The Big Takeaway from MODEX

Having just returned from several days at MHI’s MODEX at the Georgia World Congress Center in Atlanta, I was asked by many of my colleagues what the big takeaways were from this year’s show. Other than the obvious observation that MODEX is a growing and well-attended trade show and conference, I came away with the distinct impression that the traditional horizontal, labor-intensive approach to warehousing and distribution in the United States is right on the cusp of being eclipsed by the more highly automated, vertical European approach.

In the United States, distribution centers have always expanded horizontally because of our abundance of land and relatively inexpensive labor. Throwing “bodies” at the challenges of growth has been a reasonably effective strategy for many companies as their operations have scaled. And those companies that have embraced automation have typically employed the kinds of proven workhorse technologies - conveyors, sortation systems, pick modules and the like - that are easily expanded horizontally (and to a lesser extent, vertically) and offer very reasonable payback periods. These technologies have enjoyed continuous improvement over decades and now offer tremendous reliability and productivity. In short, the horizontal model is not broken.

Nevertheless, what I witnessed at MODEX is a discernible explosion in interest in the more advanced, goods-to-person technologies largely pioneered and perfected by European companies. Even the U.S. conveyor systems giant Intelligrated is getting in on the act by announcing a partnership with German company Gebhardt to introduce the Intelligrated OLS (One-Level Shuttle) that is ideal for operations with high-turn inventory storage and short order cycle times. This highly efficient automated storage and retrieval system provides quick access to individual cartons, totes and trays in a minimal footprint.

At the same time, Intelligrated and Swisslog announced the formation of a strategic alliance in North America to provide highly integrated material handling solutions for the food, beverage and retail markets. Swisslog’s sophisticated warehouse automation products and integration services will be available alongside Intelligrated’s U.S.-manufactured technologies. Clearly, Intelligrated perceives a market shift and is responding to the lead that archrival Dematic has in the goods-to-person space with its Multishuttle 2 AS/RS system for automated storage and retrieval of cartons, small parts or other stored goods.

Similarly, visits to specialized European manufacturers, like the shuttle technology inventor KNAPP, which has been setting new standards in warehouse logistics with the OSR Shuttle for more than 10 years, and advanced sortation systems provider Beumer, revealed ever-increasing interest in their solutions. Even the Kiva Systems robotic goods-to-person solution, now under the Amazon Fulfillment mantle, made a reappearance at MODEX. Although not yet available again to the general market, it’s clear that Amazon intends to ultimately monetize its large acquisition cost by bringing Kiva back to the market.

And lest I credit every innovation in our space to the Europeans, OPEX Corporation’s Perfect Pick goods-to-person order fulfillment technology generated considerable interest, including from several FORTE clients. Perfect Pick’s advantage, aside from being manufactured in the United States, is that it is easily scalable as a company grows.

These are clearly exciting times for companies willing to embrace the more advanced technologies that have been successfully deployed in Europe for some time now. The big takeaway from MODEX is that if you’re a company experiencing dramatic growth, particularly in e-commerce, you are well advised to investigate these technologies.

FORTE is exactly the kind of objective, expert partner that can help you make these evaluations and determine whether there is a solid business case for deploying them in the coming years.

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