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Meeting major logistics challenge: How global robotics manufacturer optimized lithium battery supply chain shipping

Friday, April 28, 2017

Omron Adept Technologies, Inc., a subsidiary of Omron Corporation, faced a major logistics challenge: How to transfer the entire shipping process for the company’s line of industrial robots in-house and train staff to meet stringent hazmat transport regulations for large format lithium batteries. By partnering with Labelmaster, the company optimized its supply chain process and enhanced its dangerous goods regulatory compliance procedures.

Acquired by Omron Management Center of America, Inc., a direct subsidiary of Omron Corporation in October 2015, Omron Adept Technologies, Inc., based in San Ramon, Calif., is manufacturer and distributor of intelligent vision-guided robotics systems and services globally and the largest U.S.-based manufacturer of industrial robots.

Omron Adept’s line of autonomous industrial robots, which provide automated warehouse solutions for manufacturers, feature large format lithium ion batteries – a power source that currently faces ultra-strict regulations for transport with non-compliance resulting in fines or penalties. Adept’s Lynx model, a self-navigating Autonomous Indoor Vehicle (AIV) designed for dynamically moving material in challenging environments, is the company’s main product featuring the large format lithium battery.
Battery compliance and shipping had been outsourced to a 3PL – with a majority of shipments originating from Omron Adept’s California manufacturing facility.

“Using a 3PL had increased our lead time and costs for managing the battery program with shipments sometimes delayed due to stringent packaging requirements,” said Wes Watson, director of logistics for Omron Management Center of America, which oversees Omron operations in the U.S., Canada, Mexico and Brazil.

Watson conducted a thorough review of shipping procedures and 3PL costs. After careful consideration, Watson recommended moving the entire shipping process for Omron Adept in-house to maximize supply chain efficiencies.

“Shipping large format lithium batteries requires a high level of detail to meet current and changing regulations,” said Watson. “We wanted more control to monitor the compliance of the program and stay up-to-date with regulations. We also felt it would be more cost effective to ship product ourselves.”

Watson conducted research and received a recommendation from a freight forwarder to contact Labelmaster Services for consulting support. Chicago-based Labelmaster specializes in helping companies – large and small – comply with the complex and ever-changing regulations governing dangerous goods/hazardous materials.
“Labelmaster was an ideal choice because of its software package and ongoing support services offerings,” said Watson.

According to Watson, other vendors only offered online certification classes and no personal training.

“We wanted person-to-person support because of the recent acquisition and because we had many new employees in the facility,” Watson added. Mike Pagel, senior consultant with Labelmaster, managed the project. “Omron contacted us to develop an in-house shipping program to transport globally the company’s robots and lithium batteries, which are considered fully regulated from a hazmat perspective,” said Pagel. “Omron Adept’s clients have immediate needs, and many are international firms.

Compliance assessment audit
A major goal for Watson was to complete the in-house move quickly.
As a first step, Labelmaster recommended an entire shipping process audit. Pagel met Watson in November to review the existing 3PL relationship, evaluate current compliance levels and develop recommendations for the in-house transfer.

A week later, Pagel sent a complete audit report summarizing key findings that included areas of strength and where enhancements were needed. Process improvements were categorized as critical issues to address and others as lesser priority.
The report also included recommendations to bring Adept into optimal compliance when transferring the shipping process in-house and the steps and initiatives needed to maintain ongoing compliance.

Along with the audit, Labelmaster provided a process guide with detailed procedures for every type of battery Omron Adept ships for all modes of transportation including ground, air or sea. The guide included instructions on how to properly package and label the cargo and how to complete required documentation.

“We received a very informative and detailed list of procedures with illustrations on how to ship the various batteries,” said Watson.

Training staff for hazmat shipping
Following the audit, Labelmaster conducted training sessions in early December for Omron Adept staff. The sessions ensured that shippers in the facility were certified to transport dangerous goods. Twelve employees were certified after a full day’s training class.

Concurrently, Omron purchased Labelmaster’s Dangerous Goods Information System (DGIS), a software solution for managing dangerous goods shipping. A Labelmaster software consultant visited the plant to conduct individual training sessions for platform users.

“A growing number of electronics and technology companies use DGIS to ship lithium batteries,” said Pagel. “In the past, batteries were shipped under certain exceptions that meant no shipping papers were required. With recent changes, both to the regulations and to carrier-specific requirements, more battery shipments are moving from ‘excepted’ shipments to ‘fully regulated’ shipments, and our software is an ideal solution to meet those requirements.”

Labelmaster’s DGIS software technology includes automated functions, templates and error alert features that double and triple check inputs to ensure shipping papers are completed accurately.

“Today’s ever-changing and stringent regulations governing lithium batteries shipping by air require the right labels, packaging, marks and a complete DG Shipper’s Declaration or DGD form for dangerous goods,” said Pagel. “The DGD is a regulated document that is very tightly controlled and must be completed correctly or a package can get stopped in transport and result in a violation from the FAA.”

With training complete, Labelmaster observed the team handling and processing shipments to make sure all procedures were performed correctly.
The in-house shipping program was fully operational in December.

“From the time I contacted Labelmaster to the time we were up and running was just over a month,” said Watson. “That was a big win for us because implementation of such programs can take much longer.”

Shipshape shipping
Omron Adept has experienced a number of benefits since the transfer to a total in-house operation.

First, Watson and team appreciate the ease of use of the DGIS software.
“DGIS is very intuitive with prompts for everything needed, and the warehouse staff has an easy time working with it,” said Watson. “In fact, it’s probably one of the more user-friendly software systems I’ve ever installed in the warehouse.”

Watson also values the many regulatory updates Labelmaster provides.
“Labelmaster keeps us notified regularly about new and changing regulations that apply to our business,” said Watson. “It was a huge selling point in why we chose them.”
Another benefit for Omron: improved relationships with the major carriers.

“The carriers accepted the training certificates with no questions asked and appreciate that we partnered with a compliance consultant,” said Watson.
But most important, Omron Adept is shipping product to customers efficiently and compliantly.

“We have not had any compliance issues yet, and I don’t think we will,” said Watson. “With our current system in place, I think we will be in great shape for a very long time – which helps make our customers happy.”

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