Supply Scan

Companies Find Value From Automated Systems: Survey

The Integrated Systems and Controls (ISC) Council of Material Handling Industry of America (MHIA), Charlotte, NC, has released the second in a series of automation reports titled Sentiment Towards Automation in Warehousing, Distribution and Manufacturing.

Looking over the survey as a whole, several key takeaways important to the material handling and logistics industry emerge:

  • There is a high degree of satisfaction among users of material handling automation: Eighty-one percent of manufacturing respondents and 86 percent of warehousing/distribution center respondents are satisfied, very satisfied or extremely satisfied with their systems.
  • More than 90 percent of users report that automation is an asset to their operation, a career enhancer and a competitive advantage to their company.
  • Of these facilities with automation, 76 percent plan to add more automation in the next 18 months.
  • Despite a challenging economy, 61 percent of manufacturing users and 53 percent of warehousing/distribution center users say current business conditions are influencing their plans to buy more automation hardware. Meanwhile, 42 percent of manufacturing users and 50 percent of warehousing/distribution center users say the economy is influencing their decision to buy software.

Among non-users, however, the perceived cost of automation is still the number one reason why non-users say they have not considered automation or considered and rejected plans to automate (53 percent). Forty-seven percent (47 percent) say automation is tough to justify to top management.

Still, roughly a third of non-users believe that automation may be considered for their facilities in the next 18 months due to increased sales, business growth and an improved economy.

According to the survey, automation has made inroads in every department in manufacturing and warehousing/distribution facilities. In both instances, automation is most prevalent in processes with a high labor component. These include order picking, shipping and order consolidation in warehousing/distribution and the production line, finished goods handling and assembly cells in manufacturing.

However, there are still barriers to justifying and implementing an automation project. Respondents were asked to identify the leading drivers influencing their decision to invest in automation and the leading deterrents that are preventing them from investing in automation. Respondents focused on the economic benefits that go directly to the bottom line of their operations, including cost justification, labor savings, return on investment (ROI), time savings, increased productivity and the economy.

Hanson Logistics Adds
Refrigerated Service To
Velocities MVC Program

Hanson Logistics, a provider of temperature-controlled logistics in St. Joseph, MI, is expanding its Velocities Multi-Vendor Consolidation (MVC) program to include exclusive refrigerated service.

The exclusive refrigerated service assures processors that their products will not be co-mingled with frozen products in the same trailer. By sharing trailers set specifically to hold temperatures between 34­F to 38F, refrigerated food shippers are assured a “protect from freeze” environment while still receiving high quality, on-time delivery.

Hanson says its Velocities MVC has the critical mass to build consolidated truckload shipments among multiple vendors for collaborative distribution through the United States

“Our emphasis on food quality and safety extends from our warehouses out to final delivery,” says Andrew Janson, president, Hanson Logistics. “The volume, process and assets are in place for refrigerated food shippers to achieve the same cost benefits as shippers in a frozen consolidation program.”

Velocities MVC is a temperature-controlled distribution program that leverages Hanson Transportation Management Services and the strategic location of the Chicago Consolidation Center, in Hobart, Ind. The collaborative solution offers cost-effective distribution reaching national retailers and food-service DCs with highest Must-Arrive-by-Date (MABD) metrics.

“Exclusive Refrigerated Service eliminates the uncertainty faced by refrigerated food shippers that pool in bulk-headed frozen freight consolidation,” Janson says. “In addition to the proper environment, our refrigerated-foods customers are tapping into an established distribution program that helps reduce transportation and administration costs, while delivering accurate orders on time.”

Swiss Valley Farms
Deploys Solution To
Expand Globally

Swiss Valley Farms, a four state dairy cooperative with 1,000 members and annual sales in excess of $300 million, has deployed a solution from Atlanta-based Logility Inc. to improve forecast accuracy and help the company expand into new international markets.

Logility’s Voyager Solutions help drive efficient sourcing and production by automating the complex process of predicting market demand.

Davenport, IA-based Swiss Valley Farms, founded in 1958, has relied on manual Excel-based forecasting to develop production schedules, sales and marketing efforts and provide executive-level reports. This process slowed the company’s ability to expand into new markets such as Asia and South America, two burgeoning regions for dairy products.

Voyager Solutions will automate the forecasting process and enable Swiss Valley Farms to produce and distribute its quality dairy products in new international markets such as China.

“We pride ourselves on providing premium specialty cheeses suited to the unique needs of our customers,” says Jeff Saforek, vice president of sales and marketing, Swiss Valley Farms. “Logility Voyager Solutions will help us deliver on this promise as we grow Swiss Valley Farms and expand into new markets. In addition, we can now be more proactive in our planning and tightly align our product forecasts with our business plan to make our supply chain a key strategic asset to the company.”

Voyager Solutions provides access to reports and metrics that allow companies like Swiss Valley Farms to generate and track forecasts for multiple business needs including sales, marketing, logistics, and financials. In addition, moving away from Excel-based spreadsheets to the intuitive Voyager Solutions suite minimizes the potential for data entry and re-entry errors and boosts analytical insight.

U.S.-Mexico Cross-Border
Trucking Agreement Reached

The American Trucking Associations said it supports the announcement of an agreement in principle between the governments of the United States and Mexico to implement the long-delayed cross-border trucking provisions of the North American Free Trade Agreement.

“ATA is pleased that Presidents Obama and (Felipe) Calderon and their administrations have worked through their differences and have put our two countries on the path to resolving this issue after nearly 16 years,” says Bill P Graves, ATA president and chief executive officer. “We hope this agreement will be a first step to increasing trade between our two countries, more than 70 pecent of which crosses the border by truck.”

The agreement upholds previous requirements for Mexican trucks operating on US highways, notably that Mexican fleets apply for and receive authority from the Federal Motor Carrier Safety Administration; demonstrate they meet the same safety standards as US fleets; and that those trucks are prohibited from hauling freight between destinations within the United States.

“When properly implemented, NAFTA’s trucking provisions should evolve to allow for a more efficient, safe, and secure environment for cross-border operations between the United States and Mexico,” Graves says. “Ensuring a level playing field requires that both countries establish permitting and regulatory processes that are clear and transparent to ensure that carriers from both countries are treated equitably.”

Mexico is the second-largest export market for the United States. ATA hopes lifting the retaliatory tariffs imposed after Congress abolished a previous cross-border trucking pilot program in 2009 will help the two nations resume more normal trading patterns and increase the flow of commerce between the two countries.