Leaders Q&A: How automated parcel handling operation increases efficiencies

Don Caddy , CEO, Engineering Innovation

Unpredictable business volumes are keeping commercial mail houses and parcel-handling businesses up at night right now. Peaks are happening even when it’s not technically “peak season,” for example, and the fluctuations are becoming more and more difficult to predict. With labor hard to come by, costs increasing and customers expecting fast delivery times, manual parcel handling approaches just don’t cut it anymore.

As CEO of Engineering Innovation, Don Caddy has his finger on the pulse of the mail and parcel handling industry. With more than two decades of experience in the field, he’s the driving force behind Engineering Innovation’s product planning and development and oversees production management, client relations and staffing.

In this Leader’s Q&A, Caddy discusses the current challenges facing the parcel handling industry and the many different ways automation is helping companies work smarter, better and faster in these unpredictable business conditions.

Q:  What are some of the biggest challenges that commercial mail houses and parcel-handling businesses are facing right now?

A: Along with responding quickly to variability, these operations are also dealing with a post office that’s increasing costs at every opportunity. They’re also facing labor challenges at a time when variable parcel volumes equate to variable labor requirements. The number of people these companies may need on a daily basis varies, which means there are new, less experienced employees coming in the door—that is, if the company can even find these new recruits. We recently talked to a company that interviewed and hired 11 people one day, only to have just four of them actually show up for work as scheduled. This is just one example of how getting a staff in place—and in a variable-volume environment where a lot of dynamic changes have to take place—is a major challenge for companies right now. 

Q: Are companies also dealing with delivery challenges?

A: Yes. Because most logistics companies have a service level agreement (SLA) with their customers, any time there are challenges with USPS or another vendor not necessarily hitting its delivery schedule, it has a ripple effect upstream to companies that are trying to keep their own customers happy. So even if those firms get the orders out on time, that doesn’t necessarily mean the package is going to make it to the end customer on time.

Q:  How can companies use automated sorting equipment to overcome these challenges and stay competitive in such a demanding market?

A: For starters, automation amplifies the effectiveness of the labor force. If two people are feeding a machine that processes 4,000 parcels an hour, it’s much better than having those two people each doing 300 parcels an hour by hand. In this simple example, automation amplifies the effectiveness of the human workforce. In addition, automation products are also designed to “de-skill” the operation. Sort-to-light systems and sorting machines, for example, can either simplify or eliminate the training process altogether. So instead of having someone scan barcodes or memorize 50 different locations, the automation does the work for them. This level of de-skilling allows people to work faster and more effectively. 

Finally, automation also helps companies provide a better product to their shipper. By the time the shipper gets it, the automation has already collected all of the data and uploaded it to the shipper, who knows what’s coming. When a parcel has a valid address on it and the right barcodes, for instance, fulfillment, shipping and delivery are all accelerated and companies know that they’re injecting a good parcel into the delivery stream.

Q:  What does the future hold for automated sorting equipment?

A:  After a few years of delays due to ongoing supply chain constraints, we’re hoping to be able to speed up our delivery schedules based on having parts to meet customer demands, which are fluid. A company that places an order for automation in August wants it in place before the holiday peak—not the following year. In the near future, order lead times are going to start coming down as availability gets better. In terms of future development, machines are only going to get more accurate, faster and able to handle larger and larger parcels. And as we continue to improve our products, their speeds and productivity will increase exponentially.

Q:  How does Engineering Innovation help companies tackle their current challenges while also preparing them for the future?

A:  We take a holistic approach to parcel automation. We look at the entire operation and then figure out how our solutions best fit into those environments. We recently worked with one new customer that wanted a machine that would help it speed up its parcel operation. Upon further inspection, we learned that the packages were being loaded onto and off of a pallet prior to reaching the machine. We realized that with just a few tweaks to the machine, we could save them having to palletize and de-palletize all those boxes.

Our modular system architecture allows us to offer customized solutions for customers, versus just giving them what’s “on the shelf” at any given time. We deliver very customized solutions that truly fit their needs, and without them (or us) having to start over from scratch to build that equipment.

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