Tag: Material Handling

Part 3: Why Businesses Fail

The business section of the newspaper seems to carry daily notices of failing businesses. Despite tighter requirements, bankruptcies are up. Businesses are succumbing to a combination of the economic slowdown, tighter credit and high fuel costs. Today we continue our series on why businesses fail (see our July 14 and 16 posts).

Most business fail for a combination of reasons, including:

  • Poor collection practices. It’s not enough to make the sale; you have to collect the money. While this should be obvious, many businesses fail to initiate or maintain good collection practices. Just like sales, collections should be a daily task. The biggest mistake many businessmen make is to allow late accounts to go too long before starting the collection process. Many customers will take advantage of the traditional 30-, 60-,  90-day payment schedule. Try aging your accounts receivable by the 15th and month end or even weekly. The sooner you start collections, the better the chance of collecting and the faster your money turns over.
  • Lack of experience in basic business know-how. On-the-job experience is an effective teacher, but the lessons can be costly. Develop an ability to learn from the experiences of others. Education, keeping up with industry journals and publications and attending professional conferences and seminars can offset a lack of personal experience. Meeting with other businessmen through professional organizations or social/community service groups provides a valuable opportunity to discuss common business problems and issues.
  • Poor location. For retail businesses that depend upon walk-in or drive-by trade, poor location can be disastrous. Manufacturing and industrial concerns require easy access to freeways and other transportation routes for both delivery of raw materials and shipment of finished product. Convenience and visibility are key. 

    To be continued

Does Obama Have Muscle to Win Ergonomics Fight?

Like actor Mickey Rourke’s amazing return to the Hollywood ring in The Wrestler, labor is back; and President Obama is in its corner cheering its revival. After eight years struggling on the ropes during the Bush administration, labor has bounced back into the Washington ring and is gaining strength — and it’s bringing the ergonomics fight with it.

“I do not view the labor movement as part of the problem; to me it’s part of the solution,” President Obama was widely quoted as saying recently. During his campaign, Obama repeatedly promised American workers a safer, healthier work environment. Industry watchers have taken that to mean a return to and an expansion of the ergonomic standards initiated during the Clinton administration but quickly rescinded under Bush. With a Democratic-controlled Congress backing him up, Obama appears to have the muscle to force ergonomics back into the legislative ring.

By naming California Democratic Representative Hilda Solis as his new Labor Secretary, Obama appears to be saying to U.S. industry and the U.S. Chamber of Commerce, a long-time vocal foe of ergonomics legislation, “Bring it on!” Although she’s still running the confirmation gauntlet, Solis has received the recommendation of the Senate Health, Education, Labor and Pensions Committee and is expected to be confirmed, possibly as soon as tomorrow.

The daughter of immigrants and union workers, Solis has long ties to labor groups and has been a champion of ergonomics in the workplace since joining the House of Representatives in 2001. Her home state of California is the only state in the U.S. that mandates ergonomic standards that force employers to provide a safe and healthy work environment for their workers. Concerned about the cost of implementing ergonomic standards, those opposed to ergonomic legislation fear that California’s tough ergonomics rules will be used to create a national model.

That Obama would eventually grapple with ergonomics to improve labor conditions has been a given since his campaign days. But there’s been a lot of speculation in the industry and in Washington about how and when Obama would try to take down ergonomic opponents. By calling Solis into his corner, Obama seems to be getting ready to enter the ring. It will be interesting to listen to the President’s State of the Union speech tomorrow night. A direct statement about ergonomics or workplace safety could indicate that the fight is on!

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.

2010 Material Handling Shows Help Position You for Future

The poor economy led to lower attendance at 2009 material handling shows but 2010 promises to be a better year. Companies trying to hold onto their bottom line may have skipped last year’s show or sent only a token delegate or two. With the manufacturing and peripheral industries finally starting to post small increases, material handling and related industries are anticipating better attendance at 2010 conferences.

Annual conferences and trade shows offer unique opportunities to see what’s new in the industry and what the future holds. Staying up-to-date with your industry enables you to better position yourself to meet future demands. National trade shows are an excellent place to network. They’re a good place to search for new talent to strengthen or rejuvenate your operation. They’re also an excellent place to form alliances with other company representatives that can lead to greater national exposure and increased product sales.

Continuing education classes and workshops provide information on innovative solutions to management and marketing problems. Round table discussions provide an opportunity to trade techniques and strategies with other industry professionals. Dealer and product give you an opportunity to learn about new products, increase your product knowledge, and discover products or services that can augment or revitalize your current product line.

The big national material handling conference/trade shows scheduled for 2010 include:

  • NA 2010: Solutions that Make the Supply Chain Work sponsored by the Material Handling Industry of America (MHIA) will be held April 26-29 at the I-X Center in Cleveland, Ohio. The event will focus on positioning your business to take advantage of future trends. Click here for more information.
  • 2010: The Rules Have Changed sponsored by the Material Handling Equipment Distributors Association (MHEDA) will be held May 1-5 at the Marriott Marco Island Resort & Spa on Marco Island, Florida. The conference will focus on providing insight into recession-driven maketing and economic trends. Click here for more information.

Part 5: Why Businesses Fail

At DJ Products we believe in the value of learning from experience — ours, our customers and the business community at large. It’s not necessary to reinvent the wheel. The savvy businessman will learn from the experiences of others and turn that knowledge to his advantage.

With that in mind, we’ve been talking about why businesses fail (see our posts starting July 14). The economy is down, credit is tight and fuel is up. Times are tough and many businesses are struggling to survive. Taking a look at the most common reasons businesses fail may help us all to avoid the same pitfalls.

Continuing our list of why businesses fail:

  • Unwarranted personal expenses. The news is fully of greedy or sloppy businessmen (and politicians) who now find themselves fired or even jailed for using their business as a personal expense account. Hard-working businessmen deserve to profit from their labors, but they also have a responsibility to set an example of fiscal responsibility for their employees and create a profit for their shareholders. You need to be profitable to earn the perks. Set clear policies for charging expenses to the company that follow IRS guidelines and regulations. Set an example for employees and monitor expenses regularly to curb abuse.
  • Unplanned expansion. Entrepreneurs eager to capitalize on every opportunity may be tempted to expand quickly. However, unplanned expansion is the quickest way to run out of cash fast. Expanding a business should involve careful, long-term planning. Take sufficient time for market analysis to ensure that expansion is warranted and can continue to be supported by future sales. Develop an implementation schedule and don’t cut corners on the implementation process. Proper implementation is pivotal to the success of an expansion plan. A good plan, poorly implemented, will turn out to be a poor plan.

 To be continued

Overseas Jobs Could Be Headed Back to America

The tide could be turning. Following up on a campaign promise to stop the flow of manufacturing jobs overseas, President Obama has proposed closing loop holes in the U.S. tax code and raising corporate taxes on offshore earnings to encourage U.S. manufacturers to keep jobs in America. The President is pressuring Congress to eliminate certain tax breaks that he says encourage U.S. companies to move jobs overseas. At the same time, the President’s recently-released budget initiative proposes to increase corporate taxes on overseas earnings.

Proponents say the President’s plan would not only keep more jobs in America, it would raise more than $100 billion in much needed revenue over the next decade. Current tax laws allow U.S. firms to defer taxes on overseas profits if they invest those profits in their foreign subsidiaries. Critics say that practice encourages businesses to fund their foreign operations at the expense of those located on U.S. soil. And, of course, there’s considerable debate on both sides about what the amount of the tax rate should be if the rules are changed. Many consider the current 35% rate (which few actually pay) unsustainable, particularly in the current economy. Some industry experts have suggested a more realistic 15% to 20% tax rate. The debate is expected to be energetic. If your company has a global reach, you might want to weigh in with your Congressional representatives.

Any move to keep U.S. jobs on U.S. soil will be a positive one for America’s manufacturing industry, American workers, and the U.S. economy. Hard-hit by the economic recession and the problems of Detroit’s Big Three auto manufacturers, the future of U.S. manufacturing has been painted as bleak by many. But the real story is much more complex and, fortunately, rosier. While U.S. manufacturing jobs have moved overseas, particularly to China, to take advantage of lower labor costs; over the past 15 years, the number of Chinese manufacturing jobs has not increased, leading industry experts to believe we’re on the downslope of the outsourcing peak, at least with regards to China. In fact, according to the Material Handling Industry of America, the percentage of workers employed in manufacturing is higher in the U.S. than it is in China. Good news for U.S. workers.

More on Friday

How Force Affects Pushing and Pulling Activities

Pushing and pulling tasks are among the most common industrial activities. Pallets of goods need to be moved from one point to another and equipment needs to be moved to a usage point. Workers at factories, hospitals, distribution centers, grocery stores and many other businesses engage in pushing and pulling activities numerous times a day. The Ergonomics of Manual Material Handling – Pushing and Pulling Tasks provides a useful overview of the costs and consequences of neglecting ergonomics in common industrial tasks that involve pushing and pulling. Click here to read the white paper published by Darcor, an industry leader in the design and manufacture of ergonomic casters and wheels, and Ergoweb, an ergonomic web resource.

While often taken for granted, wheeled carts and equipment are integral to the operation of nearly all manufacturing and distribution facilities as well as many businesses. Musculoskeletal disorders from pushing and pulling injuries cost American businesses billions of dollars each day in medical, insurance, disability and downtime costs. Ergonomically-designed carts, wheels and casters can significantly decrease the incidence of musculoskeletal disorders.

To be effective, ergonomic design for push/pull tasks must consider:

  • Human factors such as height, weight, age, gender, strength, posture and physiological capacity.
  • Task factors including distance moved, forces required to initiate and sustain movement, direction and nature of movement and task duration.
  • Cart/equipment factors such as size, weight, stability, caster/wheel specification and handhold type, height and orientation.
  • Floor/ground factors including surface characteristics, slope and contaminants.

Contrary to popular belief, horizontal push force is more significant than load weight in pushing and pulling tasks. Proper wheel or caster selection and equipment design can enable workers to move thousands of pounds safely and efficiently. Caster/wheel choice alone can reduce push force significantly. Rolling resistance refers to forces that resist movement and defines the amount of force a person must generate and apply to move wheeled equipment.

This force — called the starting or initial force by ergonomists — is always greatest at the start, just before movement begins. Fortunately, starting force must only be exerted briefly. Once acceleration is achieved, less force — called the sustained or rolling force — is required to maintain movement. The final major force that affects cart movement is turning force which can occur while the cart is in motion or during positioning.

Next time: How ergonomics mitigates force.

Ergonomics Opponents Girding for Battle

California Democratic Representative Hilda Solis was confirmed yesterday as President Obama’s Secretary of Labor by a Senate vote of 80-17. The U.S. Chamber of Commerce is already said to be marshalling its forces. With a very pro-labor Solis at the helm, the chamber is anticipating a pitched battle over reinstatement — and probably toughening and expansion — of ergonomics laws instituted under Clinton but quickly wiped off the books by Bush.

Solis hails from California, the only state with ergonomics laws that have any bite to them — though Michigan is struggling to pass similar measures. California forces employers into compliance when workplace practices are found wanting. Business leaders and chamber executives fear that Solis will use the tough California model to craft national laws mandating ergonomic practices. Solis has been a persistent champion of labor rights and national ergonomics laws since her election to the U.S. House in 2001.

Solis can expect to have the President’s backing. On the campaign trail last year, Obama discussed the need to address musculoskeletal injuries, telling the Charlotte Observer that OSHA “must attack this problem with all of the tools at its disposal — regulations, enforcement, training and compliance assistance.” He is expected to reverse the Bush administration’s stance on national ergonomic standards.

The chamber considers national ergonomics standards to be “the mother of all regulations,” charging that they would cost businesses millions of dollars, which they call unconscionable at any time, but particularly given the current economy. In stumping against ergonomics regulations, the Chamber cites not only prohibitive expense, but suggests potential for substantial abuse. Opponents of ergonomics laws fear that businesses will be held legally liable for employee musculoskeletal and repetitive motion injuries that happen off the job.

“Let’s fact it: We all go through things in our lives as simple as bad sleeping habits or exercise or recreational activities that would cause our bodies to feel discomfort,” Mare Freedman, director of labor law policy for the chamber told Rob Hotakainen, a reporter with McClatchy Newspapers.

Supporters of national ergonomics laws cite rising health care costs and continuing workplace hazards that take a serious toll on U.S. workers as compelling reasons for instituting national ergonomics standards. Freedman said the chamber doesn’t dispute that providing a safe and healthy workplace is good business practice; however, the group thinks efforts should be voluntary, not mandated. Supporters of ergonomics, charge that many employers won’t act unless forced.

The Cost of Ignoring Ergonomics

Back in industry’s dark ages, equipment was designed to do a task without much thought to the comfort or safety of the worker who would be operating it. Back injuries, tendonitis, carpal tunnel syndrome and other stress and repetitive motion injuries were an aggravating and often debilitating part of the job. The toll wasn’t just on the workers, industry paid a price in decreased productivity, poor product quality, increased medical and workers’ compensation costs, low morale and high absenteeism. The annual price tag for workplace injury and illness is estimated at $171 billion.

That’s a pretty hefty price tag considering that America spends about $170 billion a year on cancer and $164 billion on cardiovascular disease, the country’s two biggest killers. According to an American Medical Association study, each year in America there are 6,500 deaths from workplace injuries and more than 60,000 deaths from workplace-related diseases. Non-fatal workplace injuries number 13.2 million annually with 862,000 illnesses. That’s a staggering price in human suffering and industry dollars. The total cost of workplace injuries is nearly equal to the combined annual profits of America’s 20 largest companies.

But that’s just part of the picture. Workers’ compensation claims already cost American businesses $60 billion annually, according to the U.S. Department of Labor. More than 50% of those claims are for back injuries from lifting, pulling, pushing and straining, says the National Council on Compensation Insurance. In fact, workplace back injuries, which involve lengthy and costly treatment, affect more than 1.75 million workers each year, according to the Bureau of Labor Statistics. Add in the estimated time-lost cost per injury of $26,000 per incident and the prevention of a single injury can result in an immediate savings of $26,000.

This staggering cost and the desire to provide American workers with healthier and safer working conditions gave rise to ergonomics and the beginning of a radical change in the way industry approaches equipment design.

Next time: The rise of ergonomics in industrial design.

Making the Most of Your Space

A few years back, when business was booming, the answer to the need for increased space because of increased business was simple – upgrade to a larger facility that can handle the increase of inventory.  Now things aren’t quite so simple, increases in margins remain slim and there is constant competition to attract and keep new customers, so many business are leery about taking on greater overheads to try and meet customer demands – instead businesses are being forced to recreate the space that they are in an effort to hold the necessary inventory to satisfy customer demands.

This may mean changing storage racks, warehouse aisles and converting office space in order to make room for additional product storage and this restructuring of space may also mean that the equipment being used may no longer be as effective with the more constrained spaces.  Traditional forklifts can be bulky and may need a good deal of space to  maneuver  around a warehouse  – if you decrease the amount of room for travel there may no longer be enough room for a large forklift to effectively operate.

Though upgrading to smaller, safer and more efficient equipment will bring about an initial investment, unlike assuming a new lease for a larger space, this investment will immediately begin to pay for itself.  The powered carts and lifts from DJ Products allow a single employee to move heavy loads around in the smallest places easily – meaning that your employees won’t struggle at all in the smaller and more cramped spaces and that your business will maintain the same level of productivity despite the fact that your employees have less space to move around in.

Your new equipment will cost less to operate and allow your employees to get the job done quicker, which is exactly the formula you need to attract and keep more customers without having to move into a larger facility.