logistics Archives - Page 4 of 5

Automated Products Will Lead Future Material Handling Growth

Automation and third world development are expected to drive the 5% annual global growth predicted in the material handling industry, according to a new study released by The Freedonia Group, Inc., a Cleveland-based industry research firm (see our previous post). Durable goods will continue to lead demand, but opportunities in nondurable goods are also anticipated.

In 2007, durable good manufacturers led global demand for material handling equipment. Over the next five years, material handling growth will be led by a massive worldwide increase in motor vehicle production followed by increased demand for durable consumer goods, particularly electronics. However, rapid scientific and technological advances in nondurable goods, particularly the chemical and food and beverage industries, are also expected to create new demands for material handling products around the world.

Rapid industrialization in developing countries in Asia, the Pacific, Eastern Europe, Africa, the Mideast and Latin America will increase demand for conventional material handling products such as industrial carts, tugs, trucks, lifts, conveyors, hoists, production line movers, cranes, etc. However, the Freedonia Group expects automated material handling products, including robots and automated guided vehicles (AGV), to post the best gains as industries in the U.S., Western Europe and Japan move to increase automation. Software, systems design, project management and other high-end services to these markets are also expected to post significant increases. Economic and manpower issues will drive the march toward automation and increased productivity in western markets with an emphasis on automated equipment and systems that can be easily integrated into large-scale automated factory and warehouse environments.

High fuel prices, environmental concerns and worker health and safety issues will also play an increasing roll in shaping material handling demand, particularly in U.S. markets. The current shift away from fuel-intense gas-powered trucks to more energy-efficient battery-operated material handling movers and tugs that was sparked by high fuel prices is expected to accelerate. Escalating medical, insurance and workers’ compensation costs will likewise drive a move toward ergonomically designed material handling equipment and systems.

Ergonomic Products Will Lead Material Handling Gains in U.S.

The material handling industry is on the cusp of a major worldwide growth spurt. Increased automation at home and growing industrialization abroad, particularly in automobile production, are expected to increase worldwide sales of material handling products and systems by 5% a year for the next five years (see our Sept. 22 & 24 posts). Products that maximize worker efforts while decreasing the physical strain on workers will enjoy an ever-increasing share of the market. Particularly in the U.S. where a declining workforce coupled with escalating medical, insurance and workers’ compensation costs will drive a move toward more efficient material handling products, ergonomically-designed equipment and systems are expected to capture an increasing part of the material handling market.

DJ Products is well situated to help you meet the material handling challenges of tomorrow. We manufacture ergonomically-designed material handling carts and tugs designed to maximize work effort and safety. Our energy-efficient electric and battery-powered carts and tugs are less costly, smaller and more maneuverable than the traditional equipment used to move carts and equipment such as forklifts which kill 100 U.S. workers a year and result in 20,000 serious injuries.

All of our products are battery-powered walk-behind units that allow maximum operator control, even in tight, difficult spaces. The flexibility of our ergonomic equipment allows it to be used not only in manufacturing settings, logistics centers and warehouses, but in hospitals, hotels and motels, and in the retail industry.

We make a number of efficient vehicle pushers for the automotive industry, including some for use on production lines. Our vehicle pushers can be used to push vehicles down and assembly line or move them from station to station. Padded to prevent dents, scratches and cracks, our vehicle movers preserve the paint and integrity of vehicles during production and processing. From our handy car/vehicle pusher to our heavy-duty truck pusher which is capable of moving 10,000 pounds, we make versatile automotive material handling products useful in every aspect of the automotive industry.

For complete information, specifications and videos of our ergonomically-designed carts, tugs and movers in action, visit the DJ Products website.

Part 6: Why Businesses Fail, the Conclusion

Today we conclude our six-part series on Why Businesses Fail (see our posts starting July 14). One of the primary reasons businesses fail is:

Faulty attitudes and objectives. Businesses fail when personal or company desires are placed ahead of customers’ wants and desires. You don’t run your business; your customers run your business. Customer satisfaction is the single-most important factor in driving business and repeat business to your door. Businessmen who forget that don’t remain in business long.
Employee satisfaction goes hand-in-hand with customer satisfaction. When businesses fail to value their employees, employee satisfaction plummets, taking with it production quality and efficiency and customer satisfaction. It’s a downward spiral from which businesses don’t recover without an attitude adjustment. The bottom line is that it’s the human element that guarantees business success.

DJ Products understands the value and importance of customer and employee satisfaction — both ours and yours. That’s why we manufacture and use ergonomically designed electric carts and motorized cart pushers and equipment movers. Our equipment is smaller, more maneuverable and less costly to purchase and operate than traditional powered equipment like fork trucks, walkies and riding tugs. And our equipment is designed to eliminate the pain and strain of manually moving heavy carts and wheeled equipment. We value the health and safety of our workers — and yours.

DJ Products’ expert sales staff can assist you in assessing your material handling needs. On our website you’ll find a handy Ergonomic Load Calculator designed by experts to estimate the amount of horizontal force needed to move wheeled loads. Our sales staff can help you calculate load factors and recommend material handling products designed to protect the health and safety of your workers. Visit the DJ Products’ website for detailed specs on our complete line of products. If you have a material handling problem, DJ Products can provide the solution.

Logistics Industry Down But Not Out

Considering the state of the economy, it’s not unexpected that the logistics industry is suffering along with everyone else. According to the recently released Global Contract Logistics 2009 report published by Transport Intelligence, the global contract logistics market grew at a rate of 5% in 2008, half the 10% growth experienced in each of the past few years. Of greatest concern was the noticeable drop in volume during the fourth quarter, generally considered the industry’s peak season.

“This downturn has been felt well into 2009, although there are signs that the fall in volumes may well have bottomed out by the end of the first quarter, the report suggests,” logistics industry analyst Ken Hurst noted in today’s posting on Works Management online.

Increasing, global reach provides the greatest opportunity for future success in the logistics industry, particularly when U.S. markets go stale. Developing markets in Latin America, Central and Eastern Europe and the Asian Pacific region offer the most opportunity for future growth, according to the Ti report. While the China market has cooled recently, Hurst expects it to rebound, saying, “… with GDP growth still in the high single digits, and a $585 billion stimulus package taking effect, underlying economic activity will continue to drive its [China’s] logistics sector.”

The report predicts five more years of volatile swings in the logistics industry worldwide with significant recovery not predicted until 2011. Rebuilding is expected to be agonizingly slow. According to Hurst’s post, “Ti believes that the market will grow at a compound annual rate of 2.4% between 2009 and 2012.” Stabilization of the industry will depend on the speed with which global sales increase. Until consumer confidence returns and drives up demand for goods, manufacturers and retailers will continue to keep supply costs lean. Because of its position at the tail end of the supply chain, the logistics industry may be one of the final economic sectors to achieve recovery. While contractual relationships will protect some logistics companies from the worst market volatility, “logistics providers will have to work hard at increasing their value proposition to clients if they are to avoid the worst excesses of the recession,” John Manners-Bell, Ti CEO told Hurst.

Part II: Trends Challenge the Material Handling Industry

Today we continue our post on future trends that will challenge the material handling industry. Please see our June 6 post for Part I.

Workplace. The workplace is already changing with a growing number of workers telecommuting and working from home. The traditional brick and mortar office is giving way to mobile and virtual offices. Computers, cell phones, teleconferencing and video conferencing allow people to do business with clients, colleagues and suppliers around the world from any location, including their kitchen table. Nearly 750,000 people already live and work out of their RVs. The blurring of home and work boundaries is already starting to impact how we work and our expectations about work.
Biotechnology. Genetics, biotechnology and nanotechnology are the world’s new industrial frontier. Scientists are creating undreamed of organisms and compounds that are revolutionizing our world, and all in ever more minute packages. Every year brings profound discoveries that will force us to redefine the role of industry, how we produce and use materials, and the role of workers.
Globalization. A global economy is a growing reality. World markets are becoming increasingly interconnected. To be successful, businesses will have to look beyond local and regional resources to take advantage of market opportunities around the globe. As this occurs will the pressure of business and industrial inter-reliance have an affect on political, economic and social issues around the world. It seems certain that opportunities for global influence and change will be created. The challenge will be to see that they are positive ones.

Material Handling Industry Must Seek Growth in World Markets

Navigating the U.S. economy has been a bumpy ride of late for industry and consumers alike. There is hope for a smoother future, particularly in material handling, but the road to success may lead outside America’s borders.

World market demand for material handling equipment and systems is expected to increase 5% per year through 2012, according to a new study, World Material Handling Products, by The Freedonia Group, Inc. The Cleveland-based industry research firm expects major market gains to come from growth in fast-developing countries in the Asia/Pacific region, Eastern Europe, Africa/Mideast region and Latin America. Growth in these markets is expected to eventually outstrip sales in the U.S., Western Europe and Japan. However, in the near term, the study predicts “renewed strength” in the Japanese material handling market and “acceleration” in the U.S. market driven primarily by automated products such as robots and automatic guided vehicle systems (AGV).

The Fredonia Group report analyzed the $93.8 billion world material handling industry in 37 major national markets worldwide, predicting global industry growth to $133.5 billion, including price increases, by 2015. Rapid economic growth, increased manufacturing output, greater fixed investment activity and rising motor vehicle production in China, India, Turkey, Mexico and Russia, particularly, will lead demand and sales gains. China, a major producer and exporter to Asian markets, is predicted to account for 30% of total material handling sales growth.

The material handling products demanded by these developing markets will come primarily from U.S., Europe and Japan which are home to the largest and most advanced material handling equipment and systems producers. High-value products, technical expertise, advanced production systems, capital availability and trained labor will give western material handling firms a pronounced sales edge in developing markets. However, that edge may be short-lived. China, with its vast low-cost labor pool, has become a major producer and supplier to Asian markets. While quality and safety issues haunt Chinese-produced products, the country has shown amazing adaptability in other product markets and could become a major world material handling competitor within the next decade.

Next time: Which material handling products will see the greatest growth?

ProMat 2009 to Demonstrate Supply Chain Solutions

Well having spent 20 bitter, cold winters in Chicago shoveling endless mounds of snow, I have to admit that when I got my invitation to ProMat 2009, I was underwhelmed about the offer to “join us in January in Chicago.” However, you can’t fault Chicago for its exciting city life, excellent restaurants, magnificent skyline and ever-patrolling army of snowplows, so I’m game for another frosty experience in the Windy City. And who could miss the Material Handling Industry of America’s annual international exposition? ProMat 2009, Solutions that Make the Supply Chain Work, promises to provide an invigorating look at the hot new trends and innovations in material handling and logistics.

ProMat will showcase more than 800 solution-packed exhibits from top equipment and technology providers in the material handling and logistics industries. It’s your opportunity to not only talk to the pros but see their solutions to industry applications in action. Given the country’s current economic problems, I think we can all benefit from solutions that promise to streamline operations, increase productivity, reduce costs, improve customer service and improve our bottom line.

I’m particularly looking forward to Forrest Sawyer’s moderation of the keynote discussion on building the workforce of the future. We’ve discussed in this space before the workforce challenges that will face our industry in the coming years: retiring boomers, declining worker population, increased workforce diversity, life/work balance and a move toward more technical skill sets. These issues aren’t going to go away and we, as an industry, need to develop strategies for embracing the challenges of the future.

We’ve also talked in this space about the globalization of material handling, logistics and industry in general. With buyers and sellers from more than 90 countries in attendance, ProMat offers an opportunity to start making connections so you’ll be ready to flex your global wings.

Education is always a major focus of the annual MHIA show. This year’s Knowledge Center will bring 100 Educational Seminars to the show floor, all free to attendees, as is the keynote discussion. Seminars will focus on the latest material handling and logistics trends and innovations for manufacturing, distribution, and supply chain operations.

ProMat 2009 will be held from January 12-15, 2009 at McCormick Place South in Chicago, Illinois. Plan to go and learn about emerging trends and leading edge developments in the industry. See solutions in action and talk to their purveyors. Network with other professionals from across the country and around the globe. ProMat 2009 is your chance to learn, explore and rekindle your passion. For complete information and registration, visit the ProMat website.

Part I: Trends Challenge the Material Handling Industry

In the June issue of MHEDA Edge, Steven Little, a keynote speaker at MHEDA’s recent annual convention, recapped six important worldwide trends that are already beginning to affect the material handling industry. Some trends are still in an embryonic stage with the development of applications capable of impacting our industry years in the future. Others are already making their presence known and changing the way we do business today.

We agree with Mr. Little that the following six trends are poised to change the material handling industry. We have added our own thoughts about the challenges these trends will pose as we move toward the future. We invite your comments on how our industry can best meet these coming challenges.

Demographics. The world’s population is aging. The U.S. isn’t the only country affected by the aging of post-WWII baby boomers. A quarter of Japan’s population is older than 55. Half the population of Western Europe has passed the half-century mark. On the other end of the scale, the number of collegiates in the U.S. is slowly increasing, indicating a potentially better educated employee pool. Changing demographics influence social values, politics and business processes, forcing a rethinking and restructuring of the ideas and systems that drive society — and business.
Urbanization. Cities worldwide continue to grow larger. By 2000, 25 cities boasted populations greater than 10 million. By 2025, 62% of the world’s population is expected to live in cities. The logistics of providing for the needs of these compacted populations will require new thinking and applications.
Immigration. Within a decade, Spanish will be the primary language spoken in 20% of U.S. homes. As with the 19th century influx of English-speaking immigrants — Irish, Scottish and British — Spanish-speaking immigrants are bringing a wealth of very diverse cultural differences and customs to our shores. America will again need to meet the challenge of assimilation, a process that always engenders significant change.

To be continued Monday.

Part 1: Why Businesses Fail

Almost daily I read about the failure of one business or another in the business section of my local newspaper. The economy is down, credit is tight and fuel prices are through the roof. Naturally these conditions place an additional strain on businesses. But generally when a business fails there were already underlying fissures in its structural foundation that caused it to crack and break under the pressure.

Businesses fail for many reasons, the most likely being one or a combination of the following:

Lack of a business plan or failure to update the business plan to account for changes in the industry, economy and society. Business is not static. You should review your business plan annually and adjust it to take advantage of changing markets, new products and technologies, financial incentives, and customer preferences.
Lack of current financial data or failure to fully understand financial reports. Finance is the language of business. You don’t have to be able to write it (that’s why you have an accountant or CFO, but you do have to be able to correctly read and understand financial statements.
Lack of capital. If you’re starting a business, minimum start-up capital should be enough to cover your first six months of operation. However, once you’re up and running, don’t confuse capital with operating funds or cash flow. Growth capital should be used to grow, improve and expand your business. You should generate enough monthly income to provide a healthy cash flow and cover operating expenses. If your business is in trouble, borrowing more money isn’t the answer. If you can’t service your current debt load, you won’t be able to service an increased debt load.

To be continued

Part 2: Why Businesses Fail

The economic slowdown, tight credit and high fuel costs are placing a sometimes fatal strain on businesses. This week we’re taking a look at why businesses fail. Those who learn from the unfortunate mistakes of others are more likely to succeed.

Continuing our list from Monday of the most likely reasons businesses fail:

Inadequate sales. Inaccurate market analysis can lead to inadequate or inappropriate marketing/sales efforts. A business’ potential market share equals the total market potential for your product or service divided by the total number of competitors in your market area. When sales volume exceeds normal market share, you achieve market dominance and move beyond the break-even point into profit. Naturally, this is every businessman’s goal. While sales are the key barometer of business success, base business decisions on weekly and monthly averages, not daily volume. It’s business trends that drive future sales so concentrate on longer-term market analysis.
High expenses. Failure to properly anticipate and budget potential expenses, failure to adequately control expenses and/or failure to constantly review and update purchasing/service contracts are all common money pits. Expenses should ever exceed income. Never consider any expense as fixed; every expense is negotiable. Be prudent in your purchasing policies. Stockpiling supplies, buying additional product already in stock and failing to decrease order quantities as demand decreases are common mistakes. Limit buying to what you need, what you’re using and what will increase sales.
Poor credit policies. Credit keeps business clicking along, but over-extended credit can lead to bankruptcy, particularly in today’s economy. Maintain good credit policies in your own borrowing and be clear about credit policies to customers. Clearly communicate credit policies to customers before finalizing a sale and don’t continue to offer credit to slow-paying customers. You could be left holding the bag.