By Scott Carlin
The past three years have put an intense strain on the global supply chain as demand fluctuated based on lockdowns, shortages and global influences. The material handling world touches everything we can see, feel and taste, so the issues the industry has faced are apparent to both businesses and their customers. We’ve experienced three straight years of the highest demand for materials handling equipment of all time. In 2021 and 2022, we saw around 350,000 forklifts sold each year according to the Industrial Truck Administration and some lead times stretching past two years. Today things are starting to retract from the record-breaking demand. We should not overreact.
As customer demand slows, facilities are likely to reduce budgets and emphasize efficiency —specifically automation. Many people approach the idea by simply buying new technologies before they’ve thought thoroughly about what they actually want to accomplish. The result can lead to the potential for even more disruption instead of the intended advantages.
Here’s how you can plan for improvement, optimization, and automation while budgets might tighten:
Understand How We Got Here
In 2020, essentially every industry came to a standstill. In the materials handling industry, economic uncertainty led to low demand, then a steep rebound almost immediately as people realized life would be changing for a while. As the industry tried to turn back on, there was a shortage of labor, materials and shipping that drove up lead times for product. Now, as the gridlock and backups are easing, we’re all learning how to return to what was previously our normal. Understanding how we got where we are today is the first step in understanding what challenges your business might face in the coming months and years and how to prepare for them.
Document How You Do Things
You can’t create what you believe to be corrective action on a problem before you fully understand the root cause of the problem. The only way to improve your processes is to start by documenting in detail the current system in place. Take some time to do this with your team and note where things might be breaking down or have the opportunity for improvement. Are you dealing with labor shortages? Do you have equipment that needs repair or replacement? Are there any unnecessary steps in your processes?
Set Realistic Improvement Goals
Start by examining the customer demands you’ve likely heard time and time again. It could involve reducing reliance on labor, shortening long waits or sustainability concerns. Use the concerns from your own customers to inform improvement areas, and keep these goals related to fixing defects in your processes within your company. This should be specific to your own facilities, your own processes, and your own customers—generalizing might not give you the best ROI. Understand that to move to successful automation, you should choose to move slowly and optimize your current processes before spending on expensive equipment you might not be ready for.
Create A Plan
Your improvement plan should include the team you’d like to drive change—whether that’s fully internal or involves an external partner. As you work within a budget, make sure external partners are not leading you hastily into a solution since one solution might not be the right one if you haven’t reorganized your business to optimize first. After bringing efficiencies into your business models and improving flow, the automation path should become much clearer.
Measure And Continue Improvement
As you start to add up the improvements made from small changes, you can eventually move on to the bigger ones. Find which strategies worked best, and continue to implement them until you’ve reached a point where automation seems like the next logical step. The process of improvement starts over with each new initiative, so start from the beginning each time to successfully implement lean manufacturing. At the end of the day, work smarter not harder.
The goal in all of this is to create the most efficient, safe and productive facility you can. Getting to that point is a process—you’ll never have the perfect solution, so the true measure of success is continuing to try, fail, and try again until you’ve made progress. Documenting, optimizing, then automating can be a helpful rule of thumb to help you on your way to that progress.
Carlin is Chief Sourcing Officer and Executive Vice President of Racking and Automation at TFS, an OnPoint Group Company and the leading provider of brand-independent turn-key materials handling and fleet management services.