Running On Empty
All you gasoline-dependent SUV drivers, take a look in the rearview mirror. Something is catching you. Students from frigid Fargo, North Dakota, outpaced their California counterparts in the American Solar Challenge. A solar-powered racecar team from North Dakota State University triumphed over teams from schools more readily identified with the sun’s rays, like the University of California at Berkeley and California Polytechnic State University in San Luis Obispo. The 10-day, 2,300-mile American Solar Challenge took the NDSU students from Chicago to Los Angeles along historic Route 66 and is the longest solar car race in the world. Where’s the material handling connection? The winning North Dakota State vehicle, named Prairie Fire GT, was powered by an electric motor built by a conventional electric motor manufacturer, Bodine Electric Company of Chicago. The Bodine Electric e-TORQ motor is a patented high-torque industrial servomotor, typically used in packaging machinery.
And on the other side of the pond, ABB drives and motors, used to power loads in virtually all industry applications around the world, are providing the power conversion needed for the main drive system in a new challenge to the world electric land speed record. ABB’s new ACS800 AC drive converts the 600V DC output from four packs of lead-acid batteries in e=motion, a new electric car designed in Britain, for the two 50 horsepower (40 kW) IP23 through-ventilated AC motors that power the car.
The Innovators Are Coming
Material Handling Management’s Innovation Awards won’t be handed out until March 2004, but you’ll be learning more about them in the next few months.
First, in the October issue, MHM will feature a case history on DaimlerChrysler’s Twinsburg, Ohio Stamping plant. DaimlerChrysler overcame significant obstacles to make automation work in this 45-year-old facility. The innovator behind this effort is Conrad Hawley, production control manager. He and his team showed their company how it could use the latest generation of automatic guided vehicles in a building with narrow aisles, irregular woodblock floors, and an automation-shy workforce.
Then in November, MHM will profile Hawley and the rest of MHM’s 2003 Innovators. There are two other categories beside our current-year innovators: Material Handling Pioneers and our Innovator Of The Future. For more information on all our winners, visit www.total-supplychain.com and look for the news story on MHM’s Innovators.
These winners will be celebrated at our Awards Program in Cleveland on March 30th, 2004, at the same time the Material Handling Industry of America will be in town for the NA 2004 Show and Conference. The Platinum Sponsor for MHM’s awards will be Crown Equipment Corporation, recently recognized as a Best Practices leader by Industry Week magazine (see IW’s September issue or go to www.industryweek.com).
For more information about attending MHM’s Innovation Awards, or to nominate someone for next year’s program, contact MHM chief editor Tom Andel at [email protected]
RPCC Selects Officers
The Reusable Pallet and Container Coalition (RPCC) has elected new officers. They are:
• President, Allan Wasserman, Orbis;
• Vice President, David Russell, IFCO Systems;
• Secretary/Treasurer, Norm Stipp, ArcaSystems;
• Director, Patrick Cotter, WorthingtonSteelpac Industries;
• Director, Eric Frederickson, IPL Products Ltd.;
• Director, David Rodgers, Hays Container Services.
Wal-Mart: “RFID for All!”
Wal-Mart has raised the stakes in its radio frequency identification (RFID) challenge by announcing that all suppliers will be expected to put RFID tags carrying Electronic Product Codes (EPCs) on pallets and cases by the end of 2006. As Material Handling Man-agement reported recently, the retail giant initially announced that this mandate would apply only to its top 100 suppliers — by January 2005. However, this new announcement is sure to make even bigger waves.
Another industry trade publication, RFID Journal, surmises that this news might not cause the same tumult as the first announcement.
“That’s because smaller suppliers may be able to move more quickly to tag their limited number of stock-keeping units (SKU) than large suppliers, which may have hundreds of SKUs, each with different RF properties,” the Journal reported. “And they have an extra year to learn how to deploy the technology for their own benefit.” Wal-Mart plans to hold a gathering for its suppliers in the fourth quarter to provide more details on how it expects them to tag pallets and cases. Some of the larger suppliers are concerned that the schedule doesn’t leave them enough time to meet the January 2005 deadline.
To help its audience analyze the implications of this announcement, MHM and the Northeast Ohio WERCouncil will co-sponsor a panel discussion at Penton Media headquarters on October 16th. Sue Hutchinson, Product Manager, AutoID, Inc. U.S., the subsidiary of the Uniform Code Council working on the commercialization of the EPC, will be a featured speaker, along with representatives from Procter & Gamble, Kraft Foods and Pfizer Pharmaceutical. These suppliers will discuss the ramifications of this mandate on their supply chains and how managers can best prepare themselves.
MHM will have a full report on this forum in its December issue. For more information on the event, contact chief editor Tom Andel at [email protected]
ARC Releases Acquisition Planning Study
Time-to-market (TTM) for a new product is a primary success metric in a broad range of manufacturing industries. Whether the impetus is to capture more of existing demand, be the first to exploit a new market trend, beat competitors to market, access a new customer base, or simply to generate revenue from a new product idea, the ability to achieve rapid TTM is a key measure of success for manufacturers. Achievement of this goal is continually affected, however, by delayed production startups caused by increasingly software-intensive plant systems.
The complexity and sheer volume of software content in today’s plant floor systems is increasingly influencing new product time-to-market. Mushrooming horizontal and vertical integration requirements driven by production-level scheduling, routing, tracking, quality, and regulatory systems, plus supply chain management, ERP, and other enterprise applications compound the issue. These escalating requirements are contributing to the need for Best Practices in Acquisition Planning for Software-Intensive Plant Systems, a new best practices study from ARC Advisory Group. This research was drawn from a survey of manufacturers and their system providers plus activities in government, academia, and industry. The survey related to the important and pivotal implementation of Best Practices in acquisition planning for software-intensive systems.
“The good news is that the preponderance of contributors to software failure are not technical in nature,” says Chantal Polsonetti, vice president, ARC Advisory Group and lead analyst on this report. “This is in spite of the vast amount of hardware, software and communications technology employed in today’s production control systems.”
Instead, the methodology surrounding acquisition planning and execution is the leading determinant. Non-technical contributors to the problem include poor, incomplete, or improperly managed requirements or planning, lack of user involvement, improper resource allocation, lack of executive support, and a host of internal and external communications issues. Further information on this best practices study can be found at: www.arcweb.com/research/auto/bp-swacq.asp.
Letters To the MHM Editorial Board
I just completed my July issue of Material Handling Management. In the Strategy Session under the heading of Warehouse and Distribution, I was surprised that not one of your panel members mentioned computer modeling in relation to how many and where to locate facilities. “Fewer is better” and the number we have “seems to work” almost encourages your readers to rely on gut instinct rather than a more analytical (and accurate) approach. The best run DC in the world can be costing a company millions in transportation or sub-optimizing customer service without a company even knowing it. These factors, along with inventory, local taxes, real estate, labor costs, etc., must be evaluated together to come up with the best alternative. The implication is that these companies have all gone through major transitions of their distribution network in the recent past apparently without benefit of a strategic network model.
It is hard to believe that these sophisticated companies would not have used modeling support, and perhaps the focus of the article de-emphasized this issue.
Supply Chain Engineering Department
Schneider Logistics Inc.
We forwarded your letter to the roundtable participants, now also known as MHM’s Editorial Advisory Board. Here are their responses:
David Rogers, vice president of logistics for Rockwell Automation: “We did model the locations of our DCs in the U.S. and Europe. We did this ‘in-house’ with spreadsheets and an Access database, consolidating from three manufacturing warehouses in the U.S. to one distribution center. Savings were significant. The change was instrumental in cutting our U.S. logistics costs by 50 percent as a percentage of sales.”
Gregg Schwerdt, distribution manager for Procter & Gamble: “We do indeed validate all of our options for sourcing warehouse locations, utilizing a few different modeling programs. These have been extremely valuable in identifying specific sourcing scenarios, such as where to put a distribution warehouse, selection of a contract manufacturer, etc.
“The specific comment on ‘fewer is better’ is in relation to the complexity and risk that multiple sites involve. This is one portion that modeling really does not deliver. There are numerous other factors that play into a distribution strategy that modeling struggles with, like availability of transportation modes, state/local legal requirements for storage, disposal capabilities, changing customer offerings and time. Especially in the customer delivery side of the game, models tend to work in miles, not in hours, since they really are just big number-crunching programs. There is a very big difference in time going between Baltimore and New York City from 8 p.m. to 8 a.m. versus 8 a.m. to 8 p.m.”
Roger Huff, plant operations manager, N.A. Powertrain Operations, Ford Motor Company: “In our business, we are sourcing material all over the world, and the utilization of strategic, well-placed, full-service warehousing facilities is critical to our business success. We utilize both strategic analysis tools as well as site assessment models in determining the number and optimal location of our warehousing solutions.” (Continued on page 8)
Gerald Moultry, vice president, field operations, Pharmaceutical Distribution, CardinalHealth: “We have not used computer modeling to determine our network for a couple of reasons. First of all, we grew through acquisition, therefore, in many cases those decisions had already been made and all we had to do was tweak the existing network. Secondly, I agree with Mr. Jeray when he mentions the areas that have to be evaluated; however, I don’t think you have to have specific modeling software to get the answers you need. We have our own internal models that we use to help make these decisions. When you are managing basis points you have to continually look for ways to improve your network and you have to know what levers to pull to get the desired results.”
Jeff Levine, senior vice president operations, Pioneer-Standard Electronics, Inc.: “Computer modeling has various meanings to organizations. I am not aware of a software program that allows input of all the critical factors that are analyzed to determine the correct number of distribution facilities needed to meet organizations’ requirements. However, I believe most if not all organizations review and analyze the critical factors in addressing the number of locations, feasibility of geographical locations, tax abatements, transportation routes and labor markets.”
WERC Reports on Benefits
The Warehousing Education and Research Council (WERC) has released its 2003 edition of Warehousing Benefits Programs: A Survey of Industry Practices. The 46-page executive summary details many aspects of benefits programs across the warehousing industry. Revised for ease-of-use, this is a graph-oriented report that highlights the data received from a survey of WERC members. For more information, visit www.werc.org.
Cost Estimating Guide Released
The AGVS Product Section of MHIA has released its 2003 Automatic Guided Vehicle System Cost Estimating Guide, to help determine the total cost of an installed system based on a choice of various categories of vehicles, functionality and complexity. The guide is to serve as a starting point for developing budget pricing. For more information, visit www.agvssolutions.org.
Getting It Right
Our apologies to TrenStar for misspelling its name in the report of DC Expo, July 2003.
Raymond Enhances Web Site
The Raymond Corporation has launched a new Web site, www.raymondused.com, to sell used Raymond lift trucks. The Web site allows users to search available units by model year, price and other criteria; choose from a variety of available models; and order online. After ordering, the inquiry is passed to a Raymond dealer close to the buyer to complete the purchase and arrange delivery and installation.
The company said that all lift trucks sold through the website are backed by Raymond dealers.
MHM Names Managing Editor
Material Handling Management announces a significant change to its staff. Alex J. Koleszar is our new managing editor, replacing Christopher Trunk, who has left to pursue a career in counseling. Alex has strong writing and managing credentials. For the last two years, he’s been a freelance writer/editor, working for industry clients in the Northeast Ohio region. He has worked as an editor at Advanstar Communications and has done public relations and marketing for WCPN/Cleveland Public Radio, MetroHealth Medical Center, and the Academy of Medicine of Cleveland. Alex has a B.A. in Communications and a minor in English from John Carroll University.
Tax Relief Act
If you’ve been waiting for the economy to turn around before initiating capital spending, wait no longer. Investing in necessary capital equipment or software now can result in substantial savings on tax payments.
Karen Spuckler, senior consultant, Sedlak Management Consultants, has created a report illustrating the impact and advantages of the special depreciation allowance within the Job Creation and Worker Assistance Act of 2002 and Jobs and Growth Tax Relief Reconciliation Act of 2003. Significant reductions on your 2003 and 2004 taxes can be taken for qualified purchases of capital equipment made through September 11, 2004.
For a full copy of this report, contact [email protected], or visit Sedlak on line at www.jasedlak.com.
Managers Making News
W.A. Schmidt Inc. has hired Kim Wanamaker as general manager/vice president of sales and marketing. Wanamaker spent the previous three years with Drexel Industries LLC. where he was vice president of marketing and sales.
SJF Material Handling Inc. has named Jack Lehr (formerly with W & H Systems) to head up its new systems integration arm, Genesys Systems, located in East Hanover, New Jersey.
Rhino Aluminum Pallet, announced that Steve Pawela has joined the company as director of sales and marketing.
Paul Witt has been appointed Omron Electronics LLC’s strategic sales manager. Witt will oversee Omron’s Strategic Accounts team, along with the Omron Systems Integration business, Software Solutions group and Inspection Systems group.
ORBIS Corp. has promoted Jim Kotek to executive vice president, North America. In this role, Kotek will oversee ORBIS’ business units that serve the automotive, beverage, food and industrial markets in North America.
ABB’s Dinesh C. Paliwal has been appointed as economic advisor to his excellency Huang Huahua, governor of Guangdong Province — Peoples’ Republic of China. Paliwal, who serves on the ABB executive committee and heads the group’s worldwide Automation Technologies businesses, will support the provincial government on economic issues and future development.
DACS Inc. has named Gary T. Smith PE vice president of sales and marketing, engineered products and services.
Savi Technology announced the appointment of David P. Stephens to the newly created position of senior vice president — public sector. Stephens will lead the overall strategic direction, business development, operations and sales activities of Savi’s U.S. — focused public sector team.
SDI (Strategic Distribution Inc.) has appointed Susan Eckel as director of business development.
Expected Boost for AIDC Scanners
During the last two years, growth in bar code scanner shipments has remained flat, with sales to the retail sector suffering the most — largely because of the decline in stationary POS scanner shipments. However, research supporting Venture Development Corporation’s Global AIDC Industry Business Planning Service 2003 provides evidence that global handheld and stationary barcode scanner markets will sustain annual growth of approximately eight percent through 2007. VDC anticipates the 2003 bar code scanner market will reach $1.4 billion.
According to Taylor Smith, VDC AIDC analyst, “Emerging technologies and initiatives including Sunrise 2005, the forthcoming U.S. FDA’s unit-of-use coding regulation, and the adoption of reduced space symbology (RSS) coding are expected to serve as key growth drivers for stationary and handheld barcode scanners over the next four years.” In examining the current and future AIDC scanner market, primary influential trends include:
• Pending FDA regulations sparking AIDC investment throughout the U.S. healthcare market;
• Device mobility leading end-user selection criteria;
• GTIN standards driving upgrade and replacement shipments for scanners;
• Dual-purpose RFID/bar code scanner solutions providing growth opportunities.
Alvey Systems Launches Regional Office
FKI Logistex Alvey Systems announced the opening of its newest satellite office in Scottsdale, Arizona. Alvey’s new location will serve the Southwest region of the U.S. and focus primarily on Arizona and Las Vegas. Sales engineer Tim Lasko will lead the Alvey Southwest team with support from the Alvey Western regional office in Roseville, California. “The opening of this office will enable us to better meet the needs of our Southwestern customers,” said Tom Roberts, Alvey Systems director of field operations.