In this VIDEO, Rob O’Byrne talks to Mike Kotecki, Sr. Vice President Dematic about global differences in approach to Australian materials handling.
“You know, one of the things that people very often ask me around Australia is: How do Australian companies compare over overseas companies, particularly US companies, European companies in terms of technology in the Supply Chain?
Hi this is Rob O’Byrne form Logistics Bureau and I thought we would ask an expert opinion. Here we’ve got Mark Kotecki of Dematic in the USA. Great to have you with us Mark.”
Mark:
Good to be here sir.
Rob:
And I was just asking Mark over lunch, he’s visiting Australia for a week or so and he’s seeing lots of companies here. He’s been talking to the conference and explaining some of the things that he has seen and what he sees as an outsider to the Australian Market as being quite different here in Australia in terms of technology and how companies operate.
Mark:
I really don’t think that the technology is different as much, I think the folks here are applying some more technologies, software intensive and automation intensive. My observation is that, Australia maybe it’s because of the size of the continent and the size of the population things are a little more fragmented. I think there are more fragmented applications where in the United States we might put on a Distribution centres that the objective is to lights out door to door, very very few employees, everything is integrated. We’re talking about highly integrated and automated systems and there’s clearly a place in Australia too, some instances where you have the full boat. But the sites – I have chance to tours and some fantastic systems, more scalable and modular solutions where there maybe islands of technology that get turned on and turned off inside the Distribution centres; very pragmatic, very practical , focus on high RIOI don’t focus on completion of the automation but rather on point solutions that makes tremendous sense. That is a very spikey, as a lot of industry, a lot of continents; spikey utilisation in those cases maybe a piece of equipment or a piece technology that is turned down. But the fundamental are the same, the ESR has automatic guided vehicles, conveyer, I believe that e-commerce is being a little bit stronger in the United States at this point. Little more focus on the challenges of distribution being able to handle that, from what I hear drifting strongly on that direction here in Australia.
Rob:
Here in Australia, we think we have a high living cost and very high land cost. And that you would think would drive higher degrees of technologies, how do you see that comparison compare to the USA?
Mark:
Absolutely, I think it’s more consistent here. You’re right, the labour cost drives a lot but when you’re talking to someone about ROI and the technology investment and distribution – labour is number 1, and it’s that highest tangible. In the United States, it varies widely by geography. Where in Manhattan or in Chicago or in Detroit technology pays for itself because it’s a high labour cost or high unionisation, where in other areas in the United States lots of land, labours inexpensive – little different, little difficult ROI.
Rob:
One of this you mentioned over lunch was the Focus on Safety and I’m quite surprise with your comment, you just want to comment on that again.
Mark:
Yeah! It’s tremendously impressive. I think United States has a lot to learn from Australia in the areas of safety and caring about it. I saw the presentation yesterday where they listed their core values and number 1 was employees, human concern followed by customer so on and so forth. And that’s clearly illustrated in propensity for safety, I have visited 3 systems yesterday, 3 automated material handling systems, 3 different customers – big name customers. And everyone I took a 20 minutes exaggerating 5 – 10 minutes presentation and a test before – literally a test before you can walk in steel toed shoes. I’m in a distribution centres that handles cotton balls and they’re wearing a steel toed shoes and also maybe a bit over the top but always wearing a yellow vest, walking between the lines. We profess safety and I think we do a practical job over that in the States but be at a Government regulation or be at Company regulation it’s a much more impressive here and I think that’s a something that US has to learn.
Rob:
Maybe if I could sort pose a question to you and I’ll let you think about it a little if it’s necessary. If you’re giving one piece of advice to people who are looking to a, or maybe invest in greater level of technology or organisation in there warehousing operation. What would you say to them? What would be the key thing to consider to look at?
Mark:
You threw me a soft ball, I’ve got a presentation on that this morning and there are a number of things: 1. I believe in my strongest belief, really take the time to look at the mirror. As much as our job here at Dematic is to impose automated handling technology solutions, taking the time to step back before you make that plunge and ask yourself some tough questions – how your company defines money? What your customer’s expectations are? You use your experience, all those things are important. In my mind, if I have to be pressed to one it would be – does the company culture have the guts and the inclination to make changes. Companies that are successful – moving a lot quite well, developing their product, developing their market place, continue to do well but it takes guts to say ‘I’m going to invest not in the machines that make my product, I’m going to invest to Supply Chain and I’m going to call that Strategic and that’s a big step. Look at the mirror and ask yourself, ‘Do we really have the guts and the culture to say a moving capital, a moving energy from the manufacturing and production process or maybe the marketing process, I’m going to move that into the Supply Chain – it’s a big step and has paid off to many many companies and you really need to take a look at the mirror and ask that
Rob:
So we better not take much of your time so Mike Kotecki – Senior Vice President of Dematic from the USA. Really appreciate your comments today.
Mark:
Thank you! Thanks for your time.
For more information about Dematic see: Dematic: We Optimise your Supply Chain
