Why a Rearview Approach to Automation Strategies Doesn’t Work

MHI Solutions Community


mhi solutions communityIf you’re managing a manufacturing plant, warehouse or distribution center, then you’ve likely heard of VUCA. But even if you haven’t, in today’s business climate, you’ve surely experienced it.

VUCA stands for volatility, uncertainty, complexity and ambiguity, an acronym that fairly sums up the challenges facing material handling companies of all types. Due to a labor shortage, rising wages, high turnover rates, increased order volume, supply chain issues and rising costs for transportation and raw materials, shippers are under pressure to find operational efficiencies and cut costs.

Simultaneously, the highly competitive retail environment has placed a premium on excellent customer service, meaning that shippers must weigh the benefits of any proposed process change against the risk of disappointing consumers.

Companies are being forced to reevaluate their inventory strategies now that the just-in-time delivery model has proven fragile and precarious. Manufacturers are recognizing that they should stockpile the materials and inventory that they simply can’t do without, and retail stores are following suit, keeping more of their most popular products on hand.

That shift in strategy, combined with steady SKU proliferation, has left many shippers with insufficient space in their warehouses and distribution centers. Operating in tight quarters has become yet another contributing factor to VUCA, prompting supply chain professionals to search for solutions. Vertical storage systems and other automated equipment often are the best options.

COVID-19 greatly accelerated the march toward automation, and with the worker shortage showing no signs of abating, even shippers that had been dragging their feet are starting to break out into a sprint. But members of the MHI Solutions Community remind logistics professionals to heed the advice of legendary UCLA basketball coach John Wooden, who frequently would instruct players to “be quick, but don’t hurry.”

Ed Romaine, vice president of marketing and business development for MHI member Conveyco, said supply chain professionals sometimes make decisions about automation based on incomplete information, or as a reaction to their most recent logistical emergency. That approach can be problematic because it aims to solve a short-term problem instead of positioning the organization for long-term success, he said.

Romaine said supply chain professionals and C-suite executives should make a list of all the factors that could impact their ability to get products out the door, including labor costs and availability, projected product demand, new product launches and shortages of key materials due to supply chain shocks.

From there, companies can construct a “roadmap” for addressing each challenge. In many cases, the solutions will include automation, but not always. And having a plan in place will allow companies to choose the right automation solution for their facilities instead of just adopting the latest trend out of a sense of urgency, Romaine said.

“When you’re passive or reactive, you’re hit with a problem and then you’re scrambling for a solution,” Romaine said. “You’re looking at your operations in the rearview mirror. What you need to do is look out the windshield and even beyond what you can see in the windshield. You need to see what’s up on that road and then make plans.”