Day 2 at Modex: From solutions to services

Several years ago, I wrote a story I called “From Product to Solution. The trend we’d noticed at Modern was that for years, industry members had focused on manufacturing the best hardware they could make. It was then up to the engineers at end user companies to figure out how to make the pieces fit together to solve their problems. That was great when end users had staffs of engineers. But over time, the user community got lean and began looking to others to design solutions for them. That led first to consulting companies and then to equipment manufacturers with design capabilities. In recent years, those hardware folks became solution providers.

Walking the floor at Modex, I’ve noticed a new trend. We’re moving from solution providers to service providers. That was driven home with a meeting on Tuesday with Skip Miller, a VP of customer service and solutions with CHEP. For years, CHEP was a provider of pooled pallets to its customers. “We sold pallets,” is the way Miller described it. Along the way, CHEP had to get very efficient in its supply chain processes in order to stay competitive with other entrants into the field. In doing so, CHEP realized it also had gained a lot of knowledge about its customers’ supply chains. CHEP knew at what manufacturing sites it dropped off pallets for its customers; it also knew where its’ customers were shipping pallets because CHEP had to pick them up. In conversations with customers, CHEP also learned about their pain points, like the number of empty trips those customers were making. The result is a new set of services, like matching its customers’ empty trailers with back hauls of pallets to a CHEP service center.

“We estimate that last year we generated $13 million in supply chain savings; eliminated 4.5 million empty miles; and generated $5 million in additional revenue for our customers,” Miller said. At the show, I had other discussion with solution providers who were developing services based on the information they were gathering about their customers’ supply chains. Think of it as “From Solutions to Services.” It’s a trend I expect to see continue.

Robots Revisited: On Tuesday, I also had a chance to talk to Kevin Reader, the business development director at Knapp, about a robotic picking. One of the things I’ve been interested in is where are we on the adoption curve of robotics? If we’re still in the emerging stage, where I think we are, what will it take for the market to move beyond kicking tires. Reader said that Knapp is deploying robotic piece picking solutions in Europe, but for now, those deployments tend to be in what he describes as “high value, zero defect” environments, such as pharmaceutical, where accuracy is paramount over the cost of labor. What will it take before we see robotics in more mass market applications?

“Right now, its generally more economical to put in an ergonomic work station,” he said. “But, if we begin to see minimum wages go into the $15, $20 and $25 ranges, I think robotics will become more in reach.”

The cool factor: I always look for a solution that seems simple but, well, cool. This year it was a pick-to-light solution from Visybl that was on display Barcoding’s booth. The light solution was a very small and portable device that could be easily attached and detached to picking locations in a pick zone. When an associate scans the bar code on a tote or container, the location to be picked lights up and the number of items to be picked is displayed on the mobile computer screen. Configuring or reconfiguring a pick zone looks as if it could be done in really short order.