Peek behind the mask
By Tom Andel, Editor in Chief -- Modern Materials Handling, 10/1/2008
Materials handling systems suppliers are going to heroic lengths to solve customer problems these days. Part of that is because companies like yours are cutting their vendor lists and those vendors are looking for ways to stay “relevant,” if not heroic. An investment banker with expertise in the materials handling sector told me there's a lot of pressure on these suppliers to be invaluable members of your team (see “When outsiders become insiders”).
“Technology is enabling remote monitoring and sensing of systems out in the field for an affordable cost,” says Jim Lavelle, managing director and co-head of the Industrial & Environmental Technologies group for the investment banking firm Houlihan Lokey. “Customers have been pruning their manufacturing staffs and now they want to focus their resources on their primary business and have their systems managed and supervised and maintained by outside vendors. The services side will be a very nice supplement for this sector.”
It makes sense: As materials handling systems become more sophisticated, downtime will be harder to afford. Every hour down can be another thousand bucks off your bottom line. Materials handling will always be a capital expenditure type of industry, but Lavelle thinks the emerging service aspect will help buffer it from large swings in the business cycle.
That's great news for customers like you, but this business model makes you more than a customer. You're an employer, and it's important to screen those service providers as carefully as you vet your own employees. You'll be entrusting them with your most precious commodity: information. As I mention in the article, vendors can now access entire industrial networks, including the control system and the WMS—if you let them. Some vendors can alert you to potentially disastrous trends involving your system. When that happens, vendors can become your heroes.
But watch out for “Munchausen's at Work.” This is a variation of Munchausen's Syndrome, a mental disorder characterized by someone acting as if they have a sickness, but in truth, they cause the symptoms. “Munchausen's at Work” is being studied by Georgia Tech researchers, under the guidance of Professor Nathan Bennett. It involves people who cause workplace problems so they can take credit for solving them. Bennett admits this is a “low base rate phenomenon,” but there have been enough cases to merit study.
Munchausens aren't likely to be on your vendor's team. They wouldn't last long competing with the real heroes in the materials handling industry. So if you have a rash of problems in your plant or DC and a superhero emerges from your organization to solve each and every one, keep an eye on them. Their heroism may be a disguise. Trick or treat.
View All On-Demand Webcasts
