SMEs look to invest in MHE to increase operational efficiency and want and need nothing but the best of what’s on offer. Maria Highland looks at the key criteria SMEs need to consider before tying the knot…
SMEs invest in materials handling equipment to facilitate growth, says BITO Storage Systems managing director Edward Hutchison, therefore “it is important that any solution improves warehouse efficiency rather than constrains the company’s growth.”
But before investing in MHE, certain issues like cost, RoI and product suitability need to be taken into consideration.
As Mike Alibone, SSI Schaefer business development & marketing manager, explains: “There should be a clear-cut case of tangible benefits before any investment takes place. The requirement for MHE will be determined by a number of factors, all of which vary enormously between different market sectors and even within each sector.”
He also stresses that the “type of MHE should be carefully considered: get it wrong and there is the potential for the business to suffer catastrophically in terms of both operational inefficiency and financial loss through mis-investment.”
UniCarriers UK sales director Chris Bates sets out a concise list of the what the key considerations should be for a SME when looking to invest in MHE. Included are the following questions: “What positive impact can the investment have on our business? Does the equipment meet future requirement? Does the supplier understand our business’s pressures, values and culture? And will this investment match/fit with any corporate financial conditions and, indeed, provide a positive return?”
In relation to this list, “very few of the above points can be covered by a transactional, features/benefits sales process from a supplier and, furthermore, the information content required to provide a consultative solution is unlikely to be fulfilled by a Google search,” says Bates.
“So, in reality,” he concludes, “the primary consideration of a SME when looking to invest in MHE should be – will an MHE supplier have the expertise and time to invest in providing a solution for our business and do they have a demonstrable pedigree of providing value added solutions to other businesses like mine?”
All signs point to choosing a MHE expert when it comes to implementing new materials handling equipment. Alibone agrees, noting that the service provided would include “data analysis to establish throughput, product type, order structure, FTE head count and future growth forecast to determine MHE requirements and justification by calculating an RoI,” which can be highly beneficial when implementing a solution.
Supporting this, Bates adds that “the key to ensuring a suitable solution for businesses who don’t necessarily contain specific expertise in storage and materials handling, is to work with a partner who is able to demonstrate a pedigree of solution selling. This will ensure that any solution, however bespoke, is relevant to their requirements and provides an economic return that matches business needs,” he explains.
Return on investment will always be a major consideration for SMEs, as cost needs to be kept as low as possible especially as “investment in MHE usually demands a significant capital layout, which may considerably stretch an SME’s finances,” says Alibone.
Luckily, “the funding of MHE is fundamentally quite straight forward,” explains Bates, “with equipment being available on contracts ranging from a few weeks to several years. The complication arrives when a solution becomes bespoke and the MHE required is more specialised and, therefore, less useable elsewhere. These solutions may require commitment to a longer fixed term to cover capital costs, eg automation, AGV and specialist systems, which makes forecasting future demand more important, or the RoI needs to be over a shorter period.”
Alibone supports this, noting that “some MHE suppliers may offer systems on a rent-to-buy basis but more commonly, for SMEs which are clearly growing and undergoing changes in their product portfolios, a more pragmatic approach to investment is required.” And “in this instance, modular, scalable solutions which start off as enhancements and which grow in complexity with the business, are the way forward in keeping the level of initial investment low and subsequent investment manageable,” he says.
And while cost and RoI are key considerations for SMEs, so is selecting the correct product. Which is why “versatility and scalability are key requirements for growing SMEs. MHE providers who can fine tune existing systems as well as provide easily adaptable new solutions serve these requirements best,” says Hutchison.
Likewise, it is not one size fits all for all SME business, and a MHE expert will be able to provide the customer with the optimal solution suited to its needs.
“Each operation – even if within the same market sector – is unique,” agrees Alibone, “with throughputs and product profiles differing appreciably. MHE providers play the vital role of helping to select the correct equipment which can ensure a good RoI and maximum operational efficiency for the SME.”
Each business has its own set of needs, however, “any MHE installed should not be over-specified,” recommends Alibone. “Ideally, a system which, for example, enables the operators to reduce a 3-shift operation to 2 shifts would be the goal but over-specification can result in an expensive piece of MHE engineering being so efficient that it is redundant throughout most of the day or it is only really useful at peak times of the year.”
And “since movement of both product and workforce can occupy a considerable amount of time within an operation,” continues Alibone, “MHE which can be installed quickly to transport product without human intervention offer quick wins. Simple conveyor systems, carton or pallet elevators and AGVs are common and popular examples.”
Automation, such as fully automated storage and retrieval systems, is another option as it is fast, accurate and offers the highest storage density. “Automation and robotics undoubtedly represent worthwhile investments for SMEs,” says Alibone, “especially if we consider robotics in its broadest sense. Already in use in production facilities, in less than 5 years’ time robotics will no doubt be commonplace across a broad swathe of logistics operations as some of the more adventurous, larger distributors have begun to realise their value and will lead the way.”
SMEs can benefit greatly from automation and robotics, but such systems “demand a large investment, with a payback generally measured in years. This must be carefully justified by any operation – but especially by SMEs,” warns Hutchison.
This is not to say that SMEs should stay away entirely from automated solutions. “What we describe as ‘low-level automation’ or ‘mechanical’ solutions, such as carton and pallet live storage, will strike the right balance between investment, density and speed for fast moving goods picked on a First In, First Out (FIFO) basis,” continues Hutchison. “Adding simple automation technologies such as pick to light and voice picking will further improve accuracy and throughput speed.”
Alibone also suggests that the “simplest and least expensive form of robotics likely to result in quick wins for SMEs undoubtedly manifest in the form of AGVs. He explains that “they offer the advantages of low-cost flexibility and versatility for internal transport and do not provide physical barriers to movement in the same way conveyor systems do, while integrated automatic docking stations with conveyors or storage locations remove the necessity for human intervention. They are ideal for low volume throughput and installation and implementation are both rapid, while rerouting and redeployment can both be accomplished with relative ease.”
Likewise, the solution doesn’t always need to be automated. “For SMEs, even simple systems offered with expertise from an MHE provider, can be transformative,” adds Hutchison.
BITO supplies Tigers with a fleet of containers
BITO Storage Systems provided Leicester Tigers with a kit logistics solution which included a fleet of match day logistics containers to improve logistics operations from the Rugby Union club’s Oval Park training ground.
The Rugby Union club has an extensive inventory of kit which is stored at the club’s Oval Park training ground. The team gets through about 10,000 items of kit per season, which includes playing kit, training kit, water-proofs, and medical items such as painkillers, tapes, nutritional supplements, food and drinks for players’ dietary requirements, O2 and stretchers.
Moving kit around the facility and transporting it to venues on match days was a slow and cumbersome task. “Everything was in fabric kit bags, which were often overloaded making then hard to lift and store. We could only carry a couple of kit bags to the delivery van at a time,” said Leicester Tigers kit manager Clive Galloway.
BITO recognised that the whole operation could be improved significantly using stackable plastic containers.
The solution provided Tigers with a fleet of containers and transport dollies in two sizes: 600 x 400 mm footprints and larger 800 x 600 mm units. The containers include three different colours (the Tigers’ team colours) to indicate what is inside.
The system makes it very easy for the kit, medical and conditioning teams to each quickly find the needed equipment when it is being offloaded at the match ground. Likewise, loading and unloading is faster, tidier and more secure. “I can wheel a trolley with a stack of MB containers up to eight high – which is the equivalent of 10 kit bags – on a single trip to the van,” said Galloway.
BITO also installed shelving to house the containers at the training ground. This has made accessing and putting away the kit much easier as well as saving space. Likewise, the containers are lockable with either temporary clips or padlocks, allowing the team to safeguard what medical supplies are dispensed and ensure that supplements or drinks are not tampered with.
“Now that everything is in boxes it has completely changed the face of how we do things,” said Galloway. “You can appreciate a fully loaded van takes a bit of preparation to load up, then unload and place where appropriate in the venue’s changing room. BITO has made our job so much easier – it’s not as time consuming and there is a lot less stress on my back! The medical and conditioning departments tell us the same thing.”
This article first appeared in Logistics Manager, January 2019
