Kevin Reader is vice president of marketing for Knapp U.S., a division of the Austrian-based intralogistics solutions and specialized software giant Knapp. He is responsible for marketing and business intelligence, and has been instrumental in helping Knapp grow its North American operations tenfold in the past five years. Before joining Knapp, Reader held senior management positions for an array of logistics automation companies, most recently serving as senior vice president of Perry Banks Integrated Sales & Marketing. He is a member of the MHI roundtable advisory group and has served on multiple boards, including a stint as executive director of the MHI Solutions Community. Reader is based in Atlanta.
Q: How would you describe the current state of the material handling industry?
A: The overall material handling industry is projected to be almost $75 billion by 2030, with a CAGR (compound annual growth rate) of 5.5% and a base (2023) at $51.1 billion, according to Horizon Research. The North American market segment is projected [to grow] almost 22% and expected to have the highest growth rate of any sector. Knapp is one of the top global providers of material handling solutions.
Q: What problems are your customers trying to solve with automated solutions?
A: According to Deloitte Consulting research, supply chain disruptions and shortages ranked most highly on the list of challenges, especially as Covid wound down. Next on this list were hiring and retaining qualified workers, and customer demands for faster response times.
The number one challenge we hear about at conferences, though, concerns labor. This is a broad category that includes an aging workforce, a competitive environment, recruitment, retention, training, and now the use of AI (artificial intelligence) to schedule and reduce direct labor impact.
Consistently, barriers to adoption included the lack of clear business cases, which has been one of the thornier obstacles preventing the widespread adoption of robotics—being driven by CEOs on one hand but constrained by business case proof points on the other.
Q: For companies that rely on manual operations, what are the easiest areas to automate?
A: The most important considerations are the size and budget that you have in mind, as well as what you are looking to spend or accomplish. As a general guideline, companies that are smaller than $1 billion in revenue prefer the dealer/ integrator channel, and those over $2 billion prefer working with a manufacturer that typically has deeper pockets. Basic decision drivers include:
- Strength of balance sheet (the ability to manage large and/or simultaneous projects).
- Product knowledge.
- Do I have C-level, or senior-level, relationships?
- Does the provider have best-of-breed products/solutions?
- Does the provider have in-house software, or is it contracted?
Management stability: Is my preferred partner managed by a VC?Q: Your company is based in Austria. Are you worried about new tariffs on foreign-made goods and how they might affect your business?
A: Tariffs are not good for anyone, and the results have been proven over the years. They can impact both domestic (U.S.) and foreign providers throughout the supply chain. And they impact COGS (cost of goods sold) in many areas. In effect, they are just another tax, and, although the current round has been [tied to efforts] to combat fentanyl and immigration challenges, they should be viewed as taxes that will be recognized as such by the U.S. consumer.
Q: How have goods-to-person systems helped your clients boost productivity?
A: A properly designed goods-to-person system can reduce the number of touches throughout warehousing, distribution, and manufacturing systems. Typically, these touches are mostly felt in replenishment, picking, and packaging.
To maximize the benefits of these systems, it’s important to understand overall business strategy, touch points associated with the systems, and the overall flow of goods. It is also important to understand order volumes, line-item volumes, and rate fluctuations that can occur at short intervals.
Q: How are you incorporating artificial intelligence into your products? Can you share some examples?
A: AI has become a bit of a buzzword in the supply chain, especially by those without a thorough understanding of what is generally required to make automation work. The foundational requirement is that good data is required to make AI effective, but good data is not necessarily the norm today. Otherwise, you just arrive at a poor solution, more quickly.
AI has been applied by Knapp to make robotics more effective, raising handling performance for companies with high SKU [stock-keeping unit] turnover and those considering the use of robotics. For example, there are over 60 characteristics [that must be considered when you go] to optimize palletizing operations for goods-to-person picking.
Q: How important is software to the success of automation?
A: Whether you are looking at slotting and sequencing for production or right-sized packaging, integrating real-time inventory control and advanced analytics into your automation solution should be a key factor in the evaluation of prospective partners.
