60 seconds with Jeremy Davidson, Fortna

Jeremy Davidson, Fortna
Title: Industry lead in sporting goods and retail specialty group.
Location: Reading, Pa.
Primary Focus: Working with retailers and industrial distributors on how best to make their facilities function and operate.

Modern: We saw a nice bump in the revenues of the Top 20 system suppliers last year. As companies continue to automate, are they looking at technologies differently than in the past?
Davidson: I think they are. I see my customers moving away from point solutions and technologies that are focused strictly on labor productivity, like a voice or pick-to-light picking solution. Instead, they’re addressing the overall operational flow through the facility. For instance, end users are realizing that they can put in a great picking solution, but they can’t improve their inventory turns if their inbound inventory sits on the receiving dock. So, there’s a concerted effort to look at the operational flow through the whole building and to not just look at functional areas for improvement.

Modern:  Does that mean that end users are finding ways beyond a reduction in labor to justify automation?
Davidson: Absolutely. The biggest change is that our customers are designing facilities with capabilities to match their business strategy. We have customers who are willing to pay a premium in the cost of distribution because it will result in service level improvements. The growth of e-commerce, in particular, is pushing us to discussions around much richer business cases than we saw five years ago. Companies are asking: What is the cost of doing nothing? How much am I putting the business at risk or constraining the business if I don’t make these investments and my competitors do? Those are the kinds of questions they’re asking today that they weren’t asking five years ago.

Modern: If that’s the case, what’s different about the systems they are deploying?
Davidson: This is a great topic. First, let’s talk about the things that aren’t changing. The time-tested principles of design, such as the shortest path, the least number of touches and effective slotting, haven’t changed. What is changing is the look of process solutions. Customers are looking at their inbound operations for ways to automate receiving, streamline returns or opportunities for crossdocking. They’re looking at ways to mix and match technologies and solution providers to optimize solutions or to adapt processes that have worked in one functional area to other functional areas.

Modern: What are the trends driving these changes?
Davidson: There are a number of trends. One is the rising cost of real estate. For instance, customers might be looking at storage and asking how they can generate more capacity within the same footprint. That is leading to discussions around using mini-loads, shuttles and automated storage and retrieval system (AS/RS) technologies to bring product to a person or a storage area.
Safety is a significant concern. For instance, customers want to increase the number of items picked per hour, but they want to make sure the operation is safe, reliable and consistent. We’re also talking to customers who may have a solution in place, like a picking mezzanine, that isn’t fully depreciated. They want to leverage that existing infrastructure, but get more throughput. That’s leading to solutions like batch picking to a cross-belt or tilt tray sorter that can handle store replenishment and e-commerce orders. There are a number of rich discussions going on right now, and I don’t see these trends ending any time soon.