Obama’s Mandate to Transform America

“The deepening recession creates the opportunity for federal intervention and government experimentation on a scale unseen since the New Deal,” wrote Charles Krauthammer in a column for the Washington Post Writers Group that was widely published last month. Krauthammer is one of many Beltway watchers who have been predicting “a domestic transformation as grand as Franklin D. Roosevelt’s” once President-elect Obama takes the oath of office barely a week and a half from now. Krauthammer believes that Obama’s statement, “This painful crisis also provides us with an opportunity to transform our economy to improve the lives of ordinary people,” presages what will become the key thrust of the new president’s administration: the transformation of America from the ground up.

It’s hard to argue with Krauthammer’s view, particularly given the details about the President-elect’s economic stimulus plan and jobs initiative that are beginning to trickle into the press. As Krauthammer points out, the current situation is a community organizer’s dream and that’s always been Obama’s self view. He sees himself as a world changer but it’s his own world he most wants to change. He’s got Hillary Clinton and Robert Gates on board to keep the dogs of war at bay so he can focus his energies on rebuilding America.

The economic meltdown and jobs crisis have given Obama the public mandate to foment massive changes in governmental policy. People are clamoring for help and looking to Obama to provide it. A definitive win in November and the healthy Democratic majorities that rode into the House and Senate on Obama’s coattails gave him the political mandate and clout to drive new policies through Congress. The massive bailout funds already approved, with another huge chunk of money on the way, put at Obama’s disposal what Krauthammer calls “the greatest pot of money in galactic history.” Combined, current social, economic and political forces would seem to give Obama almost unlimited power to effect change.

That change is certain to increase regulation, government oversight and red tape. Bush administration regulations that critics say weakened the EPA and OSHA at the expense of environmental responsibility and worker safety are expected to be rescinded by Obama’s team in favor of measures that place the burden of responsibility and expense of accountability back on the doorsteps of manufacturers and American business owners.

Next time: Rolling with the punches; taking a proactive approach to coming change.

Outsourcing Logistics Expected to Revolutionize Warehousing

A shift toward logistics outsourcing could spell revolutionary change for the warehousing industry that could result in leaner, more efficient business models. That was the conclusion of logistics industry experts speaking at the recent Warehouse Educational Research Council’s (WERC) annual conference in Chicago.

“In the 20th century the common business model was a large integrated company that owned, managed and directly controlled its assets,” Andy Dishner, senior director of client solutions for TMSi Logistics, told conference participants. “But in this new century we have seen a major cultural shift toward outsourcing many key functions. It really comes down to evaluating whether logistics is your core competency.”

Damian Burke, a principal with logistics consultancy Conveying Solutions Inc., joined Dishner in urging the warehousing industry to streamline logistics. Currently, companies are forced to split their resources by handling their own logistics, an area in which they may not have sufficient expertise. Burke said many companies are turning to third-party logistics providers (3PL) to solve their logistics problems. By outsourcing logistics, companies can concentrate on their primary business and leave the logistics to experts, thus streamlining their own operations.

While recommending the use of 3PLs to handle company logistics, both Burke and Dishner reminded conference participants that they could not afford to ignore logistics management. “We realize that a lot of manufacturers realize that it could be professional suicide if the choice [of a 3PL] doesn’t work out,” Dishner said. “Relationships and measurements are key,” Burke added. “We are certainly not advocating reckless investment in systems you don’t trust.”

2009 Ends on Material Handling High Note

2009 seemed like the year that would never end. For manufacturers, the bad news just kept on coming. But hope seems to have finally struggled above the horizon. From the depths of last winter’s discontent, 2009 has risen to end on a high note for material handling manufacturers and, indeed, most U.S. manufacturers. Reports indicate that U.S. manufacturing has finally turned the corner, and we can expect 2010 to be a far more productive and more profitable year. Break out the champagne!

The fourth quarter of 2009 saw strong manufacturing growth. With the job market showing signs of stabilization and housing prices beginning to climb toward normal, November brought a cautious increase in consumer spending. Manufacturing benefitted from increased orders for durable goods during the fourth quarter as customers started restocking their shelves. While durable goods orders in November were less than robust, they were twice the amount forecast by economists. Overall, the U.S. economic picture looks hopefully optimistic for the first time since the recession hit.

“We are seeing progress in a number of areas, from increases in consumer spending and business spending to growth in exports,” Brian Bethune, an economist at IHS Global Economics told the Associated Press last week. “It all adds up to a recovery that is gaining some momentum.”

Bethune and other economists are predicting a 4% annual rate of economic growth (as measured by gross domestic product) for the final quarter of 2009. In addition to durable goods, particularly a growing increase in high ticket items, industrial growth into the new year is expected to come from increased equipment and software purchases. Ergonomic material handling equipment sales are expected to increase as manufacturers and business owners seek out ways to increase worker productivity and decrease healthcare costs. Expected new regulatory requirements aimed at protecting worker health and safety are also expected to drive up sales of ergonomic carts and tugs.