A Collaborative Approach to Higher Quality and Lower Cost

When a supplier and a material handling systems integrator partner together in a joint process improvement program it should reduce costs and improve quality. But not all partnerships are created equal. So, what should you look for in a partner to ensure a successful approach to joint process improvement?

Long-term partnership

Look for a partner that highly values long-term partnerships. Ask what percentage of their business comes from repeat customers. With a sustained average annual growth rate of 20%, it can be inferred that many of their customers do multiple projects with them (80% repeat business, 20% growth). This type of growth can be attributed to a company that values a long-term relationship over short-term profits. This usually is also a sign of a company that understands if their customers are successful, they will be successful, too. They tend to go out of their way to not only ensure the success of their projects, but to the holistic operation for the overall business success of their customers.

Regular site audits

Look for a partner that has a process for regularly “checking in” on the performance of previously-installed systems. There is an obvious benefit to auditing the technical performance of a system to ensure it’s running optimally. A system that runs with fewer “hiccups” needs less labor for both maintenance and operation, reducing costs. Technical audits should be a free service as part of their customer engagement cycle and can include items such as:

• Review of maintenance performance to ensure the system is delivering at the designed rate and reliability
• Review of controls functionality to identify any changes that may be needed to accommodate changes to an operation
• Review of software configurations to adapt to changing business conditions or IT architecture

In addition to technical system performance, the partner should be comparing best practices from both within your industry as well as ideas from other industries to help you achieve higher levels of efficiency.  Your partner should tour your facilities at regular intervals with your team to understand any changing business conditions, operational flows, or strategic initiatives.  These can all have impacts on system configuration and utilization, ultimately resulting in lower operational costs and higher quality for you. 

Some changes uncovered during site audits that can increase efficiency could be:

• Operational flow enhancements to work around new processes in a facility
• Ergonomic improvements to enhance safety, comfort, and efficiency of workers
• Implementation of new technology to accommodate changing business conditions

Overall, your partner should focus on continuous communication beyond the project cycle to ensure your success in between future engagements.

Proactive monitoring

Does your potential partner have software and controls architectures that allow for remotely monitoring systems?  Reporting metrics can be configured such that alerts are generated as leading indicators of potential subpar system performance prior to issues manifesting in an operation.  For example, triggers can be set for scanner read rates that will flag the need to investigate an issue, even if a redundant scanner is preventing an issue from being noticed in the operation.  By proactively identifying problems, uptime rates above 99% should be achievable.

Flexibility in cost structure

Look for a partner that offers unique capital investment options.  Some examples of investment structures include:

• Capital lease
• Operational lease
• Pay-per-item for outbound shipping operations

Another option is savings-sharing plans, such as joint savings on detailed engineering optimizations.  In this case, savings resulting from design enhancements during the detailed engineering phase of the project in between a purchase order and the equipment being submitted for manufacturing are passed on, allowing both parties to financially benefit from design changes after the order was received.

Examples of the savings sharing plan could be:

• Reduced motor count due to conveyor slaving not identified during initial design
• Reduced power supply count due to wiring optimizations
• Reduced installation cost due to equipment changes outside of RFP specification
• Reduced steel costs due to structural design optimization or capacity specification changes

In all these cases, your partner should be able to issue a negative-cost change order to partially defray your capital investment in the system.

Shared business goals

Is the potential partner committed to ensuring your success?  Since every business defines success differently, your partner should thoroughly understand the business case surrounding each of your projects and be able to adjust their implementation to suit your overall strategic goals. These goals are frequently tied to cost, reliability, accuracy, and quality, but each implementation requires a specific way of achieving those goals.

At a minimum, your partner in a joint improvement process program should be able to meet these criteria, and always be up to the challenge.

Author: Ahmed Arif