News Briefs

Propane Gains Respect

The announcement that the California Air Resources Board (CARB) would outlaw the use of internal combustion engine powered lift trucks of 8,000 pounds capacity and below stirred a variety of efforts by the Propane Vehicle Council and the Industrial Truck Association.

These efforts resulted in incremental victories for these organizations. Last month MHM reported the latest State Implementation Plan Revision Document included language taking into account the feasibility of converting from internal combustion engines (ICE) to electric vehicles.

"... However, electric lift trucks may not be suitable for 100 percent of applications due to operation requirements such as specific terrain challenges or extreme hours of use," reads the document. "Consideration of operational feasibility and economic impact to operations will enter into regulatory development."

As we go to press, CARB has removed the controversial restriction from the implementation plan. Brian Feehan, executive director, Propane Vehicle Council, says the effort to make the organization listen to reason paid off.

"We’ve shown CARB the emissions claims it was making with that particular measure weren’t correct. The proposal itself would have unintended consequences," he explains. "Some users might move to larger [ICE] equipment and run it longer. Or perhaps they would consider holding onto their existing equipment longer to avoid the ramifications of a proposal mandating electrics for new purchases.

"Bringing all those things to bear, we were able to show CARB that its proposed measure may have more of a damaging effect on the environment."

Feehan admits the battle may not be over. The actual legislation has yet to take its final form. He isn’t ruling out the possibility that CARB could throw in another surprise.

"We need to keep the pressure on. As they implement new regulations, based on what’s in the draft implementation plan, we’re with them every step of the way," he concludes.

Meanwhile, the Propane Education & Research Council and Propane Vehicle Council are taking environmental action of their own. They’ve introduced Technician Maintenance & Training Program for Class 4 and 5 Propane-Fueled Forklifts. The comprehensive training program will begin in California, Illinois and Texas. It provides participants with a free air-fuel meter exhaust gas analyzer to ensure accurate emissions monitoring.

"Lift truck users have expressed tremendous interest in having access to an industry-approved maintenance and training program," says Roy Willis, PERC president. "This program satisfies that interest. It provides the skills they need to effectively maintain and test equipment to ensure compliance with emissions standards, deliver improved performance and obtain maximum fuel economy."

"This program has great potential," adds William H. McGlinchey, co-developer of the program curriculum and president of AFV Consulting LLC. "We estimate a minimum 200 to 300 companies will secure training during the first year. Potentially, that translates into improved maintenance and performance of 5,000 to 10,000 forklifts."

For more information contact Greg Kerr or Stuart Flatow, Propane Education & Research Council, (202) 452-8975.

Tom Andel, chief editor

Reverse Online Auction Survey

In late March, the B2B Research Center conducted an online survey to gauge opinion on the growing use of reverse online auctions for the purchase of material handling systems, equipment and supplies. The survey sought to understand the motivations, challenges, experiences and attitudes of buyers and sellers using and planning to use reverse auctions in their purchasing and selling practices.

Of all respondents, 19.6 percent said they use auctions; 20.5 percent said they plan to use them, and 59.9 percent said they did not. Survey data indicated that more buyers than sellers were planning to use reverse auctions, suggesting continued buy-side pressure to implement this form of purchase.

--Respondents who used or planned to use reverse auctions were asked to specify the goods and services they have or will be buying or selling with the auctions. Equipment (74.4 percent) was the number one selection for this question, outpacing parts (33.5 percent) and systems (32.7 percent) as the next two selections. Buyers said they used auctions for parts (44.3 percent) compared to far fewer sellers (16.3 percent) who said they used auctions for parts. Sellers also selected support and engineering much less than buyers, while systems as a selection was about equal.

-- Respondents who said they used reverse auctions said on average that they started in 2001. Those planning to use them said on average their target year was 2004.

-- Overall, the survey results indicate clear acrimony on the issue of reverse online auctions on behalf of material handling sellers, and a relatively neutral opinion of them by buyers.

Warehouse Space, Productivity Tool

The Carousel and Vertical Lift Module Group of the Automated Storage/Retrieval Systems Product Section of the Material Handling Industry of America announced the availability of a new computer-based tool to evaluate automation in the warehouse. The tool, Throughput Models for Carousels and Vertical Lift Modules, was created to help organizations determine how their warehouse space and personnel can be maximized using the latest automated storage and retrieval systems.

Using either a networked PC or laptop computer, this easy-to-use tool asks a series of questions and allows the user to compare the number of units, floor space and man-hours required to accommodate the facility’s needs. The tool can be used to solve questions in specific work areas and zones or total facility requirements.

The automated systems being evaluated include horizontal and vertical carousels and vertical lift modules. These systems often increase productivity by two-thirds while reducing floor space requirements up to 75 percent. These efficiencies, plus reducing inventory levels and increasing inventory turns, often allow these systems to have a return on investment under 18 months.

The tool is free for download from the MHIA Bookstore at: www.mhia.org/bs/cvlm/. It can also be purchased on CD-ROM, $19.95 via the on-line bookstore or by calling the MHIA Literature Department at 800-345-1815.

Association Name Change

Automated Materials Handling Association is the new name of the former ASRS/AGVS Users Group. For a brief time it will show a small subtitle of the former name. The association’s new business manager is John Collins. Sam Powell is now president.

Wal-Mart Takes RFID Lead

Speaking at Retail Systems 2003 in Chicago, Wal-Mart’s senior vice president/CIO of the Information Systems Division, Linda Dillman, outlined steps toward wider deployment of RFID technology throughout its global supply chain.

Wal-Mart will start with its top 100 suppliers, who will be expected to start deploying RFID technology at the pallet level in January 2005. During the next five years there will be a phased roll-out, from pallets to cases to items. Before that, there will be several briefings with suppliers as well as implementation trials. Dillman challenged RFID tag suppliers to bring the cost of their products down to five cents or less for item-level applications and to 25 cents or less at the case/pallet level.

This long-awaited announcement is viewed as powerful validation of RFID technology, and a crucial jumpstart for the industry. It is expected to increase RFID volumes, reduce costs and accelerate adoption.

The first demo of the Electric Product Code (EPC) network will be this September15-17 at the Auto-ID Center’s EPC Symposium at Chicago’s McCormick Place. The symposium will make the case for adoption, discuss implementation and outline the EPC technical architecture. Call 800-669-1668 or go to www.epcsymposium.com/register.

Clarification of TCM Business Relationship

The following information was received from TCM regarding the manufacture of its lift trucks. "During the past few years, forklift trucks built in mainland China have been distributed in the U.S. under a number of trademarks, including King Lift and Heli.

"Anhui Heli Co. Ltd., a Chinese national company located in the city of Hefei, has in the past and currently manufactures King Lift and Heli lift trucks. These brands have been distributed, or are being distributed in the U.S. by Heli Forklift Wholesale Inc. a subsidiary of that manufacturer.

"Regrettably, in the past, these lift trucks may have been represented and sold as "Chinese TCMs." This implies a similarity or duplication between Anhui Heli products and TCM products, but nothing could be further from the truth.

"TCM did in fact support modernizing lift truck manufacturing facilities in China including Anhui Heli through its holding company, Anhui Forklift (group) Corp. This was done under the technology transfer agreement according to Chinese government requests from 1985 to 1993. Then, TCM and Anhui Forklift (group) Corp. founded two joint venture companies, one for manufacturing and distributing TCM brand lift trucks for sales in China under a TCM brand name, another for producing basic lift truck component counter weights. A new factory has grown out of this joint venture, and it may possibly produce lift trucks in the future for sale in Asian countries neighboring China.

Wireless Technology News

A survey conducted by RFID Journal and Allied Business Intelligence, examined the use of radio frequency identification (RFID) by retailers and manufacturers. Six out of 10 end users surveyed said that radio frequency identification or RFID item-level tracking, offers the most benefit to their companies.

The survey, released at RFID Journal Live!, was fielded by the conference’s co-producer, RFID Journal, and conference research partner, Allied Business Intelligence (ABI), a New York-based research firm.

While 60 percent of RFID end users surveyed said they are interested in item-level tracking, a little more than half said that they planned to deploy RFID for tracking assets within their organization, and almost as many say they’ll use RFID to track work-in-process.

Obstacles remain to RFID adoption. When asked what prevents their organization from more aggressively adopting RFID, nearly three in 10 end-users said that the cost of tags — which today average 50 cents or higher — is the primary hindrance. Nearly an equal number of respondents indicated that the next most significant barrier includes end-users’ uncertainty regarding standards and the costs of integrating the technology into existing systems.

Material Handling Shifts Into Growth Mode

Material handling equipment manufacturing (MHEM) is shifting into a growth mode. On a quarter-to-quarter basis, compared to the same period one year before, MHEM is growing at a rate of more than eight percent. And it continues to move steadily along a forecasted line of improvement of seven percent to eight percent on an annual basis by year end.

The MHEM Forecast is produced quarterly by Material Handling Industry of America and serves as a good proxy for the material handling and logistics industry on this subject. MHEM represents more than $20.0 billion or approximately 30 percent to 35 percent of our estimate for US material handling consumption of nearly $65 billion.

The Manufacturer’s Alliance also indicates key information about our material handling end-user segments. The industry segments most likely to be active over the next year are associated with the decelerating decline and accelerating growth phases. By second quarter 2004, those segments currently in the decelerating growth phase will have moved into the accelerating decline phase.

For an overview of industry activity through the current quarter, please read the MHEM Segment Brief that includes a series of charts, tables and discussion points. The complete MHEM quarterly forecast is available to MHIA members for $40 and to non-members for $195. The Forecast can be ordered on-line at www.mhia.-org/membersonly for MHIA members and www.mhiastore.org for non-members. For more information, contact the MHIA Literature Department at [email protected]

Amazon.com Launches New Services Subsidiary

Amazon.com will offer its own Web commerce platform as a turnkey service to other retailers according to NewsFlash, an on-line news service of the Delphi Group (www.delphigroup.com). The new program involves creation of a new services division to provide e-commerce and fulfillment outsourcing.

What is most notable, says Delphi, is the realization of an objective (should Amazon be successful) shared by an increasing number of CEOs and feared by an even larger number of CIOs — the transformation of IT from a cost center to a profit center.

In this move, Amazon furthers its role as a technology innovator first, retailer second. The online retailer-cum-outsourcer is said to have spent $1 billion to date and spends $200 million annually on technology. This places its IT budget in a class with the largest firms in the world, and rivals what any firm spends specifically on Web commerce capabilities.

Supply Chain’s Effect on Performance

APICS, The Educational Society for Resource Management, and Protiviti Inc., a risk consulting and internal audit firm, announced an alliance to bring supply chain risk-management thought leadership to the business community. To mark the launch of this alliance, APICS and Protiviti released a white paper for logistics professionals: Capitalizing on Sarbanes-Oxley Compliance to Build Supply Chain Advantage: A Back-to-Basics Approach to Internal Control and Supply Chain Integrity.

The Sarbanes-Oxley Act (SOA) requires officers of public companies to certify various representations regarding the fairness of financial statements and the effectiveness of disclosure controls and procedures. Section 404 of SOA requires management to file an internal control report with its annual report. The report must articulate management’s responsibilities to establish and maintain adequate internal controls over financial reporting at year end, and management’s conclusion on the effectiveness of these internal controls.

"Businesses [have] lost their competitive advantage due to management’s inability to retain control and the inefficient, unpredictable and chaotic nature of the supply chain process," the report’s authors note. "Ineffective supply chain operations not only drive inefficiencies but also increase the likelihood of financial misstatement."

Although Section 404 focuses on internal controls over financial reporting, the fundamental approach to achieving compliance has a complementary impact on supply chain infrastructure design, transaction integrity and reporting measures, both in a financial and operational nature. For supply-chain-related processes, the suggested approach begins by defining and linking six supply chain components: business strategies and policies; business processes; organization and people; management reports; models and methodologies; and systems and data. Users are also advised to document and assess critical supply chain processes, design and implement controls, and report on the final state.

The final SOA Section 404 rules were adopted by the SEC May 27. If your company is listed and must comply with the accelerated filing requirements, you will need to comply with the new rules by your fiscal year ending on or after June 15, 2004. Managers will want to position their companies to send a positive message to share holders, analysts and others about their commitment to reliable and fair financial reporting. Electronic copies of this paper are available at www.apics.-org. Proviti will present the paper at the upcoming 2003 APICS International Conference and Exhibition, October 6-9, in Las Vegas.

Managers Making News

Alvey, an FKI Logistex Company, has announced the appointments of Tony DiNello as director of Midwest regional operations and Jeff Cortez as operations manager, Midwest region. FKI Logistex Real Time Solutions, an FKI Logistex member company, announced the appointment of Bill Hubacek as vice president, sales and marketing.

Jim McDonald joins Versa as senior vice president of sales.

Liberty Carton Company, a division of Liberty Diversified Industries (LDI), announced that Steve Helmstetter has been named general manager for the Minneapolis metro area. He is heading up the Golden Valley and Brooklyn Park facilities.

Motion Industries Inc., a wholly-owned subsidiary of Genuine Parts Company, has named Ellen Holladay senior vice president information technology and director of operational excellence.

Psion Teklogix has appointed Anne Sauvé to the position of director of global marketing communications.

Boston Rack and Wire announced that Scott W. Gilmour has joined the company as vice president of sales and marketing.

RedPrairie Corporation has aligned its organizational structure to provide enhanced cross-functional support for driving customers results. Susan Rider, customer development leader, will lead sales, marketing, strategic accounts and channels & alliances. Jim Hoefflin, product management and strategy leader, will head R&D, product management and strategy, quality assurance and analyst relations. Mike Schoenfeld, customer implementation and services leader, will lead account management, implementations, consulting and the customer support center.

At Orbis, Robert Reynolds has been named director of material logistics, and Bill Ash as corporate controller.

Companies Making News

Cattron Group Inc. has been acquired by senior management. Founder and chairman Jim Cattron resigned as chairman and sold his interest in the company to senior management and Weatherly Private Capital LLC.

Printronix Inc. announced a technology alliance with NiceWare International LLC, a leading supplier of printing software for automatic identification and data collection. This is the first in a series of software alliances to promote Printronix’s capabilities for the support of wireless printing applications in the fast growing mobile computing market.

Letters to the Editor

Hi, Tom:

Actually, when I opened the June MHM issue, I thought you guys had perfected the reader-personalized editorial with the "Dear Art." [An Open Letter to an Old Friend, June 2003, p. 3.]

After reading through, I couldn’t agree more. I’ve been railing against solutions in search of problems and technology overkill for a while, now. My panel discussion at WERC [Warehousing Education Research Council] in April focused on a KISS approach to warehousing technology. And, our (my) piece for the MHM handbook this year describes simple approaches to solving MH needs.

Many of us have been talking for quite a while about the failure of technology investment to deliver commensurate results. Maybe the message is getting through.

Best regards,

Art Van Bodegraven

Partner Emeritus

The Progress Group, LLC

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