Materials handling: The Supply Chain Inflection Point

“Only the paranoid survive.” Given the claims almost every candidate is making about the other guy (or gal), no matter their party persuasion, you might think I’m talking about politics. But, I’m talking about materials handling.

By ·

Editor’s note: This item initially appeared on the Website of Modern Materials Handling, LM’s sister publication.

Only the paranoid survive.” Given the claims almost every candidate is making about the other guy (or gal), no matter their party persuasion, you might think I’m talking about politics. But, I’m talking about materials handling.

That quote came from a book by Andy Grove, the former CEO of Intel, and he was talking about business leaders. The great ones, he added, never stop worrying and never stop learning.

That was one of the themes at yesterday’s opening ceremony at Supply Chain Reset, the annual logistics conference in Park City, Utah sponsored by HK Systems, now part of Dematic. By the way, for you Sons of Anarchy fans, today is patch-over day, when the HK Shirts become Dematic shirts.

Mike Kotecki, senior vice president of North American sales and the MC for the opening, added that the economy, and the supply chain, is at an inflection point. There’s $2 trillion in cash worldwide sitting on the sidelines, available for investment. Merger and acquisition activity is on the rise, which from a supply chain view means the need to rationalize supply chain networks and facilities. Inventory management has never been more important. While there seems to be no demand out there today, about 220,000 new people are added to the planet every day. Eventually those people will consume something.

And last, but most important for those of us in the materials handling business, the U.S. has maxed out on productivity – in the second quarter of this year, the nation’s productivity rate dropped by nearly 2% even though the hours worked was up. Some thinks that means business will need to hire again to keep up with demand. I look at that $2 trillion on the sidelines and think it’s the opposite: it’s an opportunity for business to invest some of that $2 trillion in automated and semi-automated materials handling solutions and technologies that will allow their existing labor to increase productivity and meet demand without appreciably adding to labor. For our industry, that’s a good thing. 

At dinner the other night, I talked to one of Dematic’s product managers who works with refrigerated warehouses. That industry is taking a harder look at automation than in the past. A robotics supplier told me that sales in 2010 have slowed from 2009, when they completed a number of projects, but his phone is ringing off the hook with requests for proposals. End users may not be looking to automate their entire operations, but they are looking for ways to automate key segments of their operations, like case picking.

That’s the big change and the inflection point I think our industry has reached. End users are realizing that their choices are no longer limited to a manual warehouse or a full-blown automated storage and retrieval system (AS/RS). There are a wealth of solutions available to fill the middle ground between those two options. That’s the opportunity for our industry over the next five or ten years. The challenge is to find that combination of technologies and solutions at the right price point to get productivity moving again. Hopefully, like Andy Grove’s take on paranoid leaders, the best in our industry never stop learning, never stop worrying and continue to innovate.


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Dematic · HK Systems · Intel · Supply Chain · All Topics
Latest Whitepaper
Leveraging Florida Ports to Expand Two-Way Trade with Asia
Florida’s geography is convenient to global markets and serves as the perfect conduit for Asia-focused container trade. Florida Ports, seaport white papers, Benefits of using florida ports
Download Today!
From the April 2018 Logistics Management Magazine
As companies continue to search for the next generation of logistics management talent, the existing workforce is being asked to deliver more than ever before. While our survey respondents aren’t griping about the workload, they maintain that new challenges require more resources.
LM Viewpoint: 2018 Salary Survey, delivering more than ever
Smoother execution through S&OP
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Reshaping the Restaurant Supply Chain in the Digital Age
Get an inside look at how a leading restaurant group Bloomin’ Brands Inc (BBI), coordinates its complex supply chain to deliver an exceptional restaurant experience at the lowest cost to serve.
Register Today!
EDITORS' PICKS
34th Annual Salary Survey: Salary growth slows, tasks soar
As companies continue to search for the next generation of logistics management talent, the existing...
Evolution of E-commerce: The possibilities of tomorrow
We know e-commerce is reshaping logistics, but what are the technologies savvy managers can leverage...

State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...