Inescapable market forces are shaping civilization's future. This special issue of Modern is devoted to how the people and technologies in the materials handling and logistics arts will help drive that evolution in a positive direction.

By Tom Andel, Editor in Chief -- Modern Materials Handling, 9/1/2008

There's a bumper sticker traveling our rural roadways that says as much about industry's challenges as it does about the driver of the pickup it's stuck to. It reads: “Who's your farmer?” The message is that you should know your farmer. He should be a neighbor, and he shouldn't have to travel far to keep you supplied. Don't be surprised if you start seeing a bumper sticker on delivery vans in the city, asking: “Who's your supplier?”

That's the future of materials handling and logistics. It has to be, given the economic realities managers face. Look at the price of oil and raw materials. Those aren't likely to fall much. That means the value of anyone involved in logistics disciplines like materials handling will also reach new heights.

This special issue of Modern offers perspectives on how materials handling is being taught and applied, not only to help the industrial world be more productive, but more environmentally and socially effective, as well.

New distribution model

“We can't afford to send raw materials across the ocean to have them manufactured and assembled and then shipped back,” says Dick Ward, who served as executive president of Material Handling Industry of America (704-676-1190) for more than 20 years and is now “semi-retired.” “How quickly we wake up to this will determine if the oil crisis turns out to be a blessing in disguise. Young people have to be thinking this way and begin to think of logistics in a way we haven't before.”

With the U.S. population moving to urban centers, that's where the demand for products will likely be. At the same time, with new and pending restrictions on greenhouse gas emissions, there will be more and more restrictions on how products will be delivered to those consumers. Industry consultant Art St. Onge (717-840-8181, www.stonge.com) says that reality will change the nature of distribution.

St. Onge envisions the construction of strategically located megacenters that store the primary products of multiple suppliers. These giant facilities will deliver to small but highly automated DCs that do automated case handling and build mixed pallet loads. These facilities will be located on the outskirts of those urban metro centers. Virtually no inventory would be stored in these automated facilities and they wouldn't require much labor. These smaller facilities will be served by transportation vehicles more compatible with what's desired in urban areas—non-fossil-fuel trucks, smaller than 18 wheelers—and they will make deliveries on a restricted schedule.

Sound vaguely European? St. Onge agrees. He says these automated facilities will take up less land mass but will be built higher than conventional facilities. This vision represents a great opportunity for the materials handling industry in the next few years, St. Onge believes.

New way of thinking

“I think the materials handling industry, at least those that are able to develop competitive technology, will have a great opportunity in the next five to 10 years,” St. Onge says. “Automation will be essential to changing the distribution patterns forecasted in the near term. However, the people required to manage those facilities, and the organizational structure required to bring them on board and make sure they operate properly, will be substantially different from what most distribution organizations are structured to support today. The educational background of the people who will run these automated DCs and coordinate the activity from the megacenters represents an exciting challenge. That will make this industry much more attractive than it is today.”

Out of the classroom

Russ Meller and Leon McGinnis have devoted their careers to educating tomorrow's materials handling professionals and preparing them to change the way industry thinks. Meller is the Hefley professor of logistics and entrepreneurship and director of theNSF Center for Engineering Logistics at the University of Arkansas (479-575-6196). McGinnis is the Gwaltnevy professor of manufacturing systems at Georgia Tech (404-894-2312). Meller believes the logistics research that has already been done will lay the groundwork for the future.

“Much of the supply chain research done in the last 20 years has involved inventory models, and that will come in handy,” he says. “Inventory may be sitting in one DC instead of 10, but I'll really know where it is and how to get it from A to B if I have to. Companies will be competing on service, how quickly they can get stuff to you.”

McGinnis believes that where systems integration is concerned, however, much more work needs to be done. Interdisciplinary communication is still poor, he says, and he's working on a strategy to bring materials handling up to the same standards as other disciplines.

“A big challenge for the materials handling community is that we don't have a suitably expressive language by which to communicate with each other,” he says. “When the automatic guided vehicle (AGV) guys talk about AGVs they understand perfectly what they're talking about. The same goes for the automated storage and retrieval system (AS/RS) and conveyor guys. But when it comes to describing a global supply chain, or even an automobile factory, you get two extremes: Autocad layouts and spreadsheets on one end of the spectrum and controller code at the other.”

McGinnis doesn't believe a warehouse should be seen as more complex than an integrated circuit with a billion transistors. Yet engineers have a better idea of how to design that integrated circuit because they have the support of computer-aided systems that let them describe what it is they're designing and give them access to sophisticated analysis tools to help them make decisions about that design.

“We don't have anything like that in the warehousing domain,” he says. “I don't have the same ability to describe all the materials handling between the receiving dock and the shipping dock, then push a button and find out things like how fast I can pick an order or how much throughput I can have in a day. Even with simulation tools, every model in the materials handling world is ad hoc. We have to develop more formal ways to describe materials handling systems and how they fit into this larger web of commerce and business they support.”

McGinnis believes his argument is starting to get traction and that new modeling languages are being developed to make his vision a reality. Read on. This issue of Modern will introduce you to more leaders from industry and academia whose visions will drive us to materials handling's future.