MRO comes to materials handling

As a new entrant in the market for automated goods-to-person picking solutions, Jeff Hedges, president of OPEX Material Handling, understood that he had to do something to allay the concerns of potential customers who might be comparing his solution to one from a more established competitor. “We understood that customers are not only going to ask if we have sold and installed systems, which we have, they’re going to ask how are we going to support them in the future,” Hedges says.

As a result, Hedges decided to compete on its solution and its service, offering one year 100% parts replacement and service from OPEX-certified service technicians as part of all contracts. “The contract essentially takes the guesswork out of budgeting for ongoing maintenance and support,” says Hedges. “Service technicians can typically respond within 2 hours and OPEX maintains and owns all required spare parts either on-site at our customer’s location or at a nearby location.”

OPEX is certainly not alone in its approach. MRO—maintenance, repair and overhaul—is emerging as a new best practice, one that is becoming every bit as important as the technology chosen for a system. MRO is also emerging as an area of competitive differentiation among leading automation providers, who are now touting the depth of their technical bench, their ability to monitor a system 24/7, and their expertise at service parts management.

This trend is customer driven. “As recently as three or four years ago, service wasn’t mentioned until after the system was installed,” says Martin Maier, Knapp Logistics Automation’s vice president of projects and services. “Today, customers are asking detailed service questions in their RFPs.” In fact, according to Maier and others, the customer service manager is now likely to be part of the initial sales presentation. Similarly, customer contracts now detail the level of spare parts inventory a supplier will stock to support the customer’s system.
The trend is also driven by the increased importance of uptime in a world where stores keep less inventory on the shelves and e-commerce has increased customer expectations. “With just-in-time delivery, the sequencing of orders to the pack stations and crossdocking with critical paths from receiving to shipping, a few minutes of downtime can bring everything to a stop,” says Kieran Ryan, director of field service for Intelligrated.

Consider the following three examples:
• Two years ago, Daifuku North America acquired Elite Line Services, one of the world’s largest providers of operations support for airport baggage handling systems and passenger boarding bridges. Daifuku North America plans to leverage that expertise to offer resident maintenance programs to its distribution customers, according to Roger Olle, Daifuku North America’s director of technical services.

• At Modex last March, Dematic showcased Sprocket, the MRO software application it gained with the acquisition of Upturn Solutions, a provider of Computerized Maintenance Management Systems (CMMS). The software is now part of Dematic’s Resident Maintenance Program, which provides on-site technicians and maintenance personnel to DC operators.

• Intelligrated is partnering with Columbus State Community College and the state of Ohio to certify 100 service technicians a year for the next three years. That will bring Intelligrated’s team to nearly 550 technicians. They’ll provide on-site technical and maintenance services to DC operators across the country.

They are not alone: most industry leaders, including Swisslog, Schaefer Systems International, Dematic and Knapp, are providing resident maintenance services, technical training, 24/7 remote monitoring and access to a help desk and service parts management.
What’s more, third-party organizations like SDI, that manage the maintenance, repair and operations supply chain for manufacturers, has had discussions “with companies in a non-manufacturing environment” that would include distribution, according to Ron Fijalkowski, SDI’s CIO.

It’s complicated
Driving this new level of interest in MRO is the increasing complexity of today’s software-driven systems, especially those designed for e-commerce and grocery and beverage distribution. In fact, in a recent survey of Modern readers, nearly 40% agreed that automated systems have become harder to maintain and 54% reported that it is very to extremely difficult to find technicians qualified to maintain complex systems (see story p. 22). “Uptime is more critical than ever, and you have to ship things in a very smart way,” says Robert Nilsson, vice president and general manager, software and supply chain intelligence, for Dematic. “Those are made possible by the software and controls running the systems.”

If a conventional materials handling system goes down, the repair is often mechanical—swapping out a motor or replacing a conveyor belt. The facility can often keep working with manual processes until the system is up and running again. In the software or controls fail in one of today’s highly automated systems, the whole system is likely to be down until the problem is isolated and repaired. It could be mechanical. But, it could also be the result of a software glitch, a faulty scanner or a sensor on the fritz.

Meanwhile, maintaining these systems requires a level of technical skill known as mechatronics that most distribution center maintenance personnel just don’t have. That makes the customer more reliant than ever on automation suppliers with a team of certified techs. “You need to have technicians who are comfortable with software applications, who understand programmable logic controllers (PLCs) and how the data exchange works,” says A.K. Schultz, vice president of customer service for Swisslog. “The maintenance teams present in distribution centers are used to fixing lift trucks and air curtains. There just isn’t a deep talent pool with that kind of technical skill.”  

This is nothing new to other industries where uptime is essential, such as commercial aviation, mining and heavy manufacturing. MRO has been a best practice in those industries for decades. Best-of-breed software packages have been tailored for planning and managing maintenance events by industry. And, the ability to forecast the demand for critical spare parts and position them in a network is essential. Now, the materials handling industry is adopting some of those practices.

Based on conversations with some of the largest industry players, there are at least three components to the maintenance programs available today: the maintenance services themselves, service parts programs and MRO software applications developed for the industry.

Keep it running
Solution providers are offering a range of maintenance services. They run the gamut and are dependent on whether their customers view maintenance as a core competency. “Early adopters of automation discovered very quickly that the skill set, pay scale and even the job descriptions for their maintenance personnel were not suited for the new systems,” says Chris Krafft, who oversees technical services for Schaefer Systems’ automation division. “We also see customers who are new to automation and are concerned that they won’t be able to keep the systems running.”

The early adopters, Krafft says, either make the investment to upgrade their technical pool or outsource maintenance to a solution provider. “One of our big retail clients had their technicians work with us on the installation so they were ready to support the system when it went live,” Krafft says. “We spend a lot of time reassuring less experienced customers that we have the infrastructure in place to support them as they make this leap.”

Typical services include:
Training: Leading providers like Daifuku North America provide in-house training on their equipment for their customers. Knapp Academy offers customers on-site training, certification classes at Knapp’s facility in Georgia, and e-learning.

Virtual monitoring: Whether you call it 24/7 customer service or a 360-degree service package, almost every service provider has the ability to monitor its customers’ systems around the clock, remotely troubleshoot and diagnose service issues and provide telephone support to mechanics and technicians.

Auditing: Even a system that’s up and running may not be operating at peak efficiency. For that reason, most providers offer annual audits to ensure that the system is meeting the customers’ business objectives. Swisslog calls this “throughput assurance,” according to Schultz. “You buy a large system with an ROI and expectation of throughput,” he says. “If your business changes, we look at how the system can be enhanced to support those changes.”

On-site maintenance: These services run the gamut from working with a customer’s planning and engineering departments to maintaining critical pieces of equipment to maintaining an entire facility, including the docks, HVAC and electrical systems. Intelligrated, for instance, is staffing resident maintenance centers in metropolitan areas or logistics hubs where many facilities are located. “We view it as risk mitigation,” says Intelligrated’s Ryan. “We can offer technical phone support, spare parts delivery services, manage the areas of highest risk or handle maintenance for your entire facility.”

Right part, right time
Right part, right place, right quantity and right time is as important in maintenance as it is in order fulfillment. It’s also a balancing act, since no one wants to shut down operations because a repair isn’t available. At the same time, no one wants to invest more in expensive repair parts than is needed to keep a facility running.

Spare parts management begins with “provisioning.” When a system goes live, the solution provider recommends a package of spare parts that is tailored to the customer’s system. “We will create the package with A, B and C parts, based on criticality, so that a customer can decide if they want to stock the whole package or a portion of it and rely on us for the rest,” says Knapp’s Maier. He adds that Knapp sends out parts on a daily basis. Most have services to expedite parts on an emergency basis.

Many customers are outsourcing parts management to their system suppliers. Similarly, suppliers are creating their own networks of stocking points, managing inventory at their customers’ storerooms and shipping parts from one customer’s storeroom to another customer to expedite a part. “We have a variety of service models, ranging from consignment to customer-owned inventory to our own distribution network to partnerships with suppliers who agree to maintain and ship parts for us,” says Swisslog’s Schultz. “We will have a part stocked somewhere in the United States that is available for rapid delivery.”

Daifuku North America’s Olle notes that some automotive customers require 24-hour turnaround on parts orders. “In those cases, we strategically locate warehouses that can support a location on a 24-hour basis,” he says. “Those discussions are now taking place at the RFQ stage.”

Software makes it happen
Software isn’t just powering automated order fulfillment systems. MRO software tailored for the distribution industry is also coming to the fore.

The most visible example is Dematic’s acquisition of Upturn Solutions, an application that Nilsson describes as “robust, cloud-based maintenance software” that enables Dematic and its customers to track equipment, spare parts for the equipment, as well as the technicians working on the equipment.

Other providers are also investing heavily in maintenance software. Knapp, for instance, has developed a cloud-based software platform dubbed e-insight that allows a warehouse manager, operations team or technician to log in through a mobile portal and gather real-time operational data, maintenance and service reports, and other key information. A separate on-line, audio-visual tool allows on-site technicians and Knapp technicians to collaboratively troubleshoot, diagnose and repair an issue. By outfitting the local technician with a headset and microphone equipped with a camera and display, a remote Knapp technician can see the same live view. Once a problem is diagnosed, the local technician can pull up a manual and see a display of the repair that needs to be done in the visual display on the headset. “Visualization allows you to prevent any misunderstandings,” says Knapp’s Maier.

What all of these solutions highlight is how MRO in North America is maturing as a best practice. “In Japan, where our parent company is located, our customers don’t have maintenance teams. That’s all handled by the materials handling equipment supplier,” says Olle. “You have certified technicians who maintain the equipment. We’re now seeing our North American customers, including our distribution center clients, rely more on us as well.”

Companies mentioned in this article
Daifuku North America: daifukuNA.com
Dematic, dematic.com
Intelligrated: intelligrated.com
Knapp Logistics Automation: knapp.com
OPEX: opex.com
Schaefer Systems International (SSI): ssi-schaefer.com
SDI: sdi.com
Swisslog: swisslog.com