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Think ‘inside the box’ when it comes to automation

17 October 2024

Russell Hutchinson, UK sales manager at Daifuku, argues that too many businesses waste time on unnecessary details during the selection process for a new automation system. Time is better spent on the softer skills of finding the right automation partner – and investing in that relationship. 

DURING MY career in the material handling industry, I have been privileged to observe how companies choose their solution providers for a variety of intralogistics systems. Such systems can often be multimillion pound propositions requiring multiple departments to be involved in the decision-making process. Some companies even bring in third party consultants for their expertise when making such significant, strategic decisions.

Due to the fact that many automated solutions are CAPEX intensive, a culture of vetting everything often develops - in order to protect the company's investment. Naturally, it should be expected that people involved in planning will do their very best to find the right solution - however, in my experience that planning can at times be taken to a level that is counterproductive.

When embarking on a new automation investment project, it is vital to look at the situation in terms of the solution that is to be provided. This approach can shed light on any unnecessary steps that you may be engaged in and allow you to focus your efforts on the elements that will bring meaningful results.

With this point in mind, the following checklist should prove useful in the pursuit of getting a solution that fits your budget and your supply chain objectives:

Some dos

  • Open rules - Document all business rules that may in any way relate to intralogistics and share them with participants. This includes any relevant operational documents pertaining to the facility. This could be a description of processes inside the warehouse, areas that cannot be used for automation or your company’s sustainability aspirations. Quality management including penalties for delays and reporting formats should also be clarified here. 
  • Share relevant data - Gather the raw data (peak and average order line days, inventory snapshots) needed for basic planning. Also define any growth factors that should be applied to the data for planning. Don’t over burden prospective automation providers with irrelevant information.
  • Existing systems - Make a chart of pre-existing business systems (ERP, OMS, etc.) that will need interfaces with the automated material handling system. It’s important to understand what the interface would look like. Does your company run on SAP, Microsoft or Manhattan - or an in-house developed system? This is vital information that can lead to further key questions! Generally, the more tailored a WMS integration needs to be, the higher the risk and cost. 
  • Share your vision - Involve your current operations management in the project at an early stage—getting their buy-in from the beginning will motivate them to be responsible for success during the operational changeover to the new system.

Some don’ts

  • Over analyse - Don't spend significant time digesting raw data yourself. Vendors can do this as part of their proposal creation process.
  • Shut down creativity - Don't build the solution yourself and put it in an RFP to get a like-for-like comparison among vendors—let the vendors propose their distinctive features.
  • Try to be a hero - Don't take on the role of system integrator yourself (unless you are already very experienced). This is best left to experts – leaving you to focus on the day to day running of your business.
  • Waste your own time - Don't spend more time than necessary on the planning/decision-making process. Maintain a disciplined approach.

Quick tips on finding the right vendor

  • Determine reputable vendors that are active in the country where the installation will be done. They will have a better understanding of local legislation / health & safety and also be more responsive when technical support is needed.
  • Quickly determine the vendor that you will be comfortable working with through a combination of RFIs and high-level proposals. If it only seems like one vendor fits, great! Go sole source. 
  • Once the vendor is determined, tell them your budget, and ask them to give you the best possible system within the constraints of that budget.

It is best to find a vendor that you are comfortable working with as quickly as possible. The main reason is that you will want to spend quality time going through the design and making sure your change-management strategy is planned correctly with the solution proposed. Focused sessions with a single vendor will reduce risk.

The ‘like-for-like’ trap

Many inexperienced supply chain managers fall into the trap of issuing an RFP, then re-issuing "harmonized RFPs" based on a composite of vendor proposals. While you may attempt to get a like-for-like comparison to see if you are getting the lowest price, comparing material handling solutions from different suppliers on a line-by-line basis is missing the point - each vendor will have portions of a solution in which they excel. 

Also, the place of installation and required installation time frame can impact each vendor's price differently.

Time is money

Doing like-for-like comparisons may eventually lead you to the lowest overall cost. However, if you are objective, it will also become apparent that taking all that time to try and achieve absolute transparency here has cost you valuable time. That time could have been spent on system design and other important activities had a vendor already been selected.

The key to keeping the cost within your budget is to be clear with the vendors about budgets. Good vendors will want to give you the best system they possibly can. If you are choosing a single supplier, they may keep back a bit more margin, but it is pretty safe to say that most will be more interested in a long-term relationship with a satisfied customer than a quick one-time profit, and that will keep you from getting price gouged.

Saving time in selecting your vendor lets you reap the benefits of the new system earlier. Additionally, your relationship with the provider who "gave you their best within budget" will likely become one of mutual trust.

For more information, visit www.daifuku.com

 
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