Mitigating Risk and Getting the Most out of Sophisticated Material-Handling Systems

Here are three ways to make sure equipment and technologies stand the test of time and your business strategy

Clint Lasher
Clint Lasher

Not long ago, people changed their own oil and did other maintenance on their vehicles. To be sure, some auto buffs still enjoy the thrill of do-it-yourself on their cars, but many are content with letting experienced professionals handle the job. After all, vehicles and the technologies behind them are a lot more complex than even 10 years ago.

The same holds true for the distribution center (DC). Material-handling systems are a lot more complex and interconnected. A lot is riding on these sophisticated systems in the omnichannel, hyper-personalized environments that the supply chain now finds itself in.

The application of new technologies created these sophisticated systems. While the need to get the most out of these systems seems obvious, in the rush to execute, maintenance and optimization may not always be top of mind.

How do DCs get the most out of their technologies? And how does it factor into risk mitigation?

Often, when people think of risk management, they ponder security issues—be they data breaches or compromised physical security.

But one can also argue that maintaining, optimizing and modernizing equipment to derive the most out of these systems is also a huge risk issue if not taken seriously. It can mean the difference between meeting holiday production schedules, and confronting the crises of non-functioning equipment and idle workers.

While fulfilling their missions as dynamic processing centers, companies need to think about maintaining systems for peak performance. They need to optimize these systems and pull all the right levers to maximize productivity.  

Here are three ways to make sure equipment and technologies stand the test of time and your business strategy:

1. Keep a Proactive Watch on What Systems, Technologies, Platforms and Devices Are Reaching Obsolescence

Once they spend capital and put systems in place, companies want to get the most from their investments. But they need to be cognizant of the risks facing those investments.

In 2014, Microsoft announced that it would no longer support the Window XP operating system (OS). Even though it’s been more than a year since support ended, a lot of DCs are still running material-handling equipment utilizing XP.

Even technologies like XP, largely considered outside of the material-handling industry, can impact organizations in a big way. DC officials need to track such issues. Obsolescence can come quickly.

2. Work with Knowledgeable Partners Who Can Help You Focus on your Core Competencies

It helps companies if they know what other companies are doing—in effect, industry best practices. While operations may be performing well, they need to understand their options and what effect a change in one piece of equipment can have on others. They may have in mind the next OS to deploy, but they require guidance. They don’t want to live on borrowed time.

Tapping a knowledgeable partner can take the pressure off the organization. Such partners may have the background on product lifecycles; a valued partner also may know the life expectancy of your OS, servers and scanners, and what is no longer supported by manufacturers. They have such knowledge in advance and the wherewithal to look across systems.

Some companies continue to use obsolete hardware. Doing so means that replacement parts are no longer commercially available, and can be found only on eBay or from similar sources. They continue to use old hardware because changing it means upgrading or replacing the proprietary controls software running the system. While there is capital required to replace or upgrade software, it can often be less than anticipated or the upgrade can be justified when compared to the cost of system downtime during peak times. The experience of a trusted partner can bring such knowledge to bear. Newer software systems also offer many key benefits, including increased visibility, enhanced data collection and reporting.

3. Train New Workers so They Can Get the Most out of Equipment and Devices

Amazon recently announced the hiring of 6,000 workers for its DCs. To maximize output, DCs need to properly train incumbent and new staff to maximize their productivity, and ensure their commitment to company policies and business objectives. According to a recent report from Deloitte, just 38 percent of executives indicated that they are extremely or very confident that their supply chain organizations have the competencies necessary today. While newer systems make things simpler and ensure better user experiences, the findings of the report underscore just how much DCs need to ensure that workers use equipment wisely toward maximizing supply chain effectiveness and managing risk.

In one situation, a client with similar receiving systems in multiple DCs discovered that performance varied from site to site. Variations in performance often result from operational differences. Worker turnover and peak season demands drive the need to analyze operations and retrain personnel for maximizing the performance from technology. A strategic approach to worker training should be a key part of those plans.

While risks will always confront distribution centers, they need not be feared. Sound strategies for maintaining, optimizing and modernizing material-handling systems can reduce a lot of the peril in today’s DC and go a long way toward ensuring a smooth ride in the supply chain.

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