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."
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
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.