TOP TRENDS AND DEVELOPMENTS OF 1998
As is our custom each December, we present our editors' annual report on the following pages. This report covers the top trends and developments in materials handling technology and techniques that we saw and covered during the past year.
By Staff -- Modern Materials Handling, 12/1/1998
Consolidation, globalization, and integration of software applications were among the trends visible in the materials handling world in 1998. Numerous equipment and technology developments occurred under the umbrella of the above three"megatrends." And, in the final analysis, people continued to be the single most important factor in materials handling systems. The scarcity of qualified people continues to plague companies, and availability of effective training programs seems to be the answer industry is searching for.The acquisitions race
Consolidations are of interest for two basic reasons. One, they tell us something about where we can continue to look for sources of supply for specific types of equipment and systems. Two, perhaps more interesting, they are an indicator of the directions acquiring companies may be taking. An example might be a company that is trying to provide a total supply chain solution by acquiring firms operating at different stages or levels of a supply chain.
Recently two companies have been particularly visible in the acquisitions race: Columbus McKinnon (CM) and HK Systems.
CM's acquisitions started out looking like a "who's who" of overhead lifting and handling products-Duff-Norton (hoists, including its Yale Hoists subsidiary), Lift Tech (cranes and hoists), and Positech (manipulators). The plot then thickened with the company's buyout of Univeyor A/S of Denmark, a leading European supplier of turnkey integrated materials handling systems. And, the most recently announced takeover was Lico Inc. and its Automatic Systems conveyor subsidiary.
The growth-by-acquisition path taken by HK Systems has been more systems oriented from the beginning. Initially an engineering/consulting firm spun off from Harnischfeger Industries, this organization first embarked on an alliance that provided an electrified automatic monorail product, which it then followed up with acquisitions of Kenway (AS/RS, AGVS) and the conveyor and systems group of Western Atlas. From this point, it began to embark upon software acquisitions to complement its warehouse management systems (WMS) product. These takeovers include Kitimat (transportation management systems or TMS) and Endura (order management systems or OMS). The aim seems to be development of a total supply-chain management solution.
Speaking of Harnischfeger, that venerable name in materials handling lost its materials handling cast with the spinoff of P&H Material Handling, a long-time supplier of cranes and hoists. The divested company has been reorganized as Morris Material Handling, and will continue to use the P&H brand.
Other notable mergers and acquisitions during the year included: Triangle Plastics' acquisition of TriEnda Corp. and Bigelow Packaging; Stone Container's merger with Jefferson Smurfit; and Videojet Systems buying Marsh Co.
Global-scope mergers included: Clark Material Handling acquiring the forklift division of Samsung (South Korea) along with buying Blue Giant of the U.S.; Swisslog Group, already having a U.S. presence with its Transnorm unit, recently acquiring Munck Automation Technology (AS/RS, AGVS). These global combinations followed the eye-opening acquisition of high-profile electric lift truck maker Raymond Corp. by BT Industries of Sweden over a year ago.
Important standards work
Perhaps less glamorous than consolidations, industry standards also took place during the year. They should help managers and engineers in their equipment selection process. One, announced at the North American Materials Handling Show in March, was a sweeping new specification for the design, testing, and utilization of industrial steel storage racks. The new document from the Rack Manufacturers Institute, called RMI '97, provides complete seismic design, updates installation and application considerations, and standards design and test methods and defaults. It was expected to become an ANSI standard in the near term.
Meanwhile, the Institute of Caster Manufacturers (ICM) has been working on a new standard. Expected to be completed soon, the document will help users evaluate the safety, durability, structural adequacy, and technical requirements for specific casters and wheels made in North America.
This has been the second year since a new performance specification for pallets was developed by the Center for Unit-Load Design at Virginia Tech. To date the document has received good marks from industry, because it addresses a particularly important problem-the quality requirements for pallets to be used in automated materials handling systems.
Any day now-in another area of standard setting-OSHA is expected to release, finally, its long awaited new regulations on training lift truck operators.
As we go to press, the federal workplace safety agency had yet to issue officially these new rules. But it seems certain that they will be much more definitive and explicit on the end user's training responsibilities than the bare bones, essentially toothless, old OSHA standard that's been unchanged since 1971.
Employers will have to have training programs to ensure that only trained operators run industrial trucks. Training will include classroom discussions, lectures, videos, and the like as well as hands-on practice and exercises on trucks. And training will have to be on the specific truck(s) and in the individual industrial environment where the employee operates the vehicle(s) for his or her employer.
Enter returnables
Getting back to pallets, the vast majority of these unit-load bases continues to be made from wood. However, plastic is making inroads in many applications, particularly in various conveying and handling applications where dimensional stability and high quality are necessary. One way some companies justify the higher cost of plastic pallets is the greater number of returns they provide, thereby making the cost per pallet trip, rather than per pallet, the number to compare.
Another issue with plastic pallets has been rackability-the ability of these products to hold their shape while edge racked. A number of suppliers are working on developments in this area. A recent entry this year was a structural foam molded, high-density-polyethelene block-style pallet. It has an edge-rack load capacity of 2800 lb, a dynamic load capacity of 5000 lb, and an advanced I-beam reinforcement system. The 57-lb pallet is reinforced using pultrusion technology, designed to provide the strength and durability needed for racking. Pultrusion imparts an extremely high stiffness to the pallet, nearing that of aluminum.
Returnability has had the greatest impact in the area of containers. Companies like Ford and Mercedes-Benz (U.S.) have saved very significant amounts of money through returnable container programs. Sources of savings have included cutting out disposable packaging, reducing product damage, improving parts density and identification, and fostering a JIT operating environment.
Containers can be thought of as one type of industrial packaging. Another is that of protective packaging, using materials to secure and protect materials being handled or shipped in containers. A recent development in this front is so-called "skinny" packaging materials that are 80% to 85% more compact than traditional materials like pre-formed polyurethane or polystyrene cushions. The bottom line is space savings, more efficient use of protective materials, and tighter inventory control over packaging materials.
Pallets team with lift trucks
Any discussion of pallets and containers invariably leads to a discussion about another workhorse-the industrial truck and especially fork lift truck. This year saw a number of developments in this equipment category.
More "user friendly" surely describes the new lift trucks rolling off today's assembly lines. From the operator's cab to the controls, from the view through the mast to the image seen looking aft, manufacturers are incorporating more ergonomics, more operator comfort features, and building in added safety functionality. And all that adds up to greater productivity from this workhorse.
Though operators still climb in behind a wheel on some forklifts, increasingly they control the new vehicles with a multi-functional joystick. "Dashboard" displays swiftly relay vital data on truck performance and any maintenance or repair issues. Styling of the trucks reflects a more modern, more rounded look as well. Rap the truck body and you'll find more plastic components where metal's greater structural integrity is not necessary.
The mix of lift trucks types-with electric vs. internal combustion (IC) power being one key dividing line among the types-continues to fluctuate. Electrics more powerful than before are helping lead to a gradual shift away from ICs. Even so, ICs remain dominant in outdoor applications and in the heavy-duty end uses.
In Europe, new reach trucks with high voltage batteries (48V or more) are powered by AC brushless motor technology increasingly. Faster acceleration, less maintenance are factors propelling this trend overseas. But importing this technology into the U.S. may need to await further technology breakthroughs to prove cost effective here. American electric forklifts with 24V or 36V systems are likely to stick to the more conventional motors now in use for the time being.
One U.K.-based lift truck manufacturer has introduced in Europe a rather radical, untraditional vehicle. It's a mastless truck that lifts loads via a rear-mounted, two-stage telescoping boom with a lifter attachment at the boom end. Again, whether this idea will reach U.S. shores remains to be seen.
Dock developments
Lift trucks and docks are natural partners. Now, U.S. end users have yet another safety device to ensure that over-the-road truck trailers can be secured at the loading dock and not drive away prematurely or unintentionally: it's an automatic, above-ground wheel chocking system that acts against the truck's rear wheels. Several European manufacturers at the Hannover Fair also exhibited similar equipment.
Another innovative approach to dock safety in the U.S. involves one American manufacturer's new leveler technology. This device has hydraulically adjustable "mini side levelers" on either side and outboard of the central, main dock leveler. With this equipment, end users who service high cube, "low boy" trailers with their wide loads-along with more conventional trailers-have greater flexibility in receiving and shipping.
Lift trucks link to storage
Another natural partnership in the plant or warehouse is that of the lift truck and storage equipment such as racks and shelving. The ongoing trend in traditional storage methods is space savings, coupled with versatility. Often those features can help you get a lot more out of existing facilities, before you even think of moving or investing in a building addition.
Cincinnati Milacron found that out when it upgraded its storage system within the confines of a World War II era building. A little research showed that many shelving units were storing as much air as parts, because they were incorrectly sized for the application. Converting to space-efficient shelving 'towers,' along with an efficient new conveyor system, bar-coded inventory, and an advanced online computer system have enabled the company to fit its 55,000 parts into 28% less space in a state-of-the art warehouse created within the old building.
The power of powered storage
The bulk of activity in powered storage lately has been with horizontal and vertical carousels and vertical lift modules (VLMs).
That doesn't mean that traditional unit load and mini-load automated storage and retrieval systems (AS/RS) aren't still being used. They are. But the focus with these systems remains, as it has for some time now, on smaller systems, closer to the point of use. And if you have an older system, then retrofits of controls, rails, and perhaps even shuttles are the story.
Powered storage as staging can take on added dimensions, however. Consider, for example, how GM uses AS/RS technology and associated software. At its Arlington, Texas plant the automaker sequences, on a 2-hour just-in-time schedule, various truck and sport utility vehicles to the assembly line with an AS/RS. Each rack position in the AS/RS holds an entire truck body. Software with EDI linking up- and downstream of the AS/RS determines which one of 176 vehicles next goes to the line from this big "mix master" of a storage system.
It is worth noting that a unique type of high-density AS/RS, developed initially in Europe, is showing increasing appeal in the U.S. These deep lane systems store pallet loads 10, 20, even 30 deep on wheeled carts. A central aisle on each level provides access to loads in storage lanes.
Several of these extremely high-density automated storage systems have been installed in the U.S. And in early 1999, Modern Materials Handling should have the first story ever printed about their use here.
Two other versions on the same idea were introduced this year. One turns standard racking into more of an automated system. Another involves a radio-controlled shuttle running in a tunnel under special racking functions as a transporter to lift and move loads into and out of the rack system. As many as nine of these shuttles can be controlled by a single lift truck operator.
The similarity is that both systems use a powered shuttle, much like the previous deep-lane system, to automatically pick up and deliver pallet loads stored in rack. Modularity is an important characteristic of these systems.
With carousels and vertical-lift storage modules (VLMs), the thrust has been on making these units more flexible and versatile for point-of-use storage and staging in both manufacturing and warehousing.
For instance, storage and retrieval speeds of VLMs, which look like a vertical carousel from the outside but operate like an AS/RS on the inside, continue to increase. Top speed is now in the 150 to 175 ft/min range, a considerable jump from the previous 65 to 138 ft/min standard.
Storage capacity of these units continues to climb too. Just last year, maximum capacity was 66,000 lbs. During the first part of this year that went up to 88,000 lbs. And now there are reports that 132,000 lb capacity units are just around the corner.
At the North American Material Handling show this spring, a dual bay VLM was introduced that uses a single control system and extractor to service both bays. The end result is a more cost effective unit and improved operator efficiency due to increased access to parts in two bays at once.
Inventory management software is also being upgraded for VLMs as well as carousels. The objective is to both improve tracking of inventory in the units and integrate that data with centralized databases managing other parts of the warehouse.
One other development of note takes vertical carousels and turns them into access-controlled point-of-use tooling storage devices. One new unit in this area provides a small footprint alternative to other tool cribs. And, a patent-pending sliding door assembly provides varying degrees of access to stored tools in accordance with an individual's clearance level. If necessary, access can be restricted to a single tool.
News about conveyors, AGVS
Any news about conveyors these days has to include sortation. Crossbelt sortation systems, for one, are becoming increasingly complex, but they provide flexibility for the end user. Case in point: Blockbuster's system at its McKinney, Texas DC actually consists of 5 subsystems capable of sorting 650 units/minute. This system can sort everything from a 4-ft box to a single video package along with music CDs and tape cassettes. That flexibility is important for an evolving business such as Blockbuster's, where the company is now starting to move into DVD movies along with its traditional VHS format videos.
This high-speed, high-accuracy system combines inducting and sorting operations into a compact configuration. Its recentering capability ensures that conveyed items are centered on the moving carrier and travel securely to their sort destination. Blockbuster has achieved nearly a 100% shipping accuracy rate moving up to 600,000 items a day to its stores.
Sortation conveying also plays a part in baggage handling systems. The new Hong Kong airport features the world's largest integrated baggage handling system, using four tilt-tray sortation systems to perform primary sorts. Integrated with those systems are four secondary sortation systems that deliver bags to staging areas for individual flights. Total time from check-in to staging areas is a maximum of 12 minutes.
Going from fixed-path conveyors to variable-path AGVs makes for an interesting transition. In a nutshell, wireless guidance has taken over AGVs. It was only 2 years ago that in-the-floor wire guidepaths dominated the marketplace. Sure, there were alternatives that worked. These included the long established chemical and magnetic guidepaths as well as laser and inertial guidance systems. But there just wasn't a ground swell among end users for these systems. They may have been much more flexible and easier to change than buried wire guidepaths, but the critical mass of confidence in non-wire systems just wasn't there.
That's all changed now. About 90% of all AGV systems installed today use either laser or inertial guidance systems. Chemical and magnetic guidepaths are still available but are not installed nearly as frequently as the other two types of non-wire guidance.
The end result is end users can start with one path and change it the day after system startup. Some software adjustments are about all that's needed to make the changes.
That added flexibility along with a strong interest in selective automation is fueling renewed growth in AGV systems. Some estimates call for 10-15% annual growth for the foreseeable future with the bulk of systems coming in with seven vehicles or fewer. Some end users are installing systems with two or three times that number of vehicles, but the bulk of activity these days continues to be in systems with 4-7 vehicles.
Warehouse management systems explode
You might say that WMS software is morphing right before our very eyes. Traditionally, these systems have managed activities and resources within the four walls of the warehouse. However, the rapidly evolving nature of supply chains-higher velocity, more changeability, and increased partnering between suppliers and customers-is forcing WMS to reach out beyond the four walls.
Last year, that started when many WMS suppliers established partnerships with suppliers of transportation management systems (TMS). That made it possible for end users to buy a WMS and TMS as a package rather than having to search for both types of software independently.
The next push is to make links on the other side of WMS with order management system (OMS) software. With this in place, the three key segments of supply chain execution systems will be linked. Several alliances have already been made with more expected to turn these concepts into reality.
The trend is not likely to stop with execution systems. There is already talk of making links with supply chain planning software suppliers. These are companies which offer well-established demand planning and forecasting software packages.
And if any of this sounds a little far-fetched from the original premise of WMS software, consider this. Market research firm AMR Research foresees 50% annual growth for supply chain software through 2002. That will put sales at $13.2 billion.
ADC trends
There are only two words that you need to describe where the most concentrated action is in automatic data capture (ADC) this year. Radio frequency. But as simple as that may sound, don't be fooled.
To begin with, the two familiar forms-radio frequency data communications (RFDC) and radio frequency identification (RFID)-have now been joined by an entirely new animal. It's known as radio frequency locator systems (RFLS) or real time locator systems as some like to call them.
These wireless inventory tracking systems operate in real time in a warehouse or on the plant floor. Quite simply, an RFLS system automatically identifies to within a few feet the exact location of all tagged assets.
Like an RFID system, an RFLS stores up to several thousand bits of data on an integrated circuit in a rugged tag. But unlike an RFID tag that must pass in close proximity to a reader for the information to be collected, an RFLS tag is automatically read at regular intervals by a reader up to 200 ft away.
It's also important to note that these systems are in their early days. Pilot projects are underway now. And it should be sometime next year before we get feedback from end user pioneers. But there seems little question that the RFLS concept is promising.
At the same time that RFLS is making its debut, there seems to be almost a gold rush mentality in RFID. At Scan-Tech this year, there were more suppliers of RFID than ever before. And there are new suppliers too.
One real interesting idea shown at Scan-Tech is an RFID smart label, consisting of an ultra-thin RFID transponder laminated between the two layers of a consumable label using somewhat modified label printers. In addition to being read, the transponders can have new information written to them as needed. Applications discussed range from packages on conveyors to airline baggage.
Over in RFDC, the focus is on interoperability of terminals from different suppliers. This move shifted into high gear last year when IEEE passed the 802.11 interoperability standard and the Wireless Interoperability Forum (WLIF) created the OpenAir standard. These non-competing approaches to the same problem have resulted in the introduction of a steady stream of RFDC systems and terminals that meet the standards. In all, there are more than 50 RFDC products that follow one or the other standard.
Meanwhile, RFDC is becoming a factor in two other areas than standard data collection terminals. One is label printers and the other is voice systems.
Shown at Scan-Tech for the first time were non-portable bar code label printers rigged with radios. Rather than having to run hard wiring to remote locations in the warehouse or plant floor to feed data to the printers, they can now receive information in real time by RFDC.
Voice data collection systems have long used RFDC to transmit and receive voice data from remote locations in the warehouse. But a couple of voice suppliers have created applications software tailored for picking operations. Workers hear pick instructions sent by radio frequency and send voice data back about actual picks with these systems. This development builds a true application base for voice in the warehouse. And the beat goes on.
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