Skip to content

Material Handling Equipment: The Bedrock of Supply Chain

Material Handling Equipment: The Bedrock of Supply Chain

Mr-Steven-Hill

Interview with Steven Hill, Managing Director, Southeast Asia, Crown Equipment

With so much emphasis on dazzling supply chain innovations, such as high-end artificial intelligence, delivery drones and self-driving trucks, it is important not to ignore the transformation of the more basic, but extremely critical, material handling equipment (MHE) aspect of the whole supply chain operations. Investing in high-quality MHE, such as lift trucks and fleet management systems, will go a long way to success.

“This is evident when you see that 88 per cent of the Fortune 500 companies, 92 per cent of the top 50 e-commerce companies in the US, 70 per cent of the top 10 green companies in the world, and 60 per cent of the top 50 innovative companies count among Crown’s customers,” said Mr Steven Hill, Managing Director, Southeast Asia, Crown Equipment.

Having worked in the industry for over 30 years in Europe, Australia and Asia, Mr Hill has an extensive knowledge of what is important within the supply chain and warehousing industry today and in the future, knowing it has been developed through delivering business productivity improvements to both global and local SME companies.

In this issue of Supply Chain Asia magazine, Mr Hill shares his thoughts on the company’s operations, the potential growth of Asia Pacific region, and what excites him about being part of the industry.

Having worked in the MHE industry for over 30 years in Europe, Australia and Asia, how different is the industry in the different regions?

There are numerous differences between Europe, Australia and Asia, which businesses working across these regions need to manage to survive and succeed. Important variances include language and cultural differences, regulatory differences and wide-ranging economic climates.

In certain Southeast Asian countries, land for warehousing is becoming increasingly limited. In these areas, the trend for warehouses is to go ‘up, not out’, with both multi-storey facilities and taller, narrower aisles. This is a contrast compared to Australia, where there is more space and warehouses are generally single-storey.

Differences across regions are further compounded by operational budgets and respective local industry’s ability to support the latest technology offerings. In Australia, the quality of fleet management systems, such as InfoLink, have become an increasingly important factor in medium and large-sized entities selecting their MHE partner, due to its ability to reduce administration work and the emphasis on safety and reducing workplace incidents in that region. This technology has a strong following with the larger global companies in Southeast Asia but its use among small to medium-sized entities is not as strong.

Reports suggest that the MHE industry was estimated to be worth $115bn in 2015 and will reach a total market size of US$148bn by 2021 at a compound annual growth rate of 4.31 per cent. Is this an accurate forecast? Why or why not? Which region is set to spend the most?

There is sound evidence to suggest the forecast market size of $148bn by 2021 is credible and the industry is set for continued growth.

Economic reports vary by country and industry but all indicators suggest that growth within the material handling industry, especially within Southeast Asia, will continue for the foreseeable future. In particular, we are witnessing an increasing number of manufacturing businesses establishing new facilities in Thailand, the Philippines and Vietnam. Increased employment opportunities within the region are boosting the average disposable income which is, in turn, helping to drive demand for local access to well-known international household brands.

This leverages the need for the opening of new warehouse facilities to house and deliver these in-demand goods in these countries, as well as the stock from the emerging manufacturing ventures.

Can you share with us Crown’s operations in Asia Pacific?

Crown Equipment’s Asia Pacific operation began in 1966 with the establishment of the Australian headquarters in Smithfield, Sydney.

With the experience gained in Australia, Crown set up operations in Southeast Asia in 1978 with the Southeast Asia regional headquarters now located in Singapore. This proved to be a solid launching pad for the rest of the region and Singapore now hosts the recently-built Southeast Asia Parts Distribution Centre located in Tuas, in the country’s west.

The Asia Pacific region is serviced through an extensive retail branch network structure, which includes locations across Australia, New Zealand, Singapore, Thailand, South Korea, the Philippines, Indonesia, Malaysia, Vietnam, Taiwan and China. Crown recently launched in a number of new locations with branches in the growth hubs of Johor, Malaysia; Rayong, Thailand; and Clark in the Philippines. Additional new locations are being established in South Korea and Vietnam.

Out of the different material handling equipment, Automated Guided Vehicles (AGV) and Automated Storage/Retrieval Systems will witness maximum growth due to increasing demand arising from different industry verticals.

Product introductions such as InfoLink fleet management solutions, our service technician communication tool, our turret stock-picker range and our Battery Health Monitor Technology are examples of Crown innovations that are available to businesses at a manageable cost, while providing fully-tested and proven real-world performance, efficiency and safety advantages.

Crown is taking the same approach with its rollout of automated solutions, utilising technology to help customers address specific needs. For example, Crown recently unveiled in the UK its Auto Fence and Auto Positioning System solutions that leverage radio frequency identification (RFID) technology to help enhance safety and productivity. Auto Fence controls or limits forklift operation near a hazard or where greater caution is required. The Auto Positioning System automates travel and lift functions for the most efficient path between the forklift and its destinations.

Do you feel there is enough interest in the Asia Pacific region for the adoption of automation in warehouses and manufacturing plants? Is technology adoption growing at an acceptable pace?

There is definitely interest and, I would say, a lot of curiosity in the Asia Pacific region around automation, which would suggest a level of support for technology adoption. Customers are recognising that automation comes in many forms, adopting a range of solutions from semiautomation to optimise specific tasks to fixed automation through to AGVs.

Often, it is a mix of manual and automated solutions that best fits a customer’s unique situation. Many customers are adopting semi-automated solutions that enable them to operate more traditionally when appropriate while they are free to employ automation when it is most effective. Crown’s QuickPick Remote order picking tool is often utilised in this manner.

This semi-automated approach to automating the warehouse is becoming widely accepted because it offers flexibility and increased productivity at the same time and is a natural step in the technology evolution that is underway in the warehouse and in the manufacturing sector. Technologies that we are focused on have an important application in existing warehouses as well as warehouses of the future.

Traditionally, warehouses only offer labour-intensive positions. Moving forward, is it possible for heavy labour to be completely eliminated from warehouses? What does the future warehouse employee look like?

In warehouses around the world, a number of roles and functions are in the process of transitioning away from labour-intensive arrangements to more automated, streamlined processes. Improvements in both technology and safety standards have been triggers. However, the need for people in the material handling industry remains strong.

In the past 10 years, the greatest example of warehouse operational change has been driven by consumer demand, which is linked to the growth in e-commerce.

Business models are constantly striving to reduce on-hand inventory, to reduce the burden of stock holding, to drive increased stock turns and to supply goods ‘just in time’. Online trading acceptance and consumer support have driven demand for smaller average picks and higher carton distribution frequency.

In turn, this has adjusted the warehouse picking process for business models that operate within this channel, which is then supported by the appropriate MHE and labour solution.

The future warehouse will still have a need for people within its operating environment to optimise task completion speeds. We believe that technology is the future but it requires people management, accurate measurement and quality control to provide its true impact.

In your opinion, what makes Crown stand out from its competitors?

Crown stands out from its competitors in a number of ways. One of the most important reasons is that the company is bolstered by large numbers of factory-trained staff. We are not a distributor and we make the equipment, including up to 85 per cent of its componentry.

When you work with Crown you are working with people in possession of great product knowledge and a thorough understanding of warehouse supply chain requirements. Knowledge is a major factor separating Crown from the competition in the Asia Pacific region.

Our customer-centric culture is another important factor. We care about our customers and their business becomes our business. We are structured in a way that provides them with the solutions they require. Our customer focus can be seen in our drive to vertically integrate in manufacturing, for quality control and parts availability. It also manifests itself in our ability to offer total MHE solutions – making it easier on the customer – as well as our reach truck and high warehouse storage specialisation.

A strong influence on the development of our core values is Crown’s ownership structure. As a family-owned business that’s grown over the decades, we have got a strong understanding of what is important to businesses large and small. An obvious positive result of our approach can be seen in our global leadership of the electric lift truck market and the following figures can’t be ignored. This is evident when you see that 88 per cent of the Fortune 500 companies, 92 per cent of the top 50 e-commerce companies in the US, 70 per cent of the top 10 green companies in the world, and 60 per cent of the top 50 innovative companies count among Crown’s customers.

What excites you most about being involved in the MHE industry?

Whenever a business or person needs to pick-up and move something larger than one person can carry, a material handling solution is required.

I really enjoy being able to work across a vast industry sector which includes manufacturing, transport, warehousing, FMCG, retail, pharma, shipping, industrial, construction, agriculture and services, to name a few. There is never a day when I do not learn something new from the material handling industry or from within my own company.

What excites me the most are the constant opportunities to improve our business and make significant enhancements to the growth of Crown in the Southeast Asian region, which makes my job really worthwhile.