The beauty of MHM is there's something in each issue for anyone involved in logistics. But when you're done with this particular issue, there's another person who might appreciate spending some time with it: your procurement manager.
Who better to have a Buyer's Guide about material handling and logistics? In the past, these disciplines were mysteries to most people in purchasing. They didn't know an order picker from a pallet truck. That's beginning to change, however.
Procurement is starting to pull professionals in from a variety of disciplines, including logistics. More than ever, people responsible for purchasing capital equipment have had some practical experience with the technology. But they need to make their mark quickly in procurement if they're going to keep their jobs. That means making a difference on the corporate bottom line.
According to an Accenture survey of chief procurement officers, 82% of the 78 respondents expect to maintain their position only three years or less. And many have supply chain backgrounds, including operations or engineering experience. They identified “achieving savings targets” as their number-one challenge. That was followed by retaining the right talent and getting alignment across various internal organizations around finance.
So the challenge for purchasers as the economy bottoms out and starts to return to health will be, how do they stay strategically important?
During bad economic times, many procurement professionals play the “bad cop” in getting costs in line with what is happening in their businesses. That has had an impact in many organizations and on many industries — including material handling equipment providers. In the North American lift truck market in 2009, for example, 97,000 units were sold. That was the lowest sales figure for that industry since 1980. At the beginning of this year industry analysts predicted a modest 3-10% growth. But according to Brett Wood, president of Toyota Material Handling USA, this industry is doing so well so far this year that it revised its forecast to 26% growth. He estimates the North American market will end up with more than 123,000 unit sales.
This has some procurement people worried that businesses will drift away from their procurement strategies as the economy recovers and won't work as hard at renegotiating with suppliers.
Well, the best negotiations are based on good information. That's what you'll find in MHM's Buyer's Guide. In addition to the vendor listings in the directory itself, this month's feature articles supplement those listings with information on achieving the hard and soft benefits that contribute to a quick return on investment. Hard benefits are easy to calculate because their numbers are easy to find. The softer benefits — like safety and environmental sustainability — are not as soft as they used to be. In fact procurement officers are starting to pay more attention to them, thanks to input from the material handling and logistics professionals who work with them.
For example, in Going Wireless to Stop Accidents you'll read how workers wearing wireless RFID devices can limit the consequences of equipment malfunctions or worker mistakes and thereby reduce lost-time injuries. For those who want harder numbers on RFID's ROI, read Serge Blanco Scores With RFID and find out how sports retailer Serge Blanco used RFID to improve productivity by 45% and now receives, verifies and ships merchandise in less than a day (instead of three). Even when ROI is secondary to the softer benefits of, say, feeding the hungry, solutions like voice picking technology can help keep foodbank costs under control and enable them to turn one donated dollar into seven meals (Food Banks Raise Interest in Voice to Keep Costs Low).
Low-tech solutions like safety netting (L'Oreal forklift operators work safer with a net), dock seals (Loading Dock Seals have Toughened Up) and a variety of others (Low-cost, high-yield solutions) can also make a big difference on a company's bottom line.
So when you're done with this special issue of MHM, pass it along to your procurement department. It could be the start of a profitable relationship.
