Tompkins report says aging material handling systems will challenge growth

Many material handling systems used today are beginning to show their age. What were once considered brand new systems are now deteriorating and fighting to stay current.

With information collected in a recent survey to retailers, manufacturers, wholesalers, and third-party logistics firms, Tompkins Supply Chain Consortium maintains that shippers can gain information how to address this concern.

The survey revealed the average age of a material handling system is 15.3 years old. A total of 35% off all companies have at least one material handling system that is 20 plus years old. Companies on average have 2.7 distribution centers with a material handling system that is 15 years old. These statistics indicate that many of today’s material handling systems have considerable age to them and they may be a source of operational concern going forward.

The survey next examined the extent of the issues caused by aging material handling systems. The top two responses indicated the lost of employee productivity by 18.2% and 18.2% of system downtime is evident when a material handling system has reached its useful life.

“It’s scary the number of times I have visited distribution centers and have found maintenance managers piecing together equipment to keep it working,” says Dale Pickett, Director of Supply Chain Services, Tompkins International.

Pickett, who has written about “omni-channel complexity” for Supply Chain Management Review in the past, notes that 83% of company leaders are aware of the aging status of their material handling systems.

“The business risks are real and can potentially be significant if a material handling system fails. Many companies use financial measures to assess when equipment is ready for replacement or an upgrade,” he says.
While this may seem logical, experts at Tompkins International believe this is only one part of the equation when evaluating a material handling system replacement.