Change is happening in the materials handling sector

“Change Is Happening” – sign at Dematic’s MHLC

Five years is a lifetime in our industry, but at Modex 2014, I moderated a panel discussion with three retail executives talking about what they’re looking for from materials handling providers. One of them said to me that he looked at conveyors, sorters and other automated technologies as commodities. “Hardware providers need to become software providers,” he said.

When I walked the floor, I realized it was already beginning to happen. “In real estate, it’s all about location, location, location. At Modex this year, it’s software, software, software,” I wrote at the time.

That transition from hardware to software was top of mind during the opening remarks by Bernard Biolchini, Dematic’s new EVP and CEO for the Americas, and a conversation I had with Biolchini afterward. He summed up the changes coming to the industry succinctly: “In one word, software,” he said. “The one way for us to achieve the requirements of our customers is to become more software centric. It is the core and center of where our industry should be.”

It is a transition that comes naturally to him: Prior to joining Dematic 5 years ago in Europe, he worked in IT and process automation at companies such as HP, AMD and Schneider Electric. He drew a parallel to what has already happened in a computer industry that evolved from a time when people had to connect to a mainframe to access the information they needed to mini-computers, client server networks to the Internet and now the cloud. “The question is what is our ‘cloud’ for distribution?” Biolchini asked. “It may not happen tomorrow, but 20 years from now, it’s going to happen.” What that might look like, he said later, is a shared infrastructure accessed via the cloud where fulfillment and packaging might be for Company A on this order followed by Company B for the next.

He also outlined the building blocks for Dematic moving forward: Smart and connected solutions designed to deliver on the need for more speed, lower costs and more security, and partnerships. “We have to recognize that other companies in our space are coming up with new solutions that can benefit our customers,” he said.

I asked Biolchini as the new leader on the block, what was his vision for the company. “I want to make sure that Dematic is seen as a trusted adviser to our customers, and that we are designing that customized solution that delivers a value that they my not recognize that they need,” he said.

He added: “That will never happen if we don’t make that shift towards software.”

Like the sign said: Change is happening.