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."
When you get the chance to automate your distribution center, take it.
That's exactly what leaders at interior design house
Thibaut Design did when they relocated operations from two New Jersey distribution centers (DCs) into a single facility in Charlotte, North Carolina, in 2019. Moving to an "empty shell of a building," as Thibaut's Michael Fechter describes it, was the perfect time to switch from a manual picking system to an automated one—in this case, one that would be driven by voice-directed technology.
"We were 100% paper-based picking in New Jersey," Fechter, the company's vice president of distribution and technology, explained in a
case study published by Voxware last year. "We knew there was a need for automation, and when we moved to Charlotte, we wanted to implement that technology."
Fechter cites Voxware's promise of simple and easy integration, configuration, use, and training as some of the key reasons Thibaut's leaders chose the system. Since implementing the voice technology, the company has streamlined its fulfillment process and can onboard and cross-train warehouse employees in a fraction of the time it used to take back in New Jersey.
And the results speak for themselves.
"We've seen incredible gains [from a] productivity standpoint," Fechter reports. "A 50% increase from pre-implementation to today."
THE NEED FOR SPEED
Thibaut was founded in 1886 and is the oldest operating wallpaper company in the United States, according to Fechter. The company works with a global network of designers, shipping samples of wallpaper and fabrics around the world.
For the design house's warehouse associates, picking, packing, and shipping thousands of samples every day was a cumbersome, labor-intensive process—and one that was prone to inaccuracy. With its paper-based picking system, mispicks were common—Fechter cites a 2% to 5% mispick rate—which necessitated stationing an extra associate at each pack station to check that orders were accurate before they left the facility.
All that has changed since implementing Voxware's Voice Management Suite (VMS) at the Charlotte DC. The system automates the workflow and guides associates through the picking process via a headset, using voice commands. The hands-free, eyes-free solution allows workers to focus on locating and selecting the right item, with no paper-based lists to check or written instructions to follow.
Thibaut also uses the tech provider's analytics tool, VoxPilot, to monitor work progress, check orders, and keep track of incoming work—managers can see what orders are open, what's in process, and what's completed for the day, for example. And it uses VoxTempo, the system's natural language voice recognition (NLVR) solution, to streamline training. The intuitive app whittles training time down to minutes and gets associates up and working fast—and Thibaut hitting minimum productivity targets within hours, according to Fechter.
EXPECTED RESULTS REALIZED
Key benefits of the project include a reduction in mispicks—which have dropped to zero—and the elimination of those extra quality-control measures Thibaut needed in the New Jersey DCs.
"We've gotten to the point where we don't even measure mispicks today—because there are none," Fechter said in the case study. "Having an extra person at a pack station to [check] every order before we pack [it]—that's been eliminated. Not only is the pick right the first time, but [the order] also gets packed and shipped faster than ever before."
The system has increased inventory accuracy as well. According to Fechter, it's now "well over 99.9%."
IT projects can be daunting, especially when the project involves upgrading a warehouse management system (WMS) to support an expansive network of warehousing and logistics facilities. Global third-party logistics service provider (3PL) CJ Logistics experienced this first-hand recently, embarking on a WMS selection process that would both upgrade performance and enhance security for its U.S. business network.
The company was operating on three different platforms across more than 35 warehouse facilities and wanted to pare that down to help standardize operations, optimize costs, and make it easier to scale the business, according to CIO Sean Moore.
Moore and his team started the WMS selection process in late 2023, working with supply chain consulting firm Alpine Supply Chain Solutions to identify challenges, needs, and goals, and then to select and implement the new WMS. Roughly a year later, the 3PL was up and running on a system from Körber Supply Chain—and planning for growth.
SECURING A NEW SOLUTION
Leaders from both companies explain that a robust WMS is crucial for a 3PL's success, as it acts as a centralized platform that allows seamless coordination of activities such as inventory management, order fulfillment, and transportation planning. The right solution allows the company to optimize warehouse operations by automating tasks, managing inventory levels, and ensuring efficient space utilization while helping to boost order processing volumes, reduce errors, and cut operational costs.
CJ Logistics had another key criterion: ensuring data security for its wide and varied array of clients, many of whom rely on the 3PL to fill e-commerce orders for consumers. Those clients wanted assurance that consumers' personally identifying information—including names, addresses, and phone numbers—was protected against cybersecurity breeches when flowing through the 3PL's system. For CJ Logistics, that meant finding a WMS provider whose software was certified to the appropriate security standards.
"That's becoming [an assurance] that our customers want to see," Moore explains, adding that many customers wanted to know that CJ Logistics' systems were SOC 2 compliant, meaning they had met a standard developed by the American Institute of CPAs for protecting sensitive customer data from unauthorized access, security incidents, and other vulnerabilities. "Everybody wants that level of security. So you want to make sure the system is secure … and not susceptible to ransomware.
"It was a critical requirement for us."
That security requirement was a key consideration during all phases of the WMS selection process, according to Michael Wohlwend, managing principal at Alpine Supply Chain Solutions.
"It was in the RFP [request for proposal], then in demo, [and] then once we got to the vendor of choice, we had a deep-dive discovery call to understand what [security] they have in place and their plan moving forward," he explains.
Ultimately, CJ Logistics implemented Körber's Warehouse Advantage, a cloud-based system designed for multiclient operations that supports all of the 3PL's needs, including its security requirements.
GOING LIVE
When it came time to implement the software, Moore and his team chose to start with a brand-new cold chain facility that the 3PL was building in Gainesville, Georgia. The 270,000-square-foot facility opened this past November and immediately went live running on the Körber WMS.
Moore and Wohlwend explain that both the nature of the cold chain business and the greenfield construction made the facility the perfect place to launch the new software: CJ Logistics would be adding customers at a staggered rate, expanding its cold storage presence in the Southeast and capitalizing on the location's proximity to major highways and railways. The facility is also adjacent to the future Northeast Georgia Inland Port, which will provide a direct link to the Port of Savannah.
"We signed a 15-year lease for the building," Moore says. "When you sign a long-term lease … you want your future-state software in place. That was one of the key [reasons] we started there.
"Also, this facility was going to bring on one customer after another at a metered rate. So [there was] some risk reduction as well."
Wohlwend adds: "The facility plus risk reduction plus the new business [element]—all made it a good starting point."
The early benefits of the WMS include ease of use and easy onboarding of clients, according to Moore, who says the plan is to convert additional CJ Logistics facilities to the new system in 2025.
"The software is very easy to use … our employees are saying they really like the user interface and that you can find information very easily," Moore says, touting the partnership with Alpine and Körber as key to making the project a success. "We are on deck to add at least four facilities at a minimum [this year]."
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
Keith Moore is CEO of AutoScheduler.AI, a warehouse resource planning and optimization platform that integrates with a customer's warehouse management system to orchestrate and optimize all activities at the site. Prior to venturing into the supply chain business, Moore was a director of product management at software startup SparkCognition. He is a graduate of the University of Tennessee, where he earned a Bachelor of Science degree in mechanical engineering.
Q: Autoscheduler provides tools for warehouse orchestration—a term some readers may not be familiar with. Could you explain what warehouse orchestration means?
A: Warehouse orchestration tools are software control layers that synthesize data from existing systems to eliminate costly delays, streamline inefficient workflows, and [prevent the waste of] resources in distribution operations. These platforms empower warehouses to optimize operations, enhance productivity, and improve order accuracy by dynamically prioritizing work continuously to ensure that the operation is always running optimally. This leads to faster trailer turn times, reduced costs, and a network that runs like clockwork, even during fluctuating demands.
Q: How is orchestration different from a typical warehouse management system?
A: A warehouse management system (WMS) focuses on tracking inventory and managing warehouse operations. Warehouse orchestration goes a step further by integrating and optimizing all aspects of warehouse activities in a capacity-constrained way. Orchestration provides a dynamic, real-time layer that coordinates various systems and processes, enabling more agile and responsive operations. It enhances decision-making by considering multiple variables and constraints.
Q: How does warehouse orchestration help facilities make their workers more productive?
A: Two ways to make labor in a warehouse more productive are to work harder and to work smarter. For teams that want to work harder, most companies use a labor management system to track individual performances against an expected standard. Warehouse orchestration technology focuses on the other side of the coin, helping warehouses "work smarter."
Warehouse orchestration technology optimizes labor by providing real-time insights into workload demands and resource availability based on actual fluctuating constraints around the building. It enables dynamic task assignments based on current priorities and worker skills, ensuring that labor is allocated where it's needed most, even accounting for equipment availability, flow constraints, and overall work speed. This approach reduces idle time, balances workloads, and enhances employee productivity.
Q: How can visibility improve operations?
A: Due to the software ecosystem in place today, most distribution operations are highly reactive environments where there is always a "hair on fire" problem that needs to be solved. By leveraging orchestration technologies, this problem is mitigated because you're providing the site with added visibility into the past, present, and future state of the operation. This opens up a vast number of doors for distribution leadership. They go from learning about a problem after it's happened to gaining the ability to inform customers and transportation teams about potential service issues that are 24 hours away.