Implementing information-driven materials handling systems is the next step in the drive to achieve supply chain optimization, according to Sal Spada, director of discrete industry research at ARC Advisory Group (www.arcweb.com).

These systems are built around "smart" machines that are equipped with onboard intelligence. Intelligent chips will allow equipment such as conveyors, diverters, robots, palletizers and stretch wrappers to capture order-status information down to the container level at every node in the system.

It's critical that companies that want to optimize their supply chains have access to that kind of information, Spada told attendees of "Manufacturing Strategies for the Plant Floor," a two-day forum sponsored recently by ARC in Orlando. "Before you can effectively improve your supply chain, you have to extend visibility down to the lowest levels," he said. "That means having a greater reach into information on inventory-in-transit, work-in-process on the plant floor, and stock levels in the warehouse and distribution center."

As more and more companies look to their supply chains for improved profits, materials handling systems and the information they can provide are taking on greater importance, Spada continued. "Materials handling systems are perceived as the foundation for achieving supply chain execution excellence," he said. "But constant changes in the business climate, like dynamic shifts in order volume and greater variation in the mix of products, are impeding the ability of many material handling systems to deliver."

Materials handling control system software (MHCS) currently bridges the gap between materials handling equipment and high-level information systems such as warehouse management systems. Those systems, however, are expensive and difficult to integrate.

Materials handling equipment with built-in intelligence, on the other hand, can work in conjunction with radio frequency identification tags and wireless networks to provide insight, information and independent decision-making, as well as the status of any container on the plant or warehouse floor.

"As packages flow through the materials handling system, each node will be responsible for identifying the package and referencing a dynamic database for routing information or specific handling, packaging or shipping requirements," Spada said. "That will provide the greater visibility needed to optimize the supply chain."