It’s time once again for the MHLC

For as long as I can remember, I’ve sat down in a hotel in Utah on the Monday after Labor Day to write a column that began with the phrase: If it’s September, it must be Park City.

For 34 years, that was the home of the Material Handling & Logistics Conference, or MHLC. I’ve attended the event off and on since 2000. I’ve also been on the planning committee since 2011. As I’ve written in this space before, for content alone, it’s one of the best materials handling and supply chain events I attend each year. Future Forward, the theme for this year’s event, is fitting. As a Dematic spokesperson said, the theme reflects the fact that “companies cannot afford to solve only the problems that are put in front of them – they have to anticipate needs, add value and even break the rules once in awhile” if they’re going to succeed going forward.

Of course, this year’s conference is a little different, like everything else. The MHLC launched today as a virtual event, new territory for us all. None-the-less, I’m looking forward to checking out the sessions. In the meantime, I had a chance to speak with Bernard Biolchini, executive vice president and CEO of Dematic Americas, after his keynote address. We discussed several key areas and themes.

Think global, act local: That phrase has been applied to lots of areas, but especially the environment. The concept is that the actions we take in our own backyards have a global impact, regardless of where we live.

Biolchini echoed that mantra when he described the present state of supply chain during COVID. “That mantra got started when I was a student, and it’s becoming meaningful to me as I get older,” he said. “In the pandemic, everything is accelerating in every region of the world. What’s happening in the grocery industry in Europe is happening in the U.S. Consumers are consuming differently everywhere, and will continue to do so in the future.” 

There is also a business and supply chain context. “Businesses have to be global to optimize their costs and make their technologies and services attractive, and that’s true for Dematic. As the same time, supply chains have to be more local than ever because with e-fulfillment and buy-online/pickup-in-store, the supply chain is becoming closer to the consumer.” Put another way, Biolchini said that the backend of the supply chain – inventory management, order fulfillment and delivery, even if delivery is from the retail shelf to a pickup zone in a store – have to be more integrated with the customer-facing front end of the supply chain if companies are going to succeed in this new digital world.

A prime example of the integration between the back-end and the front-end of the supply chain is micro-fulfillment in the grocery industry, or utilizing materials handling automation to fill customer pickup orders in the back of the store for instore pickup or curbside delivery. Dematic, along with some of its competitors, introduced its solution last fall. The challenge for everyone in this move towards more e-fulfillment is “how to make the e-business model profitable.” That was a struggle before COVID, and more so now.

Acceleration more than change: A theme that has come up in a number of recent interviews is that despite appearances, we haven’t seen real change in the last six months. Rather, we’ve seen a significant acceleration of trends that were already happening. Yes, the consumer is ordering more online than ever, but the march to e-commerce was already underway. Now, it’s a full-on sprint. We’ve been in the middle of an automation boom for several years; now, companies are accelerating their timelines, planning to get started soon on projects that were on a three-year roadmap.

Biolchini is hearing the same from Dematic customers. “I believe industry leaders are seeing the opportunity to become stronger and more competitive if they can structure their digital strategy with their supply chain strategy,” he said. At the same time, he added. “I also see a little bit of panic mode on the part of companies that have not paid close enough attention to their supply chains until now. I’m seeing companies asking: What do I do? And What is the right move and direction for us?”

One positive development is that COVID is elevating supply chain to the C-suite. “These are no longer supply chain organizational decision, they are business decisions, and they’re moving to the CEO and CFO.”

Future forward: To wrap up the conversation, I asked Biolchini what he is most excited about looking forward. “Two things,” he said. “Up to now, warehousing and distribution was not on the radar of senior leadership. Going forward, I believe Dematic, and most of my friends from the competition, will become strategic suppliers to our customers. What’s exciting to me is going to be the development of those relationships with our customers.”

The second thing, he added, “is re-invention. I come from the IT industry, which re-invented the way people do business. I believe what’s happening now in automation will be on par with the IT revolution and will help re-invent the commerce of tomorrow.”

SC
MR