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Intelligrated InSights

The hidden cost of non-OEM replacement parts

While it can be tempting to reduce short-term operational costs using non-original equipment manufacturer (OEM) parts, cutting corners can lead to crippling unplanned downtime and out-of-warranty equipment damage.

Read on for seven BIG reasons why every facility should be well-stocked with OEM-engineered replacement parts.

1. The true cost of ownership

While hidden costs are not obvious at the time of purchase, smart buying decisions account for the complete cost of ownership. OEM parts are designed to last and meet mean-time-between-failure expectations for preventive maintenance programs. They perform to specification, with no negative impact to ancillary parts.

2. Designed and tested not just to fit, but to function

All materials used in OEM parts satisfy requirements of high-friction applications in which parts interface with each other. Sure, there are some non-OEM parts that function without any apparent issues, but they may just be a ticking time bomb due to inferior build quality and hard-to-detect manufacturing imperfections.

3.  The generic part may not be the same as the current OEM replacement

Operations cannot rely on non-OEM suppliers for the latest version of a replacement part. Through the life of equipment, OEM engineers make continuous design enhancements and produce updated iterations of replacement parts. OEMs send updates of new part modifications and availability to ensure enhanced performance and true lifecycle support.

4. Generic parts may come with a “warranty,” but it stops there

Some generic parts come with a warranty, but those are replacement only and do not cover damage caused to other system components. Furthermore, original system warranty compliance requires the use of authentic OEM parts to prevent damage to ancillary parts and systems – the use of generic parts may void the system manufacturer’s warranty.

5. The right part at the right time

The only thing worse than inferior parts is having no parts. When operations require a tight deadline to source a replacement, the OEM is well-prepared with installation information and order histories to instantly know operational needs.

6. Don’t risk an accident due to a poor performing non-OEM part

Faulty generic parts can compromise machinery and expose operations to safety risks. Exclusively stocking reliable OEM-warranted parts increases the facility safety and helps shield operations from costly litigation stemming from workplace injuries.

7. Access to the experts

Most OEMs have 24X7 technical support available to find the best possible solution and ensure that operations never take on a problem on their own. OEMs can assist in lifecycle planning and provide key information on “critical spares” to drive smart budgeting to control maintenance and labor costs.

For more information on the advantages of using genuine OEM spare parts, download the Intelligrated white paper, “The value of OEM genuine parts vs. the cost of generic parts.” 

How dimensional weight pricing changes will affect your e-commerce order fulfillment

The news

FedEx Ground and UPS recently announced dimensional weight-based pricing changes for shipments measuring less than 3 cubic feet beginning in 2015. Dimensional weight is the theoretical weight of a package calculated at a density chosen by the parcel carrier. This method allows the parcel carrier to better equate the volume of space consumed on a delivery truck to the price it charges for that shipment.  Prior to this change, items smaller than 3 cubic feet were priced based on actual weight and larger items based on actual size.

Figure 1 - Dimensional weight calculation

So what does this mean for e-commerce?

Currently, e-commerce consumers are not penalized with extra shipping costs for well-packaged small, lightweight or non-dense items smaller than 3 cubic feet such as apparel, electronics and cosmetics. Imagine ordering a small and fragile electronic device online.  If that product ships to you packaged inefficiently in a 17” x 17” x 17” carton today, the shipping charge should be the same as if it were to ship in a small bag. This will not be true in 2015 because new, dimensional weight shipping calculations mean that the cost will be lower for an efficiently-packaged small bag.

Under new pricing rules, the cost to ship a 5-pound package with a volume of less than 3 cubic feet can increase by 42 percent for a delivery less than 250 miles. Densely packed shipments won’t see a change and will continue to be priced based on their actual weight if it exceeds nominal density threshold. A Wall Street Journal report cited ShipMatrix’s data analysis of the industry, which found that 32 percent of all ground packages will be affected by this change, a majority of which weigh less than 5 pounds.

The transportation pricing policy change will significantly affect the efficiency of e-commerce fulfillment operations. Standard carton sizes just below 3 cubic feet were most economical to ship and moved efficiently through material handling systems. These systems have been optimized for medium to large size cartons with flat bottoms and square corners. Now DC operators will likely see a decrease in overall package dimensions to accommodate new dimensional weight pricing and an increased range of smaller package sizes. 

Figure 2 - FedEx Ground and UPS Ground pricing

Figure 2 - FedEx Ground and UPS Ground pricing

What is the impact on material handling system design and equipment?

A UPS e-commerce study revealed that more than half of online shoppers have abandoned a cart due to estimated delivery date and 61 percent cited shipping costs as the top reason for cart abandonment. In order to keep shipping costs down and avoid cart abandonment, e-commerce operations will turn to more economical packaging. Material handling systems have seen a dramatic increase in automated polybag handling in recent years, and as the e-commerce industry works to meet customer’s service expectations with cost-effective shipping options, that trend will only accelerate.

Furthermore, as e-commerce shipments grow, so do return volumes. Industry experts say that consumers return 25-50 percent of all goods purchased online. As these pricing changes take effect, returned goods are sure to follow the same trend as outbound orders, with increased use of polybags.

When preparing for increased small items and polybags, operations must consider unique package handling challenges and expected material handling system applications. See below:

When a polybag is not a polybag:

  • Thin poly shipping envelopes - lack structural integrity
  • Bubble packs - provide improved structural integrity but make the item less dense and more costly to ship
  • Consumer packaged bundled goods - bundle tightness can significantly affect conveyability

Polybags present special conveying and sorting challenges

  • Non-flat sides - complicate skewing and alignment
  • Non-flat fronts and backs - make accumulation difficult
  • Round surfaces - create difficulty keeping labels on top
  • Cylindrical shapes - make it difficult to maintain consistent position on a moving surface
  • Small items in big bags - create more catch points
  • Light-weight items - risk taking flight due to high-speed conveyance or large cooling fans

Material handling system operations with polybags:

  • Bulk conveyance - common in the parcel industry
  • Automated singulation - requires significant capital investment and occupies significant floor space
  • Manual singulation - more flexible practice can scale to match business volume
  • Singulated flow with accumulation capability -difficult due to packaging surface challenges mentioned above
  • Gapping and tracking for sortation - traditional sensors struggle to detect the true beginning and end points of polybags
  • Frictional diverting (wheel or roller sorters) - accuracy varies widely by technology and product mix
  • Positive sortation (sliding shoe sorter) - the right slat and pusher shape can reliably handle polybags
  • Dedicated tray sorting (tilt tray or cross belt) - item is captured and easier to track through the sortation process 

Where do we go from here?

Contact your solutions provider to discuss the effects of polybags on material handling systems and develop a plan to ensure high-throughput, uninterrupted e-commerce fulfillment.

For more information, read the Intelligrated white paper, Sorting out your sortation options, or view videos of tilt-tray and cross-belt sorters, conveyor solutions and sliding shoe sorters in action.

Automated palletizing eases the flow at Lost Coast Brewery

Ranked the 37th-largest craft brewery in the United States in 2014 according to the brewer’s association, Lost Coast Brewery capitalizes on the cool maritime climate and the exceptionally clean water of the Humboldt Bay region of northern California to craft award-winning ales.  The brewpub outgrew its original space and moved to a larger facility where its production eclipsed 50,000 barrels for the first time in 2009. Now, Lost Coast beer is available in 22 U.S. states, Puerto Rico and three Canadian provinces.

With production levels increasing to meet fast-growing demand, owner and master brewer Barbara Groom saw the potential for adopting automation to replace the brewery’s existing practice of manually building case-load pallets. With plans for a new, faster bottling line in progress, Lost Coast needed an automated palletizing system to keep up with increased production and improve worker safety.

“Hand palletizing is not a good thing and I was worried about injuries,” said Groom. “We knew automation was inevitable and this was the right time to make the investment.”

To avoid disrupting the brewery’s production systems, the new automated palletizer had to fit in the same space as the legacy manual palletizing operation, a feat Lost Coast had not even thought possible.  Through preliminary system design and layout work, Intelligrated confirmed the feasibility of an automated solution within the existing space. To familiarize Lost Coast with the equipment, John Fisher, senior sales engineer, Intelligrated, took Lost Coast stakeholders on a field trip to other installations to see automated solutions in action.

“That was really valuable,” says Groom. “He wasn’t just showing us something he thought we’d buy, he was showing us something that we should know about as we design our place and look to the future.”

After evaluating three vendors in 2012, Lost Coast selected Intelligrated as its preferred end-of-line automation partner, for its combination of exceptional service, design consulting services and robust equipment.

After testing multiple layouts to ensure minimal interference with existing systems, Intelligrated provided an Alvey® 780 series conventional palletizer integrated with Accuglide case conveyor and an automatic stretchwrapper to complete Lost Coast’s end-of-line solution. The Intelligrated team began installation on a Thursday and completed it over the weekend, with the new palletizing system receiving cases the following Monday.

The Alvey 780 keeps Lost Coast’s current production flowing smoothly at a rate of 10 cases of 24 bottles per minute, and can scale up to rates of 28 cases per minute to accommodate future production increases.  The machine gently handles glass bottles, with row and layer pushers programmed to minimize acceleration and deceleration impact. Furthermore, without the burden of manual palletizing, Groom reports happier employees working the bottle line.

“For a company with a similar project, I’d suggest they talk to Intelligrated,” says Groom. “You can easily get it set up and it’ll certainly make your life a lot easier.”

Five ways a resident maintenance program increases efficiency and maintains uptime

Today’s high-speed order fulfillment operations work prolonged hours to meet tight schedules and short order cycles, leaving little time for required repairs, preventive maintenance and benchmarking the relative health of a system.

Complex equipment, controls and software coupled with a shortage of well-qualified personnel, have led more and more facility managers to recognize the myriad benefits of a resident maintenance program. The program helps operations:

1.Solve maintenance staffing and training challenges

A resident maintenance program deploys fully-trained staff and adapts to changing maintenance requirements due to new equipment or seasonal spikes. The risk of losing equipment knowledge due to staff turnover is not a concern as the RM provider institutionalizes this information through a broad base of experts and databases.

2.Control, predict and reduce the cost of maintaining high-tech systems

As operations rely on increasingly complex systems to enable greater throughput, maintenance requirements increase, too. The program provides spare parts for quick repairs, a preventive maintenance schedule, plus instant access to OEM resources and engineering assistance.

3.Reap the benefits of a fully-integrated CMMS

A computerized maintenance management system (CMMS) provides views of every facility asset throughout its lifecycle and enables system-wide maintenance planning, labor allocation and even individual machine-level monitoring to identify repetitive issues and cost of ownership. The system also shares data with WCS and ERP systems to predict system wear and optimize maintenance budgets and schedules.

 

 

4.Prioritize preventive maintenance

When operations run a lean internal maintenance team, preventive maintenance often falls by the wayside, leaving systems vulnerable to unplanned outages and underperforming equipment. A resident maintenance program includes a robust PM program to maximize capital equipment investments and ensure consistent uptime and throughput levels.

5.Breathe easy with contracted uptime

In order to meet important KPIs, operations require sustained uptime. A resident maintenance program contractually guarantees uptime of 97 percent or more. Furthermore, the ROI extends far beyond this number. With guaranteed uptime and maintenance taken care of, operational staff can focus on strategic planning and management functions.

For more information on resident maintenance programs, including real-world examples and information on ROI, read our new white paper, The resident maintenance model

Come see scalable e-commerce order fulfillment solutions at IRCE 2014

E-commerce spending in the U.S. once again grew by double digits in 2013. Online sales tallied $262.51 billion for the year, a 16.9 percent increase from 2012, dwarfing the 4.2 percent increase for total retail sales in 2013.

Growing e-commerce demand means increased competition and a greater need for order fulfillment solutions that ensure fast, accurate shipments and high customer satisfaction.

At the 2014 Internet Retailer Conference & Exhibition (IRCE) June 10-13, Knighted, an Intelligrated Company, will display its range of scalable e-commerce order fulfillment solutions at booth #2051 that provide:

  • Increased orders per day and lines per hour
  • Reduced labor and touches
  • Improved order accuracy
  • Increased on-time picking with minimized walk time
  • Scalability from 1,000 to more than 150,000 orders per day

Knighted software experts will be on-hand to discuss best-fit, scalable order fulfillment solutions that help growing e-commerce operations, including voice picking systems, mobile cart picking systems, pick/put-to-light systems, warehouse management systems, warehouse control software and labor management software. Visitors can also get a firsthand demonstration of Knighted fulfillment execution systems that provide enterprise-level visibility, labor management and workload planning for intelligent, scalable fulfillment operations. 

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