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."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.