schreiber Foods system, which, according to the report I found, is the largest supplier of private-label cream cheese. Apparently Schreiber is pursuing a significant investment in this plant, possibly enabling it to produce 180-200 million lbs. of yogurt, mostly Greek.

Schreiber made other news this year with its acquisition of Dean Foods, Dallas-based producers and wholesalers of dairy products. So it’s obvious why Schreiber has Greek yogurt and U.S. material handling on its mind. They want to be the best in both.

I ended this evening with new knowledge of a food that’s foreign to me, but with a renewed appreciation for the strategic importance of my old friends, material handling and logistics. I’m looking forward to hearing more fresh perspectives at this conference in the next couple days. I’m optimistic. The sessions haven’t even started yet and I’ve already posted a blog. Wonder what’s for dinner tomorrow.

The political waters have become so muddied that these days, even the idea of training now has taken on negative connotations. A recent op-ed in the Wall Street Journal, for instance, suggests that taxpayer-funded job training programs are so ineffective that the only thing they teach is bad work habits.

Reacting to President Obama’s recent proposal of new federal job-training programs for young people and the long-term unemployed, author James Bovard observed that “the federal government has experimented with these programs for almost a half century. The record is one of failure and scandal.”

As Bovard sees it, these training programs typically end up costing the trainees where it hurts the most: in their wallets. One study he cites, for instance, determined that one such government training effort resulted in “significant losses for young men of all races and no significant effects for young women.” Too often, he says, these training programs offer little more than pointless busy work for the trainees (e.g., studying butterfly habitats), and are emblematic of what happens when bureaucracies attempt to justify their existences.

Okay, so let’s assume for the sake of discussion that Bovard’s point is a valid one, but what he’s talking about are government programs. What about training efforts in the private sector? As it turns out, even company-led training programs leave much to be desired.

According to Nick Goebel, global training services manager with Rockwell Automation, manufacturers often lack a basic understanding of whether or not their training programs address the skills gap their workforce is facing. As reported by our sister publication, IndustryWeek, too often managers approach the idea of training as being “a one-off engagement.” Goebel suggests that instead of taking such a narrow view of training, managers should follow three basic steps to ensure their efforts will pay off:

1. Assess your workforce’s skills to ensure you’re focusing on the right things.

2. Customize the training programs to your team’s specific needs.

3. Provide your employees with the right tools to perform the skills they’ll be learning.

Echoing Goebel’s recommendations, particularly point # 3, is Laurie Keyser Brunner, senior VP of global client services with consulting firm ESI International. There is the assumption, Brunner says, “that training translates into an actual transfer of learning in the classroom to changed performance on-the-job. For this to happen, organizations must develop a supportive and complementary workplace environment, where management, business processes and supporting tools all permit the learner to apply new knowledge and skills immediately upon return to work.”

Too often, she notes, companies fail to establish success criteria or identify expectations for the training program. Quantification is a critical step in validating the business case for training. “Producing quantitative and qualitative reports and other high-level output can help prioritize training investments based on real, tangible data showing job impact.”

Postscript: Nick Goebel of Rockwell Automation, whom I quoted above, sent along the following comment in response to my blog post:

David, thanks for calling attention to the importance of training today’s workforce. The point I was making in the IndustryWeek article, rather than questioning the worthiness of training programs, is that in fact there are many manufacturers who are doing a great job of training their staff – indeed, the best practices I outlined there are reflective of the strategies many of our customers are taking in their own operations. The next step is to unite manufacturers, educators, and government organizations to share these best practices and ensure training programs, curriculums and funding policies develop and integrate at the same pace so that the workforce is able to thrive in this complex manufacturing environment.

Supply chain management is all about how contingencies are handled among a group of diverse enterprises with common needs. The most common need is information.

That’s the theme I’m working on for my October supply chain technology feature, anyway. But in talking to technology vendors about such ethereal stuff, it was almost quaint to hear one of them talking about equipment leasing. Isn’t that more of a lift truck thing?

Not when the economy isn’t doing very well and Christmas is around the corner. In that case, what’s on a technology vendor’s mind are ways to get more customers—and obviously keep them by serving them better. In that way, technology suppliers are becoming more like service providers. Bruce Stubbs, director of industry marketing for Intermec, told me his company’s customers are leery about owning more bar code scanners than absolutely necessary.

“Some of these folks have been asking us if there is some way we can package solutions so they don’t have to own the equipment,” he told me. “They would lease the hardware, software and services for a period of time and treat it as an operating expense vs a capital expenditure.”

Stubbs says his company is looking at developing that model further and is even helping justify the return on investment. The thinking goes, if a user is increasing their efficiencies and productivity, that turns into a daily ROI so why not track it that way for their company and spread it out over several months vs purchasing it and hoping for a payback in a year.

That kind of model is even more attractive to a lot of retailers gearing up for the holidays.

“If I typically need 30 devices to meet my demand throughout the year but at my peak season I need 50, why go out and buy 20 additional and have them sitting for the rest of the year?” Stubbs reasons. “How about owning those 30 then at my peak lease an additional 20 and after my six to eight week period I can shift them back to the vendor.”

He told me Intermec’s also going to embrace rental. I just thought it was interesting to hear those creative financing terms being applied to the creative technology coming out of supply chain R&D. Let me know if you agree and want to see this applied to other supply chain technologies you’re using or thinking of using.

It seems the automotive world has been getting all the headlines when it comes to sustainable energy sources. However, I contend much of the progress in proving a particular form of alternative energy has been made off-road—with industrial trucks. And for those naysayers who cite the lack of a hydrogen infrastructure as the reason fuel cells will never go mainstream as battery-power has, I ask: what about the potential battery waste stream?

Sure electric cars are green—until they reach the end of their life in a few years and something has to be done with all those batteries. Market research firm Frost & Sullivan expects as many as 500,000 depleted battery packs a year will enter the waste stream by the early 2020s. Whether that waste stream will be handled responsibly is the big question. If urban miners can make a profit from some of the metals they find in it, they might help clean it up.

But Eric Jensen thinks fuel cell developments in the lift truck world might give automakers a good excuse to take another look at fuel cells. Jensen is director of new technology research and development for Crown Equipment Corp., the New Bremen, Ohio-based lift truck manufacturer. He says many of the biggest breakthroughs in fuel cell durability have already come through the material handling world.

“Our demand for lifecycle is greater than the auto industry,” he told me. “Our machines will easily clock 20,000 hours before they’re retired. A car will typically go 5-6,000 hours, unless you’re one of these guys who can get 350,000 miles out of a car.”

He adds that the lift truck industry is free of the automobile industry’s conundrum of car and power technologies being developed in isolation in hopes that they’ll eventually hook up gracefully.

“Since the operator of the fuel cell also owns the lift truck, the fuel cell and the fuel supply, he has the entire basket all to himself, where in the auto industry they build the car and hope there’s a fuel supply available,” he says. “The material handling industry has been able to solve that chicken or egg problem. There are more fuel cell powered lift truck running around in North America than there are automobiles—maybe 200-300 cars vs over 1,000 fuel cell trucks.”

The Coca-Cola Bottling Co.’s Charlotte, N.C. production center is using 35 of those fuel cell trucks. Crown recently sold Coke on using fuel-cell-powered counterbalanced lift trucks at this plant where traditionally internal combustion engine lift trucks would have been the vehicles of choice to move and lift their 6500-pound-loads. This was both an environmental move and a cost-savings gambit for Coke. Besides the fact there are no fumes being pumped into the work environment, there are significant labor savings by eliminating battery charging cycles. Hydrogen refueling takes approximately two to five minutes while replacing a depleted battery can take as long as 40 minutes, and according to Jensen, batteries used in an operation like Coke’s might need to be changed with as little as six hours of run time on them.

Jensen believes that by 2016 fuel cells will be better integrated into industry as well as into lift trucks.

“There won’t be any external controls hanging on the outside of the truck,” he predicts. “You’ll roll the fuel cell in, plug the power cable in, plug the data cable to the truck and the truck and the fuel cell will act as a single unit.”

If only the operators of these vehicles—cars and lift trucks—could act as single-mindedly we’d have far fewer wrecks going into the waste stream with all those batteries.

That old line about the sliding scale of untruths—lies, damn lies and statistics—is fun to use when someone quotes a number to support their argument. How many times have you read an article that debunks a widely-believed statistic? A few years ago chocolate was bad for you. Too much sugar, caffeine and empty calories. Now the conventional wisdom is that chocolate is good for you. Its antioxidants will help you live to 150. That’s if you don’t get killed in an industrial dust explosion first.

That was another popular belief a couple years ago—that lift trucks were involved in many of the combustibe dust violations found by OSHA inspectors. That stat was reported in a status report OSHA published in 2009 on its Combustible Dust National Emphasis Program.

“Employers were cited for violations of personal protective equipment, electrical equipment for hazardous (classified) locations, first aid, powered industrial trucks, and fire extinguisher standards during these inspections,” the report stated. It documented this with a chart showing Powered Industrial Trucks responsible for 236 violations—third behind hazard communication and Housekeeping.

Recently, John Astad, an expert on the hazards of combustible dust whom I’ve quoted in previous blogs, e-mailed me a new version of this report. It had the same chart, but the industrial trucks category was missing. He was concerned that, whether this were a mistaken or an intentional omission on OSHA’s part, that it could lower a user’s guard about the dangers of using spark-ignited engines in dusty environments and leave them vulnerable to citations.

Astad is sensitive to irregularities in OSHA stats, citing one in particular which states that 90% of combustible dust related incidents result in injuries or fatalities. This is diametrically opposed to his own research done in 2008 where he found that fewer than 10% of ComDust related incidents resulted in injuries or fatalities.

I checked with my source at OSHA, and after a little investigation, here’s what he found out about that chart from which the industrial trucks category was removed:

“After reviewing the data on which the bar chart was based, it was concluded that powered industrial trucks were involved in not 236 violations, but only 24 violations,” he told me. “In other words, 212 of the 236 combustible dust related violations attributed to powered industrial trucks had nothing to do with combustible dust. This error was rectified in our revision, in May of 2010.”

I share this with you as a reminder to keep that salt shaker handy next time you’re being fed statistics. Numbers go down easier with large grains of salt.