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Implementing Material Handling Systems – Folly or Disaster?

By Art Van Bodegraven

Introduction

The challenge of implementing material handling systems projects in the real world of time and cost constraints is growing. Hardware has got to work . . . and work with the companion software. People have got to know how their jobs have changed, and not only execute transactions, but also recognize when the system isn't working the way it was supposed to. And, as always, planning is of the essence.

We'd like to not believe it, but the sad truth is that implementing material handling systems is tough work. As with anything difficult, the chances for something important to go wrong are high. Too many cases are serious enough to wind up in court. But, it doesn't have to be that way.

Recently, some of us in The Progress Group met to talk over the challenge. We've seen plenty of flawed installations, and we've worked with litigants and their lawyers when all else has failed to resolve problems. And, we've been involved in success stories, as well.

Our panel consisted of: Jim Apple, who has devoted his working life to the design of distribution operations and systems; Dave Stallard, who spent many years in system design and installation for a major manufacturer before turning to consulting in the same field; Drew Hale, who has just completed bringing up a 400,000 square foot facility (including the material handling systems); Catherine Cooper, a veteran systems project manager in logistics and operations; and Steve Mulaik, who specializes in the software side of the question.

Opening Shots

Stallard threw the first punch, strongly suggesting that a majority of MH projects are fatally flawed by solving a problem that will change by the time implementation takes place. Apple agreed, noting, "You've got to be solving a real business problem, to get support, anyway." Hale added, "It's got to be the right version of the problem. Designing for today's world guarantees a poor fit for how volumes and velocities are going to change." "And," added Cooper, "the problem needs a complete solution. Automating bad processes is dumber than not using technology at all."

Ingredients for Success

  • Money. Apple maintained, "Under-funded projects are doomed to failure. They are never completed on time, or successfully. Contingency budgeting is also critical. Without enough money, the specifics of the solution and its scope must be rethought - at the beginning."
  • Time. "There is never enough time to do things right," observed Cooper, "but companies will spend bazillions of person-hours trying to make things right at the "end" of a project.. Not that anyone has the luxury of all the time in the world, and no one in a competitive world can afford a "comfortable" schedule. The key is intelligent use of what time there is, using as much fast-tracking as possible, and with a heavy dose of planning at the front end. And, putting your foot down when management tries to arbitrarily cut the timeline back." "Another opportunity to rethink design and scope," added Apple.
  • People. Hale stressed the criticality of training. "There's no such thing as too much training. It can't begin too early. And, it can't involve too many people and functions." "It needs to teach how to recognize operational anomalies, as well as how to run the machinery," said Stallard. Apple added that "design of human interfaces can't be left until the end, or it will be impossible to get them right."
  • Communications. Cooper related the necessity of "having everybody on the same page - timetable, objectives, freeze dates, status." "Look," she said, "I've seen operations modify (improve) processes well after design was completed, making part of the new system ineffective or obsolete. Systems groups are notorious for making mods based on incomplete assumptions about what the MH system will or won't do." "Also, added Hale, when a project involves integrated components (e.g., building, services, MH equipment, control systems, WMS), design development and changes must be fully communicated, with everyone using the same AutoCad version, and PC virus detection."
  • Partnership. "Make sure your suppliers, vendors, contractors - everybody - is putting, and keeping, their "A Team" on the project, cautioned Apple. "You've got to put your "A Team" on it, too. And, don't select project partners who can't commit their team in writing."
  • Flexibility. Mulaik observed, " There are going to be problems, count on it. Nobody involved can afford rigid positions. There must be give and take - compromise. This can only be effective with joint - and open - work sessions. And, all parties need to be ready to back away from their established positions, and rethink all viable alternatives. There is no substitute for having well-defined problem resolution processes."

Sounds easy, doesn't it? All you need is time, money, and the ability to leap tall buildings in a single bound.

Recipes for Failure

"We may be watching the wrong ball here," said Mulaik. "Software testing is the unappreciated project killer. It's easy to find cases in which finishing up the software takes two to six months longer than the physical aspects of the installation.

"Almost everyone preaches the Gospel of No Modifications, until some brave soul points out the absolute necessity of a few critical mods. Then, typically, the floodgates open, as people see the opportunity to get their pet mods (frequently of limited value) into the queue.

"Now, with a wheelbarrow full of mods, software becomes the project's "Stealth" critical path. And, along with not having enough resources to work on the mods, there isn't enough time to test and debug them. Short-cutting testing is a tactic only for someone with a death wish.

"Vendors often have no way of knowing which bugs are most important to work on first, so they are all treated equally. Clearly, the entire scenario calls out for organized processes, and plenty of oversight."

"I think, overall," Stallard opined, "the greatest disasters have come from committing the new facility or system to critical customer support by a date certain, irrespective of the timing of physical and information acceptance processes. Then, when there is no time or way to fix deficiencies, the company is stuck trying desperately to meet mission-critical operational objectives, whatever the cost and effort."

"We don't have to go very far back to the cases of the candy company that couldn't ship for Halloween, or the toy company that failed to deliver at Christmas," Apple reminded.

Other Do's and Don'ts

Stallard continued with more cautionary commentary:
  • "Don't underestimate the productivity / time impact of additional scan verification.
  • "Do order spare parts along with the equipment. That way, you'll save serious money and have them on-hand for the inevitable start-up failures.
  • "Don't expect immediate target performance / productivity achievement. You will be disappointed, and your associates will be demoralized.
  • "Do be prepared to dynamically manage staffing - all day, every day - to capitalize on the capacity and capability of the system. This comes as a surprise to many managers.
  • "Don't expect to build employee ownership of the system in the last few weeks of the 12 to 18-month project cycle. This process needs to begin with initial planning.
  • "Do send a delegation of employees and supervision to a similar facility, with equipment similar to yours (from your suppliers). Not to observe. To work, and learn the equipment and systems.
  • "Don't forget that introducing a higher level / greater amount of mechanization and system control shrinks the margin of error in operations. There are far fewer buffers, and many more opportunities for jams, full conveyors, and other entirely natural disasters. Proactive management requirements escalate exponentially.

Winding Up

Bringing up material handling systems and / or new facilities can be done effectively. But, implementation can be crippled by shortcuts, incomplete planning, and spreading people resources too thin. Then, the old adage kicks in: "Adding manpower to a late project only makes it later."

Final words, from Hale and Stallard: "Make friends with the installation crews. They are vital. And, plug key maintenance staff into the installation and early problem solving. They'll save your bacon, down the road."


About the Author

Art Van Bodegraven directs TPG's Supply Chain consulting practice. He may be reached at (770) 360-5817, or at avan@theprogressgroup.com.

The material above appeared originally in Penton's Material Handling Management magazine.

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