What might keep a company from investing in efficient intralogistics solutions to gain an advantage over the competition? I think that there are often a lot of doubts about the right course of action. From an outsider’s point of view, the intralogistics industry can be confusing in many ways. There are plenty of different systems, processes and technologies available on the market. Some of them are complementary, others are mutually exclusive. This leads to uncertainty and hampers further actions, sometimes as far as consolidating the status quo.
This happens although the objective is already clear: efficient intralogistics. It means achieving your goals with the most economic use of your resources. But which ways are going to lead you there?
To provide some means of orientation here, I listed 7 ways to efficient intralogistics. These points are basically a suggestion, to think critically about your company’s intralogistics. They will be most useful to those, who don’t deal with this topic on a daily basis, yet can’t ignore it completely.
When this subject is outside your “home turf”, you might fail to consider something essential when searching for intralogistics products or services. It might then lead to serious disadvantages later on, when the purchase has already been made. Of course, you should always get expert advice, but even then, your are certainly better off when you’re able to participate in the conversation. Maybe this blog post will allow you to avoid a costly mistake. If not, it only took a few minutes of your time.
1. Keep your systems up-to-date
Let’s assume you just invested into your intralogistics. What do you think: how long can you lean back now and watch, until your newly purchased equipment becomes outdated? The answer: the moment the producer hands you the keys is the moment a process of deterioration starts. Technological progress is unstoppable.
Although this progress is of a positive nature, it might render your shiny new facility technologically obsolete in a couple of years, if you don’t update it. Suddenly then, you have to think about buying new equipment again, at high costs.
But there is another way. It pays off to stay in touch with the intralogistics provider and look into new components, the latest software updates, and so on. In many cases, regular and timely updates, the right training for your crew, and some new components increase the life expectancy of the entire facility. This will lead to regular, yet lower costs in total, compared to purchasing new stuff after many years without modernisation.
Are you concerned about striking long-term service and maintenance deals with your supplier? Don’t worry! Browse the market and you’ll find companies ready to maintain not just their own installations, but third party systems as well, and in a professional way. You have plenty of alternatives.
2. Always do the math
Every company in a market economy has to earn money. Those who don’t, will disappear from the market. Granted, there’s nothing surprising about this fact, but it still gets ignored quite often. When you consider purchasing intralogistics products and services, don’t forget about the balance sheet. Ask your supplier about the operational costs of his systems and how long it takes them to break even. Look at different scenarios, not just best-case, but also worst-case and the most likely development.
The longer it takes for a system to break even, the larger the margin of error in your predictions. So if the business doesn’t grow as planned, the facility is constantly operating below capacity. This pushes the break-even still further into the future and your money is tied up in an oversized facility.
It is definitely a good sign when a prospective intralogistics supplier inquires thoroughly about your business model and individual processes, before pitching an offer. It indicates that they are not going to deliver some run-off-the-mill system, but something customised according to your particular needs. This makes it more likely to reach the break-even as predicted.
3. Reliability is the key
Intralogistics solutions need to be reliable. Your facility can only earn money during up-time. So any down-time in your operation will usually reduce your earnings.
This aspect is most relevant when it comes to systems with a high degree of automation, but also concerns the cooperation between humans and technology. People are a potential source of error, which makes it the task of technology to support them. Under ideal circumstances, even semi-automated system will provide the reliability you need, but at lower costs.
Of course, this point would be complete without mentioning modern technologies. Suppliers are keen to sell their most recent developments, even if these systems haven’t proven themselves yet. This might be risky for the customer. It doesn’t mean though, that you should refrain from purchasing new products and solutions, because technological progress can only happen if people are willing to adopt it. New technologies sometimes have teething troubles, but they shouldn’t be too difficult to deal with. The real problems start when an intralogistics company turns your shiny new distribution centre into a test site for half-baked products. It is therefore absolutely justified to ask for references, which means comparable installations that are already working reliably.
Points 4 – 7 are the subject of part 2 of this blog post.