January 26, 2010 Industry Uptick Predicted

Volume 13 | Issue 1

Not quite a bellwether of overall economic health; yet signs point to an ease in belt-tightening.

There isn’t a profession that material handling doesn’t touch and after a slide down the proverbial financial conveyor belt over the past year and few months, a predicted steady uptick, while not a precursor to robust growth, is nonetheless a sign that industry is waking from its deep sleep.

John Nofsinger, CEO of the Material Handling Industry of America (MHIA), is cautious but optimistic about the forecasts for growth. “We predict a long gradual ascent,” he announces. “We don’t see a steep V-shape. There won’t be a rebound back to 2007-08 levels for two to three years, but from as deep as we were, there will be a steady upward climb.” And how deep was the descent? Pre-recession material handling was a $150 billion industry. Nofsinger anticipates the industry will probably only reach $125 billion by 2011, which indicates a more than $25 billion drop off since Lehman Bros. and subsequent bank failures tipped the balance of the economy in September of 2008.

For the industry to fully recover, businesses need to release capital to provide infrastructure for the future – not just in material handling but across the board, he notes. “Once confidence starts clicking we should start to see growth. What we’re seeing now in the recent two quarters are spotty but regular activities,” Nofsinger explains.

The MHIA routinely forecasts ebbs and flows in the industry, predicting the last business cycle downturn in 2001-03 long before the terror attacks of 9-11. “A lot of activity is capital intensive,” he adds. “People don’t build buildings or buy machinery every year.”

Nofsinger is fully confident, however, that the private sector can stimulate its own growth. “Absolutely,” he says. “The private sector has a unique way of policing itself and getting rid of things people don’t want. It doesn’t mean you don’t need responsible oversight, but when you artificially intervene into activities of enterprise, and disrupt the risk/reward motive, it’s not quite the same engine.”

NA 2010: EDUCATION AT THE FOREFRONT
As “The Industry That Makes the Supply Chain Work®” material handling is perhaps one of the oldest known to humans. Starting with the invention of the wheel, the conveyance, storage and distribution of materials has grown into a finely tuned network and on a global stage, has charged itself with the very complex responsibility of ensuring speed, safety and efficient delivery. An ubiquitous industry, material handling does indeed make the world go ‘round.

MHIA was founded in 1945 as the Material Handling Institute. “A lot happened during the war to revolutionize distribution and the way goods were handled, stored and moved,” Nofsinger notes. It was clear to those who were launching new enterprises that a new form of standardization and normalization was needed. The Institute, started in Pittsburgh, held its first trade show in 1948, and in 1988 formally created the Material Handling Industry of America Division. Today, headquartered in Charlotte, N.C., and with more than 700 members, MHIA operates with 18 associations and subgroups under its umbrella, covering various components of material handling and logistics technologies, products and services.

Throughout its history MHIA has geared its activities toward the education and enlightenment of those involved in material handling. Its upcoming Material Handling & Logistics Show – NA 2010, slated for the I-X center in Cleveland, Ohio, April 26-29 – will offer more of the same, and feature a high proportion of new products. The show will run 50 on-floor seminars, typically 45 minutes each, to give attendees the opportunity to understand products, technologies and solutions.

In particular is an event titled Future Track, which focuses on building a sustainable workforce in terms of development, training and education. “With fewer people entering the (material handling) workforce, how do we respond to create talent pools?” Nofsinger poses. “How do we design the workplace differently employing more worker-centric solutions?” There will also be sessions on trends in retail distribution, and the business case for sustainable distribution centers.

In addition to featuring various “solution centers” – The Center for Manufacturing and Assembly Solutions, the Center for Fulfillment and Delivery Solutions, the Center for Information Technology Solutions and The Knowledge Center – NA 2010 will also offer a Supply Chain Summit to discuss the leading supply chain models of the future. This will run an entire afternoon and bring together views from the military, universities, industries and government. Speakers will include an MIT expert who will talk about overall outlooks and a brigadier general from the Department of Defense who will discuss supply chain management.

Altogether NA 2010 should draw between 15,000-20,000 visitors and showcase 400 exhibits.

ON THE MOVE
Integral to MHIA’s mission is a focus on current trends and one of the biggest involves what Nofsinger describes as concurrence, or the application of solutions allowing goods and information to move together, so the status of the materials is known at every juncture. “This plays into security issues, as far as whether a shipment or container is tampered with,” Nofsinger says. “Technology makes it easier to detect things. We need tighter and better controls over handling of shipments and containers.” Seamlessness, he adds, is also very important, alongside energy efficiency, in which more efficient battery and fuel cell technologies are being created to power motors and drives.

“There’s also a lot of effort going into worker assistance, as far as making it easy for workers to do repetitive activities without as much manual intervention,” he stresses. “And we continue to see evolution of the third-party structure warehouse, so a company doesn’t have to invest millions of dollars operating its own warehouse and can better focus on its core manufacturing capabilities.”

While not a lobbying organization MHIA nonetheless follows issues regularly and, in particular, finds its activities concentrated in education. “We’ve identified a number of gaps in education at the university level, in the area of supply chain processes,” Nofsinger explains. “Too little research has been commissioned into the field. As a result in the last few years we’ve issued substantial research grants to develop ergonomic, lean warehousing and warehousing efficiency teaching tools in universities such as Ohio State, Michigan, Oklahoma State and Auburn.” Grants are generally in the $50,000 range. In addition, the Material Handling Education Foundation, Inc. has given nearly $2 million in scholarships to students, over 90 percent of who have made careers in the industry.

MHIA is also reaching out to vocational schools, community colleges and high schools, with a technical career education component. In Rock Hill, S.C., a hands-on working warehouse has been created by the Advanced Technology Center, in which students learn the basics of material handling and warehousing by assembling food stuff into backpacks for children who may not have access to nutritious meals at home. Similar technical career initiatives take place in cities like Lehigh, Pa., Chicago and Miami. By participating, students have the opportunity to parlay their experience into a workplace career.

“Sustaining the workforce is the 500-pound gorilla – you can’t wait until the workers aren’t there to address the issue,” Nofsinger stresses.

But as many gorillas have invaded industry over the past several years, it seems evident that their demise, at least in part, has been achieved through keen awareness of the problem and a willingness to find solutions. And for an industry that finds solutions daily to the most complex material handling and logistics needs, the demands of the future should be in equally good hands.

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