Beyond forklifts: Toyota enters brave new world of integrated fulfillment solutions
Launch of Toyota Advanced Logistics Solutions (TALS) positions industrial equipment maker to serve exploding e-commerce market; systems integrator Bastian Solutions to provide core capabilities.
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.
The Feb. 2 announcement by global forklift sales leader Toyota Industries Corp. (TICO) that it has created a new division to sell integrated automation and productivity solutions to material handling and logistics markets in North America, and acquired systems integrator Bastian Solutions LLC to provide the foundation for that business, has offered a glimpse into the future of a material handling industry rapidly being reshaped by the explosive growth of e-commerce and omnichannel fulfillment.
TICO, based in Kariya, Aichi Prefecture, Japan, said the formation of the new division, Toyota Advanced Logistics Solutions (TALS), responds to changing dynamics in the North American material handling market that have created "a permanent demand for new forms of logistics solutions, beyond forklifts." TALS and the forklift business will operate separately but will coordinate when strategically appropriate, TICO said. TICO also owns Toyota Material Handling North America (TMHNA), which encompasses Toyota Material Handling U.S.A., The Raymond Corp., and Toyota Industrial Equipment Manufacturing Inc.
Industry veteran Mike Romano was named president and CEO of the new division. Romano takes over on April 3, resigning from his current role as president and CEO of Chicago-based Associated Integrated Supply Chain Solutions. Romano comes with bona fides: Associated, a longtime Raymond dealer, also offers facility and distribution network design, equipment optimization, labor management engineering, lift truck fleet management, systems integration, and storage systems. In 2013, Associated acquired systems integrator Peach State Integrated Technologies.
Indianapolis-based Bastian, which has 20 North American locations, specializes in material handling automation, static and mobile robotics, warehouse execution and management software, and industrial controls. It counts the rapidly growing areas of e-commerce and omnichannel order fulfillment among its major focus areas. The company will retain its name and will continue to be led by CEO Bill Bastian II and President Aaron Jones.
The Bastian acquisition will allow TMHNA to provide a broad range of integrated services in fast-growing areas of demand not currently part of its core business of industrial equipment, serving customers "at a level we have never been able to do before," said Brett Wood, president and CEO of TMHNA, in an interview. "Bastian fit our strategy perfectly," he said, adding that the company's flexibility and expertise in industrial robotics and the development of software to control and manage material handling systems will provide a competitive advantage.
Wood also said a good "cultural fit" and previous experience with Bastian as a supplier of automation to Toyota's Columbus, Ind., forklift-manufacturing plant helped seal the deal.
TICO's strategy is similar to that of rival lift truck vendor Kion Group AG of Heusenstamm, Germany, which eight months ago paid $2.1 billion to buy Atlanta-based systems integrator Dematic Corp. At the time, Kion said it planned to become a "one-stop supplier for intelligent supply chain and automation solutions." Kion also acquired Dematic to position itself for the rapid growth of e-commerce fulfillment and for "Industry 4.0"—a European term for the application of the Internet of Things (IoT) to the industrial and logistics sectors.
In December, Kion said it would create a Supply Chain Solutions business unit comprising Dematic; Belgium's Egemin Automation, a provider of automated guided vehicles and other automation technologies which it acquired in 2015; and Retrotech, a U.S.-based systems integrator that specializes in warehouse automation and retrofits, which Kion acquired in 2016.
Honeywell International Inc.'s 2016 acquisition of the material handling automation supplier and systems integrator Intelligrated, considered to be Dematic's primary competitor, had similar goals. Mason, Ohio-based Intelligrated's warehouse execution system (WES) software and order fulfillment technologies will complement Honeywell's product lines in mobile computers, scanning and auto identification, and voice automation technology, Morris Plains, N.J.-based Honeywell said at the time.
Wood said in the interview that the impetus for all these acquisitions and the companies' end goals are similar. However, TICO's strategy differs in that Toyota is "not trying to integrate what they (Bastian) do into our existing business. ... We have created a brand-new organization with the specific intention of minimizing changes at their company," he said.
FUTURE VISION
TICO plans to make more acquisitions or cement existing partnerships as it builds out the TALS division. That could include acquiring or collaborating with other systems integrators as well as software companies, Wood said. Additionally, Toyota's and Raymond's existing automation businesses, which largely focus on automated guided vehicles (AGVs) for manufacturing and warehouse environments, will move over to TALS, Wood said.
A newly formed "synergy committee" will look for other ways that Toyota, Raymond, and Bastian can collaborate, potentially including such areas as procurement, IT, administration, engineering, and process management, including sharing the famed Toyota Production System, widely known as "Lean," Wood said. He anticipates there will be opportunities for both Raymond and Toyota lift truck dealers to participate in the aftermarket area for automated material handling installations.
Wood said he expects more consolidation in the material handling segment. In addition to domestic match-ups, the rapid growth in North American demand for e-commerce fulfillment and integrated material handling solutions could also attract big players from Europe, China, and Japan that may seek to get into the integrated solutions market through partnerships and acquisitions, he said. Because the biggest systems integrators have already been acquired, attention may turn to smaller and medium-size integrators that may be ripe for partnerships, or possibly acquisitions, he said.
Wood said material handling is in for a wild ride over the next few years. Citing goods-to-person order fulfillment, "connected" lift trucks, and a proliferation of data-communication methods as examples of advances that have dramatically changed the field in recent years, he forecasts more changes to come. "Telematics and [material handling] technology over the next 10 years will be very different and will advance much faster than in the last 10 years. I'm convinced of that," he said.
Senior Editor Ben Ames contributed to this report.
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.