Lots of vendors will tell you their material handling equipment is ready to "plug and play." But the reality is, there will still be a need for systems integrators for a long time to come.
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
When you go to buy a printer or a camera these days, you don't have to worry about getting it to work with your PC. You can plug it into your computer and—bingo!— it's ready to go.
Unfortunately, the ease of integration that we've come to expect with our consumer electronics doesn't translate into the material handling world. Although a lot of vendors market their equipment as ready to "plug and play," DC managers can't assume that the new devices they're installing will automatically be able to "talk" to other components of their material handling systems.
Most of the time, DCs find they have to bring in a systems integrator, a specialist that creates interfaces between electronic devices so that they can communicate with each other. Although industry experts say it's much easier to connect material handling equipment to computer systems today than it was 10 years ago, right now, plug and play is still more an ideal than a reality.
Making a connection
That's not to say that all of the plug-and-play claims made by vendors are pure hype. Though the equipment's capabilities are often oversold, there are some cases in which customers can install a new piece of equipment without the need for integration. But those instances are limited to very basic setups. If a warehouse or distribution center simply needs to move a box from storage to the loading dock via conveyor, then it's possible to "plug and play." Indeed, a number of manufacturers make transport-type conveyors that can be set up fairly easily. "The closest thing to plug and play in materials handling is the DC volt [motor] conveyor," says Robert Reinhartsen, an account executive with W&H Systems, a systems integrator based in Carlstadt, N.J.
But few installations are so simple. The typical distribution center today uses an array of sophisticated material handling equipment to get product in and out the door. That equipment runs the gamut from conveyors to pick-to-light systems, from print-and-apply bar-code labeling machines to voice-recognition systems. All of those devices receive their directions from a warehouse management system (WMS), a software application that coordinates the flow of product putaway, storage, and retrieval. "When you get into systems that do complex things, "says Reinhartsen, "you have to design and integrate the equipment."
Still, integration is not the chore it was 10 years ago. Back then, a systems integrator would have to write special interfaces between the WMS and a piece of material handling equipment so that the software could transmit instructions to the device. "A decade ago, it took 14 weeks to get the WMS up and running and another 36 weeks to get all the components connected," says Jack Kuchta, a consultant with Gross and Associates in Woodbridge, N.J. "What's changed is that there's now off-the-shelf middleware to handle the equipment interfaces to a major WMS."
In part, it's easier to connect software systems to automated conveyor and sortation equipment today because of the existence of network communications standards for industrial automation—such as the EtherNet Industrial Protocol (IP), Profibus (for process field bus), and DeviceNet networks. Those protocols enable devices like bar-code scanners, motors, and sensors to exchange information with programmable logic controllers (PLCs). "Every manufacturer used to have its own method for talking to PLCs," says Mike Brinkman, a controls sales manager for Bastian Material Handling in Indianapolis. "We now use standard protocols so it doesn't matter if you have a Siemens or a Dematic conveyor."
Along with these protocols, the industry has seen the emergence of a software application called a warehouse control system (WCS), which sits between the WMS and the material handling equipment. The WCS takes general instructions from the WMS about what products need to be moved and translates that information into specific instructions for a particular piece of equipment. In essence, says consultant Sam Flanders, president of 2wmc.com, a material handling consulting firm in Portsmouth, N.H., the WCS serves as an integration platform on which to connect the different kinds of equipment.
Everybody's unique
Despite these technological advances, the industry is still a long way from plug and play. Why is that? Experts in the field say that given the enormous variation from one DC operation to another, it would be impossible to create a one-size-fits-all software package. Some customization will always be required. "The backbone of the system is software, and there's no product that comes in a box all wrapped up in cellophane," says Steve Martyn, chief executive officer of GRSI, a systems integrator located outside Philadelphia.
Nowadays, it typically takes between eight and 12 weeks to install a piece of material handling equipment in a distribution center, says Martyn. As part of the project, a company has to develop a "functional document," a spec sheet that spells out what has to be done in terms of integration. Once the specs are written, Martyn says, an integrator can use existing software templates, but it still has to write specific coding instructions for at least 40 percent of the integration.
It's essential that a company define the transaction format—the method of exchanging data between the computer application and the equipment. Flanders says that the format will specify the information required for the equipment to do a task—an item's order number and quantity, at a minimum— and then determine what information the equipment will send back to the computer when the job is completed. "It's not like installing software on your computer," Flanders notes. "You have to define the transaction format. You have to get data into a format that's understood."
No industry consensus
Before plug and play can become a reality in the material handling world, the industry would first have to agree on a set of standards for data exchange—standards that software and equipment makers would be required to follow. That's not an impossible task; after all, players in the computer and electronics industry were able to agree on the Universal Serial Bus (USB) as a standard for interfacing devices with computers. But it's one that would require leadership. "The only way to have true plug and play is if you have a body of industry leaders that define a standard," says Daniel Ahrens, a client support manager at Fortna Inc., a material handling consulting firm and systems integrator based in West Reading, Pa. "This is the standard for WMS and will consist of this message type. Anyone who wants to participate would have to adhere to this standard."
But unlike the consumer electronics sector, the material handling industry has yet to show much interest in promoting common interface standards. "The trouble with standards is you have to get hundreds of companies to agree," says Flanders. "You have to have a driving force to make this happen. And nobody thinks it will result in extra revenue."
Although there's no pressure on the material handling industry to develop common standards right now, that could change. The ranks of warehouse management software providers are dwindling in the face of competition from enterprise resource planning (ERP) system vendors like SAP and Oracle. If the large software houses come to dominate the supply chain software market, they might take it upon themselves to set de facto standards that material handling vendors would be forced to meet. "The big ERP guys probably will eventually set standards," says Martyn.
But as long as companies want their DCs to be unique, companies installing sophisticated material handling equipment will still need the services of systems integrators. "For plug and play to work, it would have to start at the top," says Pratap Chakravarthy, a project manager with Accu-Sort Systems Inc. in Philadelphia. "Every customer would have to have a standard ERP, a standard WMS, and a standard WCS, and each industry would have to have standard operation, which is almost impossible. A lot of customers pride themselves on differentiation, and [they view their DCs' unique capabilities] as a competitive advantage."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."