Improper battery rotation was costing DSC Logistics big money. An automated lift truck battery management system put a stop to that—and paid for itself in a few weeks.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Old habits die hard ... especially when it comes to swapping out lead-acid lift truck batteries. Observe forklift operators in a battery room, and you're likely to see them do one of two things: walk up and down the aisles looking at batteries before choosing the one that looks newest, or nip inside and grab the battery that's closest to the entrance. It's hard to blame them for going either of those routes. Most people will assume that the newest piece of equipment will be the best performer. And operators don't want to spend more time "out of the saddle" than they have to, especially if their pay is based on productivity.
Understandable as those habits may be, they almost guarantee that operators will fail to choose a battery that has been properly charged and fully cooled. That's a problem, because routinely selecting and using the "wrong" batteries will cause their performance and longevity to degrade. That, in turn, translates into more frequent changes during a shift as well as the need to keep a larger number of batteries on hand.
Until three years ago, that was the situation at the University Park, Ill., distribution center (DC) operated by the third-party logistics (3PL) company DSC Logistics. When managers noticed a pattern of unusually frequent changes and shorter-than-expected battery life, they found that incorrect battery selection was to blame. After their original solution produced disappointing results, they turned to an automated battery management system that not only eliminated those problems but also paid for itself in a matter of weeks.
FREQUENT CHANGES RAISE RED FLAGS
The 575,000-square-foot DC operates three shifts five days a week, handling mostly dry and some refrigerated food at the pallet, layer, and individual case level. University Park has a fleet of 45 forklifts, including 22 standup counterbalanced trucks, 11 standup deep-reach trucks, one order picker, and four pallet jacks, all manufactured by Crown Equipment Corp. (The balance are short-term rental trucks.) The fleet is powered by a pool of 85 batteries, all of them purchased from EnerSys, including a single model for all of the standup counterbalanced and deep-reach trucks. That degree of standardization pays off by simplifying vehicle maintenance and operator/technician training; it also helps to keep purchase prices reasonable, says Jim Chamberlain, DSC's senior director of industrial engineering and continual improvement.
While reviewing reports in DSC's labor management system (LMS) some years ago, Chamberlain and his colleagues noticed that lift truck operators frequently made more than one battery change per shift. Short battery run times were compromising productivity, but that wasn't the only problem. There also appeared to be a correlation between the frequent changes and the batteries' shorter-than-expected lifespans.
Observation revealed that improper battery selection was to blame, so the operations and industrial engineering teams came up with a "first in, first out" process to help drivers choose batteries that had been charged and fully cooled. In the battery changing area, there would be one empty storage slot; drivers were told to always put their used battery in that slot and take the fresh one immediately to the right.
"In theory, if everyone [follows the procedure], drivers will never get back to the battery they just put in until they have come all the way around [the storage slots]," Chamberlain explains. But even with that simple visual system, compliance was spotty, he says.
This method produced limited improvement, so DSC asked its battery supplier for ideas. EnerSys suggested an automated battery management system that could address all of its customer's concerns.
SURPRISE TEST RESULTS
The automated battery management system installed by EnerSys, called EZ Select, ensures that all batteries are evenly rotated. "The system monitors the chargers, and when a charge is complete, that battery goes into a queue organized by cool-down time," explains Paul Roeser, national accounts manager for EnerSys.
At DSC's University Park facility, when an operator enters the battery changing area, he or she uses an automatic battery-change cart to insert the depleted battery into an empty slot before hooking the battery up to a charger. Next, the operator looks at EZ Select's light-emitting diode (LED) display panel, which is mounted on a pole at one end of the battery-charging area. The display panel indicates the number of the charger position where the next available properly charged (and longest-cooled) battery is located, Roeser explains. The operator uses the cart to extract the fresh battery, rolls it back to the lift truck, and installs it in the vehicle.
If an operator attempts to take a battery other than the one indicated on the screen, an alarm immediately sounds. The battery management system also applies a date and time stamp to the error, a feature that identifies which operators are making the mistakes. That allows DSC to coach employees who need more training, an approach that quickly paid off. "Now, the employees get it: If we all follow this, then we'll all get good batteries," Chamberlain says. "It's actually fostered more of a team mentality."
Before EnerSys and DSC turned on all the system's capabilities, they ran it "blind" for a week, recording activity but without providing any instructions to operators. The purpose was to get an accurate baseline of operators' current behaviors. The results, in Chamberlain's description, were "startling." It turned out that operators were choosing the right battery only 3 percent of the time. The system documented that they were choosing whichever battery was closest, most convenient, or newest. The blind test, moreover, showed why run times and life spans were so short: The average cool-down time for the batteries the operators selected was just two hours, Chamberlain says.
LESS COST, MORE EFFICIENCY
The automated battery management system, together with operator training, has helped DSC Logistics all but eliminate battery-selection errors. When the system was first installed in 2012, the accuracy of battery selection soared to over 96 percent from 3 percent, and the average cool-down time for each battery rose to 10 hours from two. As a result, Chamberlain says, "We are getting proper run times now ... We've pretty much gone from two to around one change per shift."
Those changes have also improved average battery life spans. "We conservatively estimate that we put an additional six months on a battery's life with this system," but it can be considerably more, depending on the circumstances, says Roeser of EnerSys.
Automated selection has also reduced the time spent changing batteries at the University Park DC by 430 hours annually. There are two reasons for that, Roeser says: Operators no longer walk around looking at batteries before deciding which one to take, and the number of battery changes per shift has been greatly reduced.
Because all of the batteries are properly charged and cooled, more of them are available for use at any one time. That has allowed the three-shift operation to cut down on the number of batteries it maintains per truck from 2.5 to just over two.
An EnerSys analyst monitors the data the EZ Select system uploads daily. The vendor uses that information to identify potential problems with batteries or chargers. Based on trend data, the company can recommend an action plan to drive out costs, Roeser says.
Chamberlain notes that this type of analysis allowed the system, which required an initial investment of less than $24,000, to essentially pay for itself in just one month. To accommodate additional business, DSC had been planning to add another lift truck to its fleet. "With the information from the battery management system, we realized that we already had a healthy ratio of batteries to trucks, and that we could add a truck without buying any additional batteries, chargers, or stands," he recalls. According to EnerSys, DSC achieved savings of $25,000 in the first year after installation and is projecting annual savings in future years of about $31,000.
That was enough to convince Chamberlain and his colleagues to spread the word about the benefits of automated battery selection. "We have this system now in 11 of our logistics centers," he says. "Our goal is to continue rolling them out because they have had such a positive impact on our business."
The system's impact extends well beyond time and cost reduction, in Chamberlain's view. "Our customers are always challenging us to improve what we do for them and how our business is run," he says. Automated battery management has helped DSC meet that expectation. "What it has done is take something that for us was subjective and inconsistent, and turned it into something controlled and standardized," he says. "There really isn't a downside."
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."