Parcel - June 2008 - (Page 13)

tion do not create new bottlenecks elsewhere, or if it does, then to ensure that either the overall beneﬁt outweighs the disadvantages or that a workable mitigation strategy, such as revamping other operational processes, will be executed. Labor Force — Tight or inﬂexible labor markets may justify automation whereas plentiful, relatively inexpensive labor may make it more difﬁcult to justify. Then there is the question of the sophistication level of the automation and local labor’s supporting skill sets. All of these items carry either implied or direct costs and this side of the equation must be balanced with the anticipated beneﬁts brought by automation adoption, not all of which will necessarily be readily quantiﬁable. Regardless, incorporation of tangible and intangible beneﬁts must be considered to arrive at a true comparison. fulﬁllment levels. This process step will help deﬁne realistic cost and beneﬁt ﬁgures to support the Business Case and provide the Project Foundation as a guide for follow-on project phases. Solution Requirements Deﬁnition and Evaluation: Activities in this step build upon analysis completed and information gathered to reﬁne and deﬁne the commercial, functional and technical requirements that will drive solution determination and the corresponding Request for Proposal (RFP). Detailed Project Planning — Once the solution is identiﬁed and the vendors selected, the next step is to complete detailed project planning based on input from all affected parties. Out of this Project Roadmap effort, fully integrated project and resource plans will be developed, itemizing all tasks associated with successful deployment. Detailed Functional Design — This project step continues the drill down into the project needs by performing detailed analysis on how the intended automation equipment and the various associated processes will work together most efﬁciently and how they will interact with other touch-point processes and systems. Typical outputs include fully deﬁned Functional Speciﬁcations and Test Plan documents. Detailed Technical Design, Development and Unit Testing — Building upon the functionality deﬁned in the previous phase, the activities in this step begin by translating the Functional Speciﬁcations into detailed Technical Designs that then form the basis for all required software development and integration testing to ensure the solution is ready for implementation testing and deployment. Automation Deployment — Beginning with additional “in-place” integration and full systems testing, the activities in this step also include facility preparation, training program preparation and execution, potential parallel operational testing and full-shift start-up support. Post-Implementation Support and Audits — An effective auditing program complete with Post-Implementation Support and Enhancement will ensure that the solution continues to adapt to changing business and operations climates, providing extended value and beneﬁcial use. Be sure to join us in the next installment as we address questions surrounding the feasibility of tackling these kinds of projects internally, among many others. Dennis Dearth is Director of Technical Services for TranSystems|ESYNC. Contact Dennis at dldearth@transystems. com, call 419-842-2210 or visit www.esync.com. ■ May 2008 13 How Does One Arrive at the “Real” Cost for Automation Adoption? In order to get to the “real” costs of adopting automation, it requires doing the homework to establish a clear problem statement complete with objectives and target outcomes and to explicitly communicate these items. This will provide the basis and initial assumptions on which the Business Case will be built, including alternative solution scenarios, associated costs and beneﬁts and success metrics. As this forms the basis from which your project will be planned and evaluated, this is an extremely important step and worthy of careful consideration. In addition, it will be necessary to incorporate the project life cycle costs and ongoing operations and maintenance, including materials, consumables, parts replacement, etc. Be sure to add anticipated costs for the physical installation of the automation equipment, including data and power cabling, training, systems integration and process change analysis and implementation. Next, obtain budgetary costs from the two or three providers that are perceived to be the best ﬁt for the project. Seek their input on anticipated complete life cycle costs; however, do your own homework here as well. If the organization has a strong Project Management Ofﬁce (PMO) organization with realistic historical cost data, then leverage that in your estimations. Talk to several customers of the anticipated providers about their experience — and their costs. Utilize professional operations consultants with a strong background in systems implementation (and don’t forget to add a comfortable contingency!) In the end, the scope and complexity of the initiative will drive the speciﬁc project structure and organization for each individual situation. Given that, however, the following presents a high-level best practices overview. Operations Analysis and Business Case Development: In addition to the aspects discussed above, this step will help identify the operational process and facility layout improvement opportunities that should be addressed prior to automation adoption to ensure maximum beneﬁt and success. The focus is to ensure that the facility and processes are properly prepared for adoption under both current and anticipated future sales and www.PARCELindustry.com http://www.esync.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - June 2008

Parcel - June 2008 Contents Editor's Note What Would Augello Say? Success Means Never Being Satisfied Moving from Manual to Automated Fulfillment Regional Carriers Move to the Forefront Understanding Warehouse Management Systems Negotiating Carrier Contracts It’s All About the Data! How Long Will The East-West Trade Imbalance Last? Educate the Shipper, or Fix the Software? Product Profile On the Mark New Products & Services Advertiser Index Wrap Up

Parcel - June 2008

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