Automated materials handling systems play a key role in today's supply chains. Yet far too often, senior management doesn't have a clue about whether the systems they have invested in are providing value for the dollars spent or even meeting the expectations penciled in when the project was approved.

That was one conclusion from a survey of automated materials handling systems users by Jim Tompkins, president of Tompkins Associates (www.tompkinsinc.com). Tompkins reported the results at the Allen-Bradley Automation Fair, an annual event focused on real-time automated control systems sponsored by Rockwell Automation (www.rockwellautomation.com).

"We found that 24% of upper management surveyed didn't know whether their systems were a success or not," Tompkins told attendees. Then he went on to say that 48% of all materials handling systems were performing below management's expectations. What both numbers show, Tompkins said, is that automated solutions still don't get the respect they deserve for the value they provide.

"If we're missing expectations 48% of the time, we're either not doing a good enough job of designing systems, or we're not doing a good enough job of explaining these systems to upper management," Tompkins said.

Tompkins outlined seven hurdles that block companies from achieving real results from their systems.

Planning. Projects get tripped up in three ways during the planning stage. The first is a system designed for the way things used to be and not the way they are today. The second is a system designed to handle average volumes. In the real world, DCs operate with peaks rather than at a steady rate. Finally, too many systems are designed to handle every exception. The most productive and economical systems handle the majority of operations with work-arounds to cover the rest.

Accountability. A successful system needs a leader with control over the resources to get the job done. The corollary is that the person in charge must have the experience to get the job done.

Go Live. Rigorous acceptance testing of subsystems and then the entire system is critical to materials handling success. Yet, testing is often the first step jettisoned when a project falls behind schedule.

People. Automated technology is more complex than a manual system. Yet too many great systems are operated by poorly trained people. "Line operators aren't adequately trained, and supervisors are interested in protecting the status quo which leads to a resistance to change," Tompkins said.

Managing expectations. Management needs a realistic assessment up front of what a new system will – and won't – do. Then, once the system goes live, DC managers need to track key performance indicators to make sure they're getting everything from the system they promised. Finally, that information needs to be reported back to management.

"DC managers aren't reporting what they're achieving," Tompkins said. "If you don't tell management what you've done, they'll assume you haven't done anything."

Budget conformance. A realistic budget includes money for contingencies, funding for IT requirements, and an understanding of the life cycle cost of a system, including long-term maintenance, energy, taxes and labor.

"I worked on a project where the company stayed on budget by replacing a $15,000 automatic case sealer with a manual system," Tompkins said. "Now they're spending $60,000 a year to have employees seal cases on all three shifts."

Schedule conformance. Meeting scheduled deadlines is important, but not if it means eliminating crucial steps that can result in down time later on. "Cutting out things that you know are needed like testing and ramp up just doesn't work," Tompkins said.