When assessing the global oil situation, one thing is pretty clear: No one will be spared – no individual, country or industry.
In particular, rising fuel costs are impacting the material and product distribution supply chain, which depends heavily upon transportation to function. No doubt, this will determine future development of distribution centers in the United States. “No one is quite sure how it’s going to play out just yet,” comments Jim McCarthy, president and chief operating officer of Intelligrated Inc., a leading supplier of integrated material handling systems, services and products. “Will it make more sense to build a large number of distribution centers close to the manufacturer or point of material goods shipment, as opposed to building bigger and more centrally located centers?”
Adds Chris Cole, Intelligrated’s chief executive officer: “The situation will not only determine how and where distribution centers will be built; it will also drive the need to reduce distribution costs – and that bodes well for automation.”
It also bodes well for the Mason, Ohio-headquartered Intelligrated Inc., which is taking distribution into the uncertain future. Warehouse automation is its specialty, and the company offers logistic solutions throughout supply chains in the warehousing and distribution sector, providing high-speed case sortation, accumulation, merging and controls technology.
“We build the most cost-effective, state-of-the-art logistic systems,” says Cole who co-founded Intelligrated with McCarthy in 2001. “Further, we stand behind our customers with aftermarket tools that increase their productivity.”
These customers are major retailers, both direct-to-consumer – mail order and Internet-based businesses – and major chain stores, according to Cole. Clients include Amazon, Big Lots, Lowe’s, Dick’s Sporting Goods, Adidas, McGraw-Hill, McKesson, Bed, Bath and Beyond and Staples, among others.
EQUIPPING THE WAREHOUSE
As Cole points out, Intelligrated doesn’t construct distribution centers. Rather, it produces everything that goes inside the warehouses – all of the computer software and material handling equipment.
Intelligrated’s product line includes substantial innovations. Highlights include InControlWare®, an advanced conveyor control system for high-performance distribution centers. The integrated design blends machine control, operator interface, system diagnostics, and maintenance tools, and its host interfaces in a single, easy-to-use system.
Another highlight is the IntelliSort® Shoe Sorter that provides flexible sortation for a wide variety of products. Incorporating sliding shoe technology offered with a tube or flat slat design, IntelliSort® is a heavy-duty construction, high-speed sorter that operates at 200 to 700fpm. To complement this technology, Intelligrated recently introduced its IntelliSort® I-Watch™ sorter maintenance program, an automated, full-service solution designed to increase the life of customers’ shoe sorters. I-Watch™ automates the industry’s best practices and diagnostic tool available for sorter maintenance, monitoring all sorter aspects to keep the shoe-sorting system up and running longer.
Addressing the trend toward “green,” Intelligrated developed a motorized drive roller conveyor, the 710 MDR, that uses rollers with integral motors and enables conveyor configuration for several applications. A low-voltage, ergonomic product, it incorporates advanced photo eye technology to significantly lower energy consumption and electricity expenses. “It’s an energy efficient product that only runs when a product is on it. Otherwise, it shuts, down,” explains McCarthy. “We’ve done a large amount of business with the MDR.”
Along with the fuel-shortage and energy related considerations, Intelligrated products help customers deal with another significant industry trend: labor shortage. “At the macro level, companies are having trouble finding warehouse labor,” says Cole, “but they can get a tremendous payback, as far as accuracy and cost reduction, by implementing automated sortation equipment, particularly with our products, which convey a much broader percentage of goods compared to older conveyor systems that were limited in what they could handle.”
RAPID ORGANIZATIONAL GROWTH
When Cole and McCarthy founded Intelligrated on Sept. 4, 2001, a week before the 9/11 attacks on the World Trade Center, they started with 17 employees and operated from a rented building in Blue Ash, Ohio. The initial workforce included individuals who had previously worked together and, as such, could operate as a high functioning team. Also, Cole and McCarthy previously served as executives at the same company (Buschman Corporation in Ohio). “We had extensive industry experience and decided there was room for an American-owned company that knew how to take care of its customers,” relates Cole. “We saw a lot of things that other companies were doing wrong, as far as servicing the market.”
During the first year, they put all of the elements in place. “We designed the product lines, both the hardware and software, and set up a factory to make the product,” recalls Cole. By November 2002, Intelligrated was selling and shipping to customers. “Since then, we’ve grown by leaps and bounds,” says Cole.
The company, which has experienced 40-percent annual growth in recent years, now includes 500-plus employees (more than 200 are involved in production). A significant industry player, Intelligrated achieved sales of more than $100 million in 2006. “Last year, we ended with a run rate of $200 million,” reveals Cole.
Cole and McCarthy are looking to add at least 200 more employees in the next three to five years, and they’ve set a goal to achieve revenues in the $400 to $500 million range by the early part of the next decade.
Already, the company has attained a high market position. “We rank at number-two or a very close third in the industry, but in our relative market, we may be number one,” says Cole. “However, there’s no question that we’re the technology leader. Our customers look to us to provide the most advanced solutions. We’ve responded by providing them the greatest throughput for the least cost of operation over the long haul. Further, our systems will remain relevant down the road, still offering the best return on investment.”
Intelligrated designs and builds product at two main facilities: its corporate headquarters in Mason and its production site in London, Ohio. Company headquarters includes a research and development/product demonstration facility. “That’s our main engineering location, and it serves as the base of our system sales and research and development efforts,” says Cole. “It includes a large demo loop where customers can witness a wide range of their products on Intelligrated conveyors before they commit to purchase.”
The site also handles special prototyping, he adds.
The London manufacturing facility contains 202,000 square feet of flow-through assembly production area. “We’ve modernized the plant with state-of-the-art lasers, metal forming equipment and dedicated assembly lines,” informs Cole “As one of the few market players that builds its product on assembly lines, we have flow through manufacturing, where we receive on one side of the building and ship from the other side. With 66 shipping lanes, we can simultaneously work on 66 different truckloads without having to double-handle anything.”
Along with its pioneering products, the company separates itself from the competition by providing the highest levels of customer support. “Right now, our main competition is in Europe, primarily Germany and Great Britain,” reports Cole. “We not only differentiate ourselves with a skilled workforce capable of designing the most competitive solutions, but through overall customer service as well.”
Today, company operations are divided into four business divisions – system sales, regional operations, customer service, and design and build operations – that deliver customer satisfaction based on accuracy, quality, productivity, safety, implementation costs, ROI and increased shareholder value. Along with its manufacturing facilities, the company includes five additional offices in Georgia, Illinois, New Jersey, Ohio, and Texas that provide national coverage for sales, engineering and customer support.
“Support is a 24/7, 365-days-a-year commitment,” says Cole. “Our goal for any service call is to get an engineer on the phone and solve the problem within two minutes. None of our competitors come anywhere close to that.”
“When you boil down what we’ve achieved, our main success driver has been our customer focus,” adds McCarthy.
As it moves forward, Intelligrated plans to keep developing innovative products to meet new customer needs. In addition, it will look to potential acquisitions to further foster its already abundant growth. Moreover, it will never lose sight of its commitment to customer support. After all, that is what has made the company what it is today. As Cole and McCarthy point out, most of its customers came to Intelligrated because they were dissatisfied by what traditional providers offered. Intelligrated represents the better option – as well as hope for a future that will be fraught with new and increasingly complex logistical challenges.