John Pelka responded in writing to IEN''s questions, with an assist from Kevin Kozuszek, marketing manager at FKI''s Alvey Systems, and then expanded on his responses in a phone interview with Joe Rosta, IEN''s editor-in-chief.
IEN: How can manufacturers use existing technologies in new ways?
Pelka: MHE suppliers can combine existing technologies in new and innovative ways. A great example is Discount Auto Parts (DAP) where FKIL designed a new system using a pallet carousel, gantry crane, pick-to-light, carousels and conveyor to significantly increase DC productivity. Pallet load case picking of mixed loads went from 160/hour to 1000/hour and order picking from pallet flow racks increased by 70%.
IEN: What are the major concerns facing the material handling sector in the next few years? How can they be addressed?
Kozuszek:
- Importance of order accuracy in picking or in general distribution or manufacturing fulfillment -- this helps reduce costs, increase speed and can be implemented via software.
- The reduction of storage in facilities -- storage has related costs (inventory carrying costs as well as cost associated with space). This means that facilities will need to implement JIT, or buffer storage situations, where smaller amounts of items are "buffered stored" for short amounts of time. With this type of operation the need to quickly, easily, and accurately access the product is important. This can be accomplished with carousels coupled with IE devices or PTL.
- People issues -- including governmental regulations involving repetitive motion injuries or ergonomics in general. These issues can be solved with MH automation.
IEN: What innovations are in store for users (in materials, equipment, software, systems, and/or design)?
Pelka: Improvements are continuous and are focused on speed, accuracy, control, and risk reduction. MH equipment is increasing in speed with conveyors now capable of 600 fpm and sortation speeds continue to increase with such innovations as the ES3000 tilt tray sorter, which actually banks into turns, allowing for faster speeds and more accurate placement. But the real innovative focus is in software and controls which is the key risk area in all MH automation projetcs. FKIL is developing a total customer solution, called the Logistex Software Suite (LSS), that will provide customers with a complete SW and control solution based on a set of off-the-shelf modules and applications with only minor customization. This will reduce risk and allow customers to customize their solution. The beauty of the environment is that each time a new application is developed it goes into the library and can be used for future projects.
IEN: How secure is wireless technology?
Pelka: Wireless technology, including RFID, is encrypted to maintain data security and integrity. Also, during the initial write process, the data is written on the tag and to the database, which are matched when read. This also improves security.
IEN: Is e-manufacturing a significant factor? Why/Why not?
Pelka: E-manufacturing has not been the boon to the MH industry that was originally anticipated. However, conceptually it still makes sense that a streamlined supply chain within the manufacturing sector will drive automation given that the requirements are, again, speed and accuracy. I believe that one of the key issues is that it takes a risk taker to make the investment and we still do not have enough risk takers who are willing to bet a career on new technology that requires collaboration among many different companies that may or may not work well together. If we get companies to work together we''ll see the fruits of e-manufacturing.
E-manufacturing has become a factor to the material handling industry, but not in the "online" or "dot-com" sense that was originally anticipated. The concepts behind "Electronic" manufacturing have taught the material handling industry a few lessons, primarily that there are ways to combine software and communications to increase efficiencies within facilities. Traditionally the material handling community moves slowly when evaluating change due to the high costs associated with it, but the technology and bottom line efficiencies associated with e-manufacturing are allowing companies that are taking smart, calculated steps in implementing these concepts to see solid operational gains and advantages over their competition.
IEN: Is the drive toward lean/flexible manufacturing impacting this sector? In what ways?
Pelka: Automated MH systems are inherently less flexible than manual systems. At the same time they are leaner, substituting capital for direct labor. Not unlike e-manufacturing, risk takers are needed to make this an important driver in the MH sector. In addition, companies need to see an acceptable ROI, which takes innovation (and again risk taking, like the DAP installation).
IEN: Can companies integrate advanced material handling technology with legacy/traditional parts of the enterprise?
Pelka: This is going on today and will only accelerate. In fact, we see the concept of LSS as a key technology to make this work since most of the interfaces will be complete to the MH E level, which will allow a focus on developing the interface between the legacy system and the MHE. With visibility and control of the MHE, the integration to the more traditional parts of the enterprise becomes easier.
IEN: I''m interested in the LSS system, and I was wondering if you could tell our readers more about what that will do in terms of the material handling sector, how that will ease the transition into e-manufacturing.
Pelka: LSS is really the abbreviation for Logistex Software Suite. It is a combination of software and control technology that we believe will reduce risk and actually keep costs down as we do integration. I think everybody would recognize that the biggest risk in installing automated control handling systems is in the interface and the integration between the various software suites, for example between a WMS down into the machine control, and also between the various material handling technologies. They obviously need to share information, share data, and often what happens is each time the new system is developed, they''re written custom. If you look at, for example, a WMS system, the actual cost of the software itself typically is only about 30-40% of the overall implementation. Everything else is customization and installation.
What we''re doing is building these interfaces really prior to an installation going in. We have strategic alliances with several WMS suppliers -- Manhattan Associates, Oracle, EXE are several -- and we''ve been working with them on numerous projects. And as we''ve developed these interfaces for the specific applications, we''re of course maintaining this base of code so that the next time these software interfaces are built, we have a good portion of it complete.
It''s probably the biggest challenge -- it''s an interface between WMS down to the MAG. Now there''s a question there about where do you put the intelligence. Do you put it in the material handling equipment to basically control the conveyors and the sorters and the carousels, or do you build a layer above that? That''s typically been called WCS, or Warehouse Control Systems, and we''re working on developing that layer of software. If you can imagine the WMS system -- rather than going from the WMS down to a separate sorter interface, down to a separate carousel interface, down to a separate conveyor interface, down to a separate pick-to-light interface -- there will be one interface between the WMS and the WCS, and we''ll have developed all the other interfaces already between the WCS and the individual material handling equipment products.
FKI Logistex is made up of several companies that manufacture conveyors and sorters and carousels, pick-to-light products. We can develop those internally, and the next time an opportunity comes up, most of that difficult code building has been complete. There''s a lot of communication protocols that have been built, there''s obviously business applications, things like waves, wave control, wave picking, that everything has been in the process of being built. We anticipate having this complete and probably introducing it sometime in the fall, so we''re pretty excited about it.
We''ve spoken to several consultants, and some consultants think that the intelligence should be down at the conveyor level, that they should be handling decision making about what to pick, what to store, where to store it -- and we disagree. It will be interesting, we''ll see some controversy in the future about where to put that.
IEN: It seems to me that by centralizing this intelligence, you reduce the potential for an error on the plant floor to affect everything else. Is that correct?
Pelka: Absolutely. I think you can imagine if you''re passing data to four or five different pieces of equipment, as compared to a single one, you just increase your complexity. That''s our goal -- to reduce the risk, and to improve the overall accuracy, which is obviously essential to this business.
IEN: Will people also be able to operate this remotely?
Pelka: Part of the overall logistics of our suite is a whole series of interfaces. We are looking at a Web-based interface where someone can do the supervisory control, the SCADA-type reporting systems, from their PC -- from their home, from wherever they would care to review what''s going on with that system. They''ll just call it up on the Internet, obviously password protected, and get into their system and see how the whole system is operating. So absolutely, positively. And of course with Internet connection you can then have wireless, Blackberry-type technology.
IEN: Would that be a phase 2?
Pelka: We''re working on a lot of these things in parallel, and I think that the Web interface will be ready in October, November -- I haven''t seen the detailed schedule yet, but I think if it''s not going to be later this year, it''s going to be soon after.
We really think that this whole area of software control, software integration, is really the key to the future of this business because for so long, a lot of the technologies, especially the physical picking technologies, the carousels, conveyors, are basically commodities, and there''s not a lot of differentiation. So really where you need to differentiate is in the software controls and obviously in the service area, and I think that''s where we''re heading and a lot of our competition -- they recognize it as well.
IEN: Another question related to LSS: collaborative management -- will there be that possibility or capability?
Pelka: Yes. One of the things I had mentioned is we do recognize the importance of alliances and partnerships. Besides the three WMS suppliers I mentioned, we also have strong relationships with people like Rockwell Automation, who supply all the control technology. There is a company that is really exciting that we''re working with right now called SCS. It''s out in San Diego, and they provide RFID technology, which is extremely exciting because it really moves the ability in bar code reading up to allow you to really track and add data along the process. It allows you to -- if you can imagine a pallet of product going through a facility, and you know everything that''s on the pallet, really down to the individual product.
That technology, the issue there, is getting the cost of the RFID tags down. There''s a lot of work that''s going on not related to manufacturing. Right now we, with SCS, have a contract with Jacksonville Airport to be the first fully RFID tagged airport in the U.S. for baggage handling. As people come to Jacksonville Airport, they''ll be able to track those bags to an individual person throughout the entire airport, which of course is one of the things that we''re running into today. If your bag isn''t on the plane, and you''re on the plane, and vice versa, they stop that plane from moving. This new technology will allow us to track that and minimize delays and keep things moving. We really think that RFID technology is something that''s going to be tremendously important in the future. That''s an example of our collaborative alliance efforts with other companies. This networked economy is coming into fruition in the material handling industry. (For more on the Jacksonville Airport project, click here.)
IEN: I would think that, with this technology, you could have the plant team or the facility team participate in these decisions or at least view these decisions of the material handling engineer -- If it affects something else in the plant, there can be an alert sent out?
Pelka: Absolutely. There will be sensors throughout the system. It''s a real time system that allows, through this communication system''s inner setup, instantaneous viewing of what''s occurring throughout the facility. That of course allows for instant collaboration, if you have the proper alarms and people are warned of something that''s going on. I think it''s also important, as these systems are being developed, we''re obviously working with our customers, trying to understand what''s important to them. That''s a very important part of the overall development process. We''re constantly working with our direct customers, and we''re right now doing some market surveys to try to understand better what people are doing today in that environment. And as we gather that information we''re refining our architecture and our concept that we''re developing. This can''t be done in a vacuum.
IEN: Since this is such an ongoing process, and of course there are all these developments with protocols and other technologies, even some unexpected ones, technology transfers and all that, the architecture, I would guess, is being developed so it''s expandable?
Pelka: Yes, the systems will be upgradeable and expandable. Everything''s written kind of hardware independent. The interfaces are all Windows based so that people are very familiar with them. The underlying system''s architecture could be Unix or could be AS 400 or it could be NT, and frankly, it won''t matter. We''ve done some surveying in the past, and we''ve found that it''s almost 50-50 between Unix and NT with some sprinkling of AS 400. At this point you can''t ride a single horse -- you really need to develop something that will work in either environment.
IEN: If I''m a manufacturer and I buy LSS from FKI, can I use it with an Alvey product but also some other person''s product?
Pelka: Yes, you can. The difference, though, will be that that interface will not be off the shelf from the library; it will have to be built. Therefore, the cost goes up [and] the risk goes up. We want to make it as flexible as possible. One of the things that FKI Logistex is trying to do is to be a single point supplier. We are very confident that we have world class mechanical technologies -- as you mentioned, Alvey palletizers, which I think are recognized around the world as the leading palletizer products; White carousels the same; Buschman conveyors are recognized for their quality; RTS, Real Time Solutions light systems again the leader in that technology -- we feel that we have a basket of products from an integrated material handling standpoint that are really second to none.
Obviously the leader in this industry is Siemens Dematic, with their acquisition of Rapistan last year, but I don''t think they have quite the products that we have. We feel very confident that by building these interfaces and getting a lot of the hard work done ahead of time with the best products available, that those shouldn''t be issues. There always are some customers that just want to mix and match what they''re doing, and that''s their prerogative. We think we have a story to tell that says this is a better way to do it.
IEN: You mentioned that technology and bottom line efficiencies associated with e-manufacturing are allowing companies to take smart, calculated steps in implementing these concepts, and I was wondering if you have an example or two to share -- or at least discuss what you mean by that, what kind of steps, what is the implementation timeline on that, a year, 6 months?
Pelka: I think, initially, people looked at e-manufacturing as driven by the Internet, with all this dot com stuff, and everybody got terribly caught up in that. In hindsight, obviously, they didn''t make any sense from a business standpoint, what all these Internet companies are doing, except from the standpoint that really what they are trying to do is to tie disparate parts of an organization together. You''ve really got to get away from the retail side, you have to get back into the manufacturing side.
The goal behind e-manufacturing is speed and accuracy and collaboration, and those basic concepts definitely are things that the material handling industry has begun to understand. It kind of comes back to this issue of how do you integrate these systems and do it faster and cheaper and better, and with more accuracy and with less risk. So I think e-manufacturing, from a conceptual standpoint, made the material handling industry think about this whole idea of collaboration and more real time information than they had in the past, and they''re working together with other companies within the industry. Those are some of the basic concepts that we learned from e-manufacturing.
I think the good examples we see are in the beverage industry, where there''s an integration point between the bottling operation and the packaging system. You really can''t improve your overall efficiency and productivity without having those things in sync. What we''ve seen is a tremendous increase in demand for automatic palletizing from our Alvey side because the bottling lines are increasing in speed, and unless you can take those cans and bottles off the line quick enough and put them into cases, and get the cases out into the warehouse in an efficient manner, everything slows down behind it. That kind of interface and collaborative effort between the packaging side and the bottling side, I guess we''ve seen that improve with a lot more information and collaborative efforts.
A lot of our business is in the distribution side, and I''ve mentioned discount auto parts. The concept that they have is really to use off the self technology in different ways. Is that e-manufacturing? No exactly -- I guess that''s more e-distribution.
Maybe another thing that e-manufacturing has shown us is that we need to take more risks than we have in the past because we''re not going to move forward unless we take those risks, and we''re not going to move forward unless we combine multiple technologies and capabilities and ideas -- again, which is more risky than the old-fashioned ways of doing things.
IEN: Lean and flexible manufacturing: most people are not combining those two words, partly, I think because of the somewhat ominous association of lean with layoffs. What piqued my interest was your comment that material handling systems obviously are lean and obviously are less flexible. How do you make the less flexible more flexible?
Pelka: I guess what comes to mind is that the most flexible systems are all people; look at China. They probably have tremendously flexible systems because they have lots of people to labor and it''s inexpensive; their goal is to maximize their employment. In U.S. manufacturing, actually Toyota is I guess most known for its flexible manufacturing and flexible distribution. And their amount of automation is minimal; they just do not believe in automation. Of course they do -- they have robots; but when you start getting into the distribution side, they''d much rather just have no automated material handling systems at all. They''d much rather just have rows and rows of racks and storage and people on fork lift trucks. It gives them tremendous flexibility.
I guess your question is, how do you make automated material handling systems more flexible? I guess you''re right, part of it is in the integration of the controls software and the automated material handling systems.We''ve developed a One-Touch system, which I can''t describe in detail myself -- I know it''s extremely flexible, but I don''t really know how it works, other than that it combines various material handling technologies that minimize or maximize the amount of products that you can handle in a fixed footprint.
To make a system more flexible, you do have to really start with the controls and the software, so that as different products are processed and distributed, it really wouldn''t matter when it has to be somewhere. Some of the things that are important when you''re trying to fill an order are where is it going, when does it have to be there, and what do you have to combine it with to get the most efficient distribution back at the retail. One-Touch distribution does that.
IEN: Integrating advanced technology with legacy parts of the plant -- I guess I''m not sure what your target business is. In the spirit of Toyota, companies don''t want to throw out a machine that''s working.
Pelka: At FKI Logistex, we focus on four vertical markets. There''s baggage handling, which I had mentioned with Jacksonville Airport; there''s freight and parcel, and that''s people like UPS and Federal Express; there''s distribution, and that''s companies like Wal-Mart and Target and Land''s End; and then there''s manufacturing, very heavy in food and beverage, meat processing. Intel is one of our big customers, in their cleanrooms.
Where we typically don''t have a lot of business is in the automotive industry, and that''s just been a business decision to not focus in that industry. We just found it to be overly competitive, and we look to generate higher profitability than our competition, and we just decided not to be in that business. We do, though, handle things like tires, car seats -- so with automotive, we''ll cover the second tier suppliers rather than the big three or four or five.
So manufacturing is one of the major arms, and we even subsegment that from the standpoint of where we have expertise. The integration of our systems to legacy systems -- typically on the plant floor we''re really interfacing with the MRP system on one end and probably the WMS system at the other end. We''re getting order information and plant loading information from the MRP and knowing where to ship it from the WMS. The LSS will allow us to do that, we think, a lot more efficiently than has been done in the past. We don''t expect companies to change the way they''re really doing business. We all have to get the most out of our existing capital expenditures. I think integration challenge is primarily in the software and controls side and not so much in the hardware. And hardware is somewhat of a commodity.