Materials handling clockspeed

Innovation, new business models and new alliances were on display at Promat. It’s a whole new world.

By ·

Clockspeed. If you’re not familiar with the term, it was coined by Charles Fine, an MIT professor, to define rapidly evolving industries – those with a fast clock speed that he likened to fruit flies that are born, mature and expire in a very short time. He argued that “in business today, all advantage is temporary. In order to survive-let alone thrive-companies must be able to anticipate and adapt to change, or face rapid, brutal extinction.“ 

Based on my week at Promat in Chicago, I’d argue that the clockspeed of our industry has been accelerating in an unprecedented fashion over the last three to five years. As one industry veteran put it the other day, there was a ten-year period where we more or less saw many of the same products and solutions at show after show.  Achievements were often a measure of speeds and feeds – the rate at which the equipment could move materials through a DC. This Promat, I had more conversations about algorithms and software, like the one I had with Dematic, than about the mechanical functionality of the equipment.  At the 30,000 foot level, I break the industry developments down into three bullets.

New alliances: The biggest news in the last year of the industry has been the mergers and acquisitions of Retrotech, Egemin and Dematic by Kion; Intelligrated by Honeywell; and Toyota’s acquisition of Bastian and Vanderlande. But it doesn’t stop there. Yesterday’s Wall Street Journal reported that “Plug Power granted Amazon the right to buy up to 20 percent of its shares” based on meeting contract goals. While Kion, Intelligrated and Toyota are taking different approaches to the market, in conversations with their executives, they each predicted an increase in R&D spending that will benefit their individual companies but also the industry – and increase the clockspeed.

New business models: The traditional industry business model is that a company builds a DC and then buys, installs, operates and maintains solutions provided by equipment, technology and software suppliers.  These are still emerging, but we’re beginning to see solution providers turning that traditional model on its head. Witron, for instance, is installing and operating its systems for some customers; Packsize   owns its machines in many facilities and charges by the amount of corrugated used; CHEP has evolved from just renting pallets to monetizing the information it collects about its customer’s supply chains; Tompkins International announced Monarchfx, its e-comm fulfillment alliance, and for some time Dematic, has operated facilities for a heavy equipment manufacturer.

New solutions: Let’s end with new solutions, which is where we have really seen a change in clockspeed. Despite spending more than 30 years in this industry, I am still wonderstruck when I walk the show floor and see how concepts like goods-to-person picking are still being interpreted for specific applications by companies like Kardex Remstar and Cimcorp; and at how shuttles and AutoStore came seemingly out of nowhere to take over a market that was once dominated by horizontal carousels and mini-load systems. Similarly, the cool factor at this year’s event was the adaption of augmented and virtual reality technologies to everything from lift truck operator training at Raymond to piece picking at Bastian. They still have a bit of a science project/pilot feel about them, but watching the demonstrations, you can’t help but feel that someone is going to figure out a way to increase productivity with these new technologies down the road. Perhaps the best example of the clockspeed phenomenon was robotics exhibitors like IAM Robotics, RightHand Robotics, Locus Robotics and OTTO Motors – I know I’m leaving some out, but those were the four I had a chance to visit. What’s exciting about this space, as Jeff Hedges, the president of OPEX, put it, is that many of these companies are from outside the materials handling industry. As a result, they may bring a new perspective to age old problems, that will increase the clockspeed even more. 


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Materials Handling · ProMat · All Topics
Latest Whitepaper
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...

ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...