MHI Solutions

Solutions Spotlight

SOLUTIONS COMMUNITY: Crawl, Walk, Run Approach Helps Overcome Barriers to Implementing New Technology

* By John Paxton, COO, MHI *

With e-commerce continuing to grow, customers increasingly expecting orders to be delivered yesterday and a shortage of talented labor, it’s no secret that supply chains are being pushed to the max. Adding new automation technologies to warehouses and distribution centers is essential to streamline processes and increase capacity. But it also is a daunting undertaking that poses considerable risk in terms of capital investments and disruptions to operations.

At the recent MHI Annual Conference, the Solutions Community membership was asked to define the top barriers to implementing new technologies. The feedback from the 75 members was:

  • Lack of a clear return on investment (ROI)
  • Demand forecast uncertainty and the ability to scale
  • The availability of capital fundings
  • Skilled implementation resources at the user

Perceived risk of the new technologies and disruption to current business operations.

Fresh off this feedback, Dwight Klappich, vice president for supply chain research at Gartner, seemed like the ideal person to speak with about managing the risk and overcoming the barriers to implementing advanced automation.

Klappich said that in the past, introducing conventional automation technology into a warehouse or distribution center was a long process, starting with the design/build phase and going through implementation, and it required a huge upfront investment with a long payback period. There was built-in risk for companies because these automation systems weren’t very adaptable.

Klappich said he recently spoke with one client who implemented a conventional automation system about a decade ago, before the rapid rise of e-commerce, and now found his company’s system inadequate for its high order volume.

That upfront cost and risk associated with new technology have led some warehouses and distribution centers to invest instead in workers, who could easily be scaled up or down according to demand and retrained relatively quickly to handle different tasks. But with the unemployment rate at historic lows, that solution has its limitations.

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This issue of MHI Solutions focuses on the adoption of these and other digital solutions from best practices in robotics and artificial intelligence to getting your supply chain data house in order to measuring and tracking your Supply Chain Digital Consciousness Index or DCI. While implementing digital innovations into supply chains is complex, inaction is not a strategy. In fact, as the pace of supply chain innovation escalates, so does the price of inaction. In this new digital era, leaders will outpace their competitors faster than ever before

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