Though numbers at ProMat were strong, anxiety loomed over economic and workforce issues.
ProMat, the material handling biennial held this past January in Chicago, was deemed a great success by the Material Handling Industry of America (MHIA). There were 740 exhibits covering a show-record 305,000 net square feet.
But these upbeat numbers only partially concealed a deep anxiety running through the exhibitors and attendees at McCormick Place. The mood of uncertainty was very much present.
Indeed, no industry—material handling included—is immune to the global economic slide of the last six months. However, if previous business cycles hold true, the material handling and logistics industry will make it through the stormy weather.
At least that was the message from John Nofsinger, CEO of MHIA. During a state of the industry address to the international media, Nofsinger emphasized that, while troubled water might lurk ahead for the coming year, all signs point to a turnaround in the next 18 months.
“MHIA’s forecast is for a decline of new orders in 2009 in the 18% to 20% range, recovering late in 2010,” Nofsinger said. He based his projections on rate of change and compared them to leading indexes. By his estimates, the material handling and logistics industry will contract until 2010.
Nofsinger cited the Material Handling Equipment Manufacturing (MHEM) forecast as a proxy for the overall industry. While 2008 total U.S. MHEM consumption was up 5.3%, new orders grew 2.3% and shipments increased 6.9%, those numbers will inevitably drop.
By MHIA’s estimates, shipments could contract a staggering 15% in 2009, while leveling off at 3% in 2010. Overall domestic demand, which is calculated by shipments plus imports less exports, is expected to contract about 15% in 2009. After a period of expansion, Nofsinger says exports are forecasted to decline in 2009 and 2010 as demand in the global economy contracts.
Nevertheless, Nofsinger emphasized that the industry has weathered turbulent economic periods before, and all evidence suggests it will weather this one, too.
“It won’t be very long until the industry will find itself in a decelerating decline phase—with more bright spots appearing sometime during late 2009, no doubt as a result of the connections [made] here on the show floor,” said Nofsinger.
Alliances for Opportunity
Economic forecasts then gave way to discussion about opportunity, as Steve Schoeny, director of the strategic business investment division of the Ohio department of development, presented a proclamation to MHIA from Ohio Governor Ted Strickland and Lieutenant Governor Lee Fisher naming April 25 to May 1, 2010, Material Handling and Logistics Week in Ohio. The event coincides with the 2010 North American Material Handling and Logistics Show in Cleveland.
“To further Ohio’s commitment to the logistics and distribution industries, Governor Strickland has created a stimulus program that will provide more than $100 million over the next three years to cultivate continued success in the multi-and intermodal transportation capabilities in Ohio,” said Schoeny. “With Ohio located within a day’s drive of 60% of the population of the U.S. and Canada, our location, import/export acumen, infrastructure and workforce all serve to strengthen Ohio’s position in the inventory management and supply planning fields.”
Hal Vandiver, executive vice president of business development for MHIA, then introduced the Overhead Alliance, a coalition comprised of the Crane Manufacturers Association of America, Hoist Manufacturers Institute and the Monorail Manufacturers Association, which promotes overhead methods of lifting and moving materials.
According to Vandiver, the alliance supports the crane monorail and hoist industries as alternative lifting and moving solutions that can reduce accidents, improve workplace health and safety, reduce product damage, improve workflow and lower costs. Representative technologies include overhead bridge cranes, electric chain hoists, workstation bridge cranes, below-the-hook devices and radio remote controls.
Long before the economy became the preeminent issue, material handling was staring down the barrel of another significant threat: the inevitable changes coming to America’s workforce.
At ProMat, a panel discussion entitled “Building the Workforce of the Future,” grappled with how to respond to a rapidly aging American population, shifting workplace demographics, evolving skill sets and increasingly important life-work balance issues.
Moderated by journalist Forrest Sawyer, the discussion featured Kimberley Absil, delivery unit general manager for Sears Holding Corp.; Sharon Carrell, SPHR, director of sales and operations management development programs at McKesson Corp.; Josh Dennie, production control manager at Optimax Systems; Rob Hoffman, director of business development for the Chicago Workforce Board; and Bruce Mantz, executive vice president with Automated Distribution Systems.
The challenge today, panelists agreed, was finding and retaining quality employees and getting it right the first time. grappled with how to respond to a rapidly aging American population, shifting workplace demographics, evolving skill sets and increasingly important life-work balance issues.
Moderated by journalist Forrest Sawyer, the discussion featured Kimberley Absil, delivery unit general manager for Sears Holding Corp.; Sharon Carrell, SPHR, director of sales and operations management development programs at McKesson Corp.; Josh Dennie, production control manager at Optimax Systems; Rob Hoffman, director of business development for the Chicago Workforce Board; and Bruce Mantz, executive vice president with Automated Distribution Systems. The challenge today, panelists agreed, was finding and retaining quality employees and getting it right the first time.
One of the top themes was the importance of communication at every level of the operation. “Employers have to take responsibility for communicating expectations, not just finding warm bodies,” said Mantz. “Additionally, we continually offer employees the opportunity to share their input.”
At one point, Hoffman lamented that there is sometimes a resistance to change. When his company proposed a workshop for better recruiting strategies, barely half of his employees signed up. “What you see is a lot of fence sitting,” said Hoffman. “They’re skeptical of these programs.”
Carrell said one way to retain top employees is by simply offering room to grow.
“It’s not always about money,” she said. “People need to know that that they can be heard and that they bring value to an organization. Most people leave because of managers, not pay.”
One audience member, a high-school industrial technology teacher, said high schools are teaching the same skills they did 20 to 30 years ago. “The training issue is also a result of public education,” he said. “Companies need to reach down beyond the college level, into the high schools.”
Walking the Talk
The flooring for the featured product areas was made of recycled architectural fiber—sugar-cane stalks—and the exhibit carpet was made of recycled plastic bottles. The majority—73%—of components in the booth were rented.