Demand for MH Equipment Increases
The market for conventional and advanced/automated material handling systems and equipment in the U.S. will increase 5.2 percent per year through 2006 to $23.5 billion, an improvement over the early 2000s performance that was characterized by recession and a weak capital investment climate. Along with economic recovery, demand will be stimulated by technological innovations resulting in improved productivity and efficiency, increased safety and greater ease of operations, especially in such advanced/automated segments of the business as material handling robots, automatic guided vehicles (AGVs), material handling software and high-end services (e.g., systems integration). These and other trends are presented in Material Handling Systems: Advanced & Conventional, a new study from the Freedonia Group Inc., a Cleveland-based industrial market research firm.
Demand for conventional material handling equipment — industrial trucks and lifts, conveying equipment, and hoists, cranes and monorails — will improve from recent levels but will not grow as rapidly as the more dynamic advanced/automated segments. The same will be basically true of the more established automated products such as automated storage and retrieval systems (AS/RS) and automated conveyors. The extensive amount of investment made in these types of products during the long economic expansion, coupled with the relatively long useful lives of most equipment, will translate into a less robust rate of growth than was experienced during most of the 1990s.
The market for advanced/automated material handling systems (including unbundled software and third-party-provided services) is projected to increase 6.6 percent per year through 2006 to $6.8 billion, noticeably faster than its conventional products counterpart. Along with recovering capital investment in the economy at large, gains will be fueled by the superior productivity-raising potential of advanced systems, magnified by aggressive vendor efforts to further upgrade performance at comparable or lower costs.
Increasingly, material handling equipment and systems will be computer-integrated into larger-scale factory automation and automated warehouse-type environments, where they will be linked to other aspects of the supply chain management process (inventory control, materials purchasing, etc.). Reflecting this emerging trend is the recent popularity of so-called material handling control systems, which provide a common interface between different types of material handling products within a facility.
Control Systems To Grow
Shipments of material handling control systems (MHCS) software and services reached nearly $494 million in 2001 in North America. This market is expected to grow at a compounded annual growth rate (CAGR) of more than 13 percent over the next five years, according to a newly released ARC Advisory Group study, Material Handling Control Systems North American Outlook.
A primary purpose of an MHCS is to manage the routing of parcels, work-in-process and inventory through a network of material handling equipment. “MHCS provides an interface between material handling systems and higher-level software application such as warehouse management systems [WMS] in a warehouse and collaborative production management [CPM] in the plants,” says Sal Spada, ARC director of discrete industry research. This MHCS interface provides a means to access real-time information from plant equipment regarding material location and tracking. Quite simply, a comprehensive material handling solution today would not be complete without this MHCS software layer.
An MHCS solution provides a uniform interface to a broad range of material handling equipment that reduces operator training time, maintenance costs and transportation time of individual goods. MHCS solutions are found in material handling systems for manufacturing plants, distribution centers, warehouses and parcel handling centers. Managing the equipment in these facilities requires relatively sophisticated software that is capable of communicating directly to conveyors, sortation equipment, AGV, ASRS and robots.
“Optimization of the sourcing, manufacturing and delivery of goods is viewed as the next opportunity for businesses to improve profitability,” says Spada. “A greater emphasis is on synchronization of the supply chain with customers and suppliers by improving the supply chain visibility. To be effective, extending the supply chain visibility depends upon greater reach of information on inventory in transit, work-in-process, and inventory in warehouses and distribution centers. As a result of this increased supply chain focus, MHCS solutions have taken on greater importance.”
MHCS solutions are capable of providing historical as well as real-time data to make process improvements in the equipment and staffing of warehouses and manufacturing solutions. Many companies are in the midst of adopting six-sigma initiatives, which rely upon data analysis to justify and identify process improvements. Without accurate data on a service or manufacturing process to support decision-making, organizations are unable to make informed decisions across departmental boundaries.
Increase in Purchase Plans for Handheld Devices
Network World has released the results of its 2002 Network World 500 study. It reveals corporations plan to purchase an average of 2,733 handheld units in the next 12 months, a 107 percent increase from last year’s study.
Corporate spending for these devices is also on the rise, increasing 260 percent to an average of $1.2 million in the next 12 months. Handhelds have found a home in the standard portfolio of enterprise work tools. More than 76 percent of the respondents who plan to purchase these devices indicate their companies will pay for the entire amount of the purchase. IT professionals take the lead role in the purchase and management of these devices. Mobile workforce productivity, and better customer service are driving the demand for handhelds, while security remains at the top of the list of major concerns.
Service To Recycle Electronic Equipment
To meet the increasing need for proper disposal and recycling of obsolete and damaged electronics, Safety-Kleen has developed a new service to recycle almost any electronic component, including computers, keyboards, mice, monitors, cathode ray tubes, hard/floppy drives, telecommunication hardware, copiers, printers and fax machines.
The Safety-Kleen Computer and Electronic Equipment Recycling Service provides collection, transportation, assistance with paperwork and recycling of electronics, one of the fastest-growing waste streams in North America. Recognizing that advancements in technology will multiply the environmentally harmful disposal of hazardous metals used to manufacture electronics, Safety-Kleen developed a program to help large and small companies by properly disposing of this new waste stream in compliance with local, state and federal regulations.
Business Conditions Slow, Still Favorable
According to the monthly Business Conditions Index (BCI) of the Packaging Machinery Manufacturers Institute (PMMI), manufacturing activity slowed in April, but is still showing signs of growth. The new orders component of the index held steady at 60.7 for the month; general business conditions dropped 4.7 points to 57.2; quotations dropped 8.7 points to 58.7, and shipments dropped 9.4 points to 51.3 points.
Any score above 50 indicates growth/expansion in that component of the index. Scores below 50 would indicate declines/contractions in those components of the index.
The April BCI tabulates the input of approximately 100 of PMMI’s 508 member companies. The BCI is based on PMMI’s “How’s Business” survey, a weekly poll of member companies.
“Between April and May, PMMI members have experienced a decrease in manufacturing activity,” says Charles D. Yuska, president, PMMI. “However, the major indices are still indicating expansion. This, combined with other favorable economic conditions reported by the Department of Commerce and other agencies, support a feeling of optimism for the manufacturing sector in general.”
Global Mandates on Recycling?
Eleven countries already have take-back laws for electronics — each a little different. Within five years it’s expected that 28 countries will have such laws. The European Union parliament is moving on three electronics recycling directives that will change the way manufacturers design products. In the U.S., electronics makers are trying to hammer out an agreement for a national take-back program (read national legislation).
Meanwhile, there are 24 new electronics bills in state hoppers and at least 10 mercury restriction bills that could affect electronics.
Electronics Recycling: What To Expect from Global Mandates is the first comprehensive international report for electronics makers on this new topic. Available from Raymond Communications (raymond.com), the 130-page report includes the details on recycling laws in 16 countries, contacts and analysis of many directives.
Companies Making News
Pactiv Corporation announced an agreement to purchase Winkler Forming Inc., a leading thermoformer of amorphous polyethylene terephthalate (APET) for food packaging, for $72.5 million. The purchase of Winkler will afford Pactiv an opportunity to expand in the wholesale bakery, confectionery and fresh-cut produce markets. The addition of APET products enhances Pactiv’s already extensive rigid display packaging product line, consisting of oriented polystyrene, talc-filled polypropylene, aluminum, molded fiber, ovenable paperboard, and foam products.
Lewco Inc. has purchased the LAHR Conveyor product line, popular in the metalworking industry.
Kalmar Industries and Patrick Corporation have entered into an agreement known as Patrick Technology and Systems to implement the Kalmar-constructed automated straddle carriers and integration of advanced container handling systems within the Patrick Terminals division.
Association News
The Scales Manufacturers Association has elected Robert J. Schuller, general manager, Hobart Corporation, president. Also elected was Richard G. Norden, president and COO, Fancor Inc., vice president.
The Warehousing Education and Research Council (WERC) has named the following to its board of directors: James L. Allen, Midwest Distribution Systems; William T. Gates, Standard Corporation; Susan Rider, RedPrairie; Annette Hartmann, The Swatch Group; and Steven P. Bova, WERC.
Play It Safe
USCO Logistics’ Baltimore distribution center has gone 10 years without a lost-workday accident. The 100,700-square-foot facility provides distribution services for a number of customers. The staff was honored for its extraordinary safety achievement. John Frick, USCO executive vice president and chief administrative officer, presented Fred Manzanares, distribution center manager, with an award citing the accomplishment.
Encouraging Employment News
U.S. employers will increase their hiring activity in the third quarter of 2002, continuing the steady trend toward recovery that began in second quarter, according to the Employment Outlook Survey, conducted by Manpower Inc. Of the nearly 16,000 firms interviewed, 27 percent plan to add employees in the third quarter compared with 21 percent in the second quarter. Only eight percent of the employers expect to reduce their current workforce. The survey also indicates eight of 10 sectors are forecast to improve workforce opportunities.
Humantech Ergonomists Obtain Certification
Humantech Engineering consultants Jeff Sanford and Tony Silva recently achieved the status of Certified Professional Ergonomist (CPE) from the Board of Certified Professional Ergonomists (BCPE). The company has 14 full-time CPEs, more than any other ergonomics consulting firm in North America.
Packaging Machinery Demand Up
U.S. capital spending for packaging machinery is predicted to increase by 1.5 percent to 2.5 percent in 2002, to an estimated $4.992 billion. The forecast is based on the findings by the Packaging Machinery Manufacturers Institute (PMMI). The Purchasing Plans Study says the growth benefits will not reach full stride until the latter part of this year. The full report is available from pmmi.org.
Robot Orders Increase
The North American robotics industry showed signs of stabilizing in the first quarter. A total of 2,350 robots were ordered through March, an increase of one percent over a comparable period in 2001. However, weakness in sales to overseas markets led to an overall decline of two percent in new robot orders received. This information comes from the Robotic Industry Association. For details, see roboticsonline.com.
Environmental Responsibility Rewarded
Dearborn Mid-West Conveyor Company has earned the International Standards Organization 14001 certification, demonstrating the company’s commitment to contributing to a cleaner environment. In April, Michigan Governor John Engler named the company to his list of Clean Corporate Citizens. Wes Paisley, president, says, “We are ahead of the curve and have exceeded industry standards. We look upon these standards as an investment in everyone’s future.”
What You Should Expect from an LES
What’s the return on investment from a logistics execution system? Depends. Some users get a quick ROI from a plain vanilla four-walls warehouse management system (WMS). Others achieved those efficiencies years ago and are ready to scale their four walls and connect to supply chain partners to share data on inventory flows — over the road, in the yard and throughout their distribution center network.
