US Cutting Tool Orders totaled $190.0 Million in April 2023 which brings Year-to-Date total up 15.2% from 2022
April 2023 U.S. cutting tool consumption totaled $190.0 million, according to the U.S. Cutting Tool Institute (USCTI) and AMT – The Association For Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was down 15.8% from March’s $225.6 million and up 7.5% when compared with the $176.7 million reported for April 2022. With a year-to-date total of $809.0 million, 2023 is up 15.2% when compared to the same time period in 2022. These numbers and all data in this report are based on the totals reported by the companies participating in the CTMR program. The totals here represent the majority of the U.S. market for cutting tools. “While several industry market segments have contracted recently, cutting tool market indicators remain positive with anticipated mid-single digit growth for 2023,” commented Jeff Major, president of USCTI. “There is a consensus that cutting tool inventories are higher within the distribution segment, which may indicate a short-term inventory burn followed by a possible uptick in renewed buying.” “After a spike in the first quarter of 2023, April shipments of cutting tools fell back to the levels seen at the start of this year, still remaining 7.5% above the April 2022 performance,” said Mark Killion, director of U.S. industries at Oxford Economics. He expanded on this, saying, “Demand from durable goods manufacturers has supported shipments over the past year but is now expected to turn weaker in coming months, in line with expectations for a shallow recession.” The Cutting Tool Market Report is jointly compiled by AMT and USCTI, two trade associations representing the development, production, and distribution of cutting tool technology and products. It provides a monthly statement on U.S. manufacturers’ consumption of the primary consumable in the manufacturing process – the cutting tool. Analysis of cutting tool consumption is a leading indicator of both upturns and downturns in U.S. manufacturing activity, as it is a true measure of actual production levels. Historical data for the Cutting Tool Market Report is available dating back to January 2012. This collaboration of AMT and USCTI is the first step in the two associations working together to promote and support U.S.-based manufacturers of cutting tool technology. The graph below includes the 12-month moving average for the durable goods shipments and cutting tool orders. These values are calculated by taking the average of the most recent 12 months and plotting them over time.
AIT Worldwide Logistics’ Vaughn Moore named EY Entrepreneur Of The Year® 2023 Midwest
Regional award places Moore in national competition, celebrates ambitious entrepreneurs who are building bolder futures During a celebration ceremony in Chicago last night, Ernst & Young LLP (EY) announced AIT’s Executive Chairman and CEO, Vaughn Moore, as an Entrepreneur Of The Year® 2023 Midwest Award winner. Now in its 37th year, Entrepreneur Of The Year is one of the preeminent competitive business awards for transformative entrepreneurs and leaders of high-growth companies who are building a more equitable, sustainable and prosperous world for all. “I’m honored to receive this award from EY,” Moore said. “It’s an achievement I’ll treasure and share with all AIT teammates. Whether AIT is growing our business around the world, giving back to the communities where we live and work, or leading the way on sustainability in logistics, teamwork is what drives our success.” In 2012, Moore became an owner of AIT after leading his team of Executive Vice Presidents in a successful leveraged buyout of the company. Since that time, Moore initiated an incredible growth ride highlighted by expansion across Asia, Europe and North America. Under his leadership and successful strategic growth plans, AIT’s annual revenue is more than $2.5 billion today—an increase of 800%. Moore has also led the way on AIT’s values-based approach to both service and corporate sustainability, with an aim to create better living and working conditions through initiatives addressing environmental, social and governance disciplines. For example, as a signatory of The Climate Pledge, AIT launched an ambitious initiative to achieve net-zero carbon emissions by 2035. An independent panel of judges first selected Moore as one of 35 finalists, then as a Midwest region winner. Judges evaluate entrepreneurs based on their demonstration of building long-term value through entrepreneurial spirit, purpose, growth and impact, among other contributions and attributes. Moore and his fellow regional winners will next be considered by the national judges for the Entrepreneur Of The Year National Awards, which will be presented in November at EY’s annual Strategic Growth Forum®. The Entrepreneur Of The Year National Overall Award winner will then move on to compete for the EY World Entrepreneur Of The Year™ Award in June 2024. Since its inception in 1986, EY’s Entrepreneur Of The Year program has recognized more than 11,000 entrepreneurs in more than 60 countries. Learn more at ey.com/en_us/entrepreneur-of-the-year-us.
PTDA welcomes six new members
The Power Transmission Distributors Association (PTDA), an association for the industrial power transmission/motion control (PT/MC) distribution channel, welcomes two new distributors, three manufacturers and one associate to its membership. Distributors Exim Engineering provides power transmission products, conveyor components, gear box units, speed reducers and safety products. For over 25 years, Exim’s talented staff has been providing customers with the necessary information and support to meet their needs perfectly. Learn more. Full Circle Industrial, Inc. is a creative service company specializing in rebuilding speed reducers, gearboxes and pumps from all manufacturers. The company also distributes an ever-growing line of equipment, maintenance parts and industrial products and services. Full Circle technicians boast over 75 years of combined experience. The company’s mission is to help the community, environment, employees and customers become more sustainable while being devoted to leading the field in customer satisfaction. Learn more. Manufacturers Encoder Products Company (EPC) is a leading designer and world-wide manufacturer of motion sensing devices. EPC began operations in 1969, producing a line of custom encoders (the original Cube series) from a small, home-based shop. Today, EPC is one of the largest privately held encoder manufacturers in North America, producing the most complete line of incremental and absolute rotary encoders in the industry. Learn more. Oil States Industries, a subsidiary of Oil States International (NYSE: OIS), is a major global provider of integrated energy systems and solutions. For 75 years, the company has provided cost-effective solutions to meet drilling & workover, production, lifting and mooring challenges. The company also serves customers in the onshore, marine and industrial markets. Learn more. SITI Power Transmission USA Inc., founded by Filippo Guerra in 1967, specializes in the manufacturing of gearboxes and electric motors. The company, currently accomplishing 70% of their turnover in the foreign markets, is developing new product lines and is focused on entering the field of the heaviest applications used in industrial sections of high expansion, including renewable energies and waste recycling. Learn more. Enlighten.Net, Inc. is a leading provider of document management software and has been a trusted partner to distributors throughout North America for 20 years. The company offers robust solutions to help organizations of any size save time by providing simple yet powerful tools that are embraced by employees at all levels. With capabilities including full text search, quick retrieval and secure access from anywhere, ENet Docs improves companies’ operational efficiency. Enlighten.Net’s AP Automation, Sales Order Automation and AR Automation reduce the errors, time and expense associated with manually processed orders and invoices. Learn more. The Power Transmission Distributors Association (PTDA) is a global association for the industrial power transmission/motion control (PT/MC) distribution channel. Headquartered in Chicago, PTDA represents power transmission/motion control distribution firms that generate more than $19 billion in sales and span more than 2,500 locations. PTDA members also include manufacturers that supply the PT/MC industry.
Episode 395: Fostering psychological safety in the warehousing industry
In today’s episode of The New Warehouse Podcast, we have a special guest, Rob Van Stratum, a managing partner and APICS master instructor at Supply Chain Education CZ. Rob is an expert in the field of supply chain management and will shed light on the fascinating concept of psychological safety within the warehousing industry. Get ready to explore this intriguing topic that can transform how teams operate in the workplace. But before we dive into the episode, let’s learn more about Rob and his journey in the supply chain space. Rob Van Stratum has had a diverse career spanning academia and consulting in the supply chain field. With decades of experience, Rob has taught general, supply chain, and change management to students from various backgrounds. As an APICS instructor, Rob has helped countless individuals enhance their knowledge and skills in supply chain management. Please tune in to hear directly from Rob as he shares his expertise on psychological safety and its impact on the warehousing industry. Understanding Psychological Safety in Warehousing Teams According to Rob, psychological safety refers to an individual’s perception of the consequences of taking an interpersonal risk. It involves feeling safe to ask questions, take risks, and make mistakes without fearing negative repercussions. Rob explains that teams with psychological safety are more likely to foster open communication, collaboration, and continuous learning. According to Rob, signs that employees are feeling psychologically safe include: Asking questions and seeking clarification: When employees feel safe, they are more likely to ask questions and seek clarification without fear of being judged or criticized. They feel comfortable admitting what they don’t know and are open to learning from others. Taking risks and sharing ideas: Psychologically safe employees are willing to take calculated risks and share their ideas and suggestions. They believe you will value and consider their input, even if you do not implement their ideas. Admitting mistakes and seeking feedback: Employees who feel psychologically safe are likelier to admit their mistakes and seek feedback from others. They understand that mistakes are opportunities for growth and learning, and they trust that their colleagues will provide constructive feedback rather than blame or punish them. Speaking up and challenging the status quo: Psychologically safe employees feel comfortable speaking up and challenging the status quo when they believe there is a better way of doing things. They speak out their opinions and offer dissenting viewpoints without fear, knowing their contributions will receive respect. Collaboration and teamwork: Employees who feel psychologically safe are more likely to collaborate and work as a team. They trust their colleagues and are willing to share resources, knowledge, and support to achieve common goals. Open and honest communication: Psychologically safe environments foster open and honest communication. Employees feel comfortable expressing their thoughts, concerns, and emotions without fear of retribution or judgment. Engagement and innovation: Employees who feel psychologically safe are more engaged and motivated. They are willing to take the initiative, explore new ideas, and contribute to the organization’s innovation and improvement efforts. When leaders and organizations can create an environment that fosters psychological safety, they promote employee well-being, collaboration, creativity, and productivity. The Value of APICS CLTD Certification in Distribution and Transportation Rob and Kevin delve into the value of APICS certifications in the distribution and transportation space. Rob emphasizes that the value of any certification is directly proportional to the number of people who hold it. APICS certifications, including Certification in Logistics, Transportation and Distribution (CLTD), Certification Supply Chain Professional (CSCP), and Certification in Planning and Inventory Management (CPIM), are widely recognized and respected within the industry. Being CLTD certified provides professionals with a comprehensive overview of essential supply chain concepts and demonstrates their commitment to continuous learning and professional growth. Creating a Culture of Psychological Safety in the Warehouse The discussion with Rob also focuses on how leaders can foster a culture of psychological safety within their warehouse teams. Rob highlights the importance of dependability, structure, and clarity in creating a psychologically safe environment. He suggests that leaders should encourage open dialogue, provide constructive feedback, and ensure team members understand their roles and responsibilities. By nurturing psychological safety, leaders can empower their teams to take risks, learn from mistakes, and contribute to the overall success of warehouse operations. Key Takeaways Psychological safety is crucial for creating an environment where team members feel comfortable taking risks, asking questions, and making mistakes. APICS CLTD certification offers significant value in the distribution and transportation space, providing professionals with a comprehensive understanding of supply chain concepts. Leaders can foster a psychologically safe environment by promoting open communication, providing constructive feedback, and establishing clear roles and responsibilities. The New Warehouse Podcast EP 395: Fostering Psychological Safety in the Warehousing Industry
PTDA 2023 Industry Summit offers new discoveries
The Power Transmission Distributors Association (PTDA) will convene for the PTDA 2023 Industry Summit in Amelia Island, Fla. on October 19-21, 2023. This year’s program—themed “Discover”— will offer cross-channel networking, shared learning and collaborative experiences. “The Industry Summit is a great opportunity for our members to step away from routine of the office and spend time connecting face-to-face with people who drive their business and our industry forward,” says PTDA President Mike McLain, vice president, Allied Bearing & Supply, Inc. “We’ve designed a program to address key issues impacting our industry with speakers who will provide information and solutions. Combined with plenty of opportunity to build business and network with peers and friends—against the beautiful backdrop of Amelia Island—this year’s event is sure to be a draw.” The signature event of the PTDA Industry Summit–the Manufacturer-Distributor Idea Exchange (MD-IDEX)–is a time- and cost-effective forum bringing together distributor and manufacturer executives for high-level discussions on market strategies and issues. MD-IDEX will feature two sessions for 2023. Day one will offer an open format and day two will feature the traditional format of pre-schedule appointments between manufacturers and distributors. Distributor and manufacturer members alike laud MD-IDEX as one of the best face-to-face cross-channel business programs with a measurable ROI for participants. Well-respected industry thought leaders will offer keynote presentations including: Renowned economist Dr. Alan Beaulieu, Founder and President of ITR Economics, and an Industry Summit favorite. Beaulieu will address the ever-evolving global economic landscape, what’s on the horizon and opportunities for PT/MC companies to seize and challenges to avert. A panel of PTDA industry veterans will discuss ways to adapt to fluctuations in the industry and other common issues like e-commerce, supply chain challenges, mergers and acquisitions, vendor relations and changing consumer behavior. Seasoned leadership trainer and consultant Jim Pancero will address innovative approaches to strengthen sales strategies, highlighting the “Four Core Values” teams must define to successfully build customer loyalty and become the buyer of choice. PT WORK Force®, an initiative of the PTDA Foundation, will welcome market analyst Alex Chausovsky to highlight key data and approaches to help employers level up their compensation and benefits strategy—an imperative for attracting high-performing, impactful employees. Highlighting insights from her book, How Winning Works: 8 Essential Leadership Lessons from the Toughest Teams on Earth, world class team builder, San Diego firefighter and World Champion Adventure Race, Robyn Benincasa, will share how synergy is “the magic that allows groups of ordinary people to accomplish extraordinary things.” She’ll offer innovative team-building strategies to help employers raise teams to the next level. Additional networking opportunities abound at the PTDA 2023 Industry Summit. From gatherings of the PTDA Women in the Industry (WITI) and Next Gen groups, to receptions and networking lunches, to a farewell event along Amelia’s Island’s famed shoreline, participants will gather content and grow connections. For more information, visit ptda.org/IndustrySummit. Those registering before August 25, 2023 will receive a $100 discount.
29% increase in new Industrial Manufacturing Planned Projects in May 2023; Minnesota new to Top 10
IMI SalesLeads has announced the May 2023 results for the new planned capital project spending report for the Industrial Manufacturing industry. The Firm tracks North American planned industrial capital project activity; including facility expansions, new plant construction, and significant equipment modernization projects. Research confirms 184 new projects in May as compared to 143 in April in the Industrial Manufacturing sector. The following are selected highlights on new Industrial Manufacturing industry construction news. Industrial Manufacturing – By Project Type Manufacturing/Production Facilities – 167 New Projects Distribution and Industrial Warehouse – 66 New Projects Industrial Manufacturing – By Project Scope/Activity New Construction – 62 New Projects Expansion – 64 New Projects Renovations/Equipment Upgrades – 60 New Projects Plant Closings – 17 New Projects Industrial Manufacturing – By Project Location (Top 10 States) New York – 16 Texas – 15 Ohio – 13 Indiana – 12 Michigan – 9 Minnesota – 8 (New to List) Pennsylvania – 8 Georgia – 7 Ontario – 7 South Carolina – 7 Largest Planned Project During the month of May, our research team identified 12 new Industrial Manufacturing facility construction projects with an estimated value of $100 million or more. The largest project is owned by Applied Materials, Inc., which is planning to invest $4 billion for the construction of a manufacturing, laboratory, and office facility in SUNNYVALE, CA. They are currently seeking approval for the project. Completion is slated for 2026. Top 10 Tracked Industrial Manufacturing Projects GEORGIA: Graphite product mfr. is planning to invest $800 million in the construction of a manufacturing facility in BAINBRIDGE, GA. They are currently seeking approval for the project. Completion is slated for 2025. PENNSYLVANIA: A steel company is planning to invest $218 million in the construction of a manufacturing facility in ALIQUIPPA, PA. They are currently seeking approval for the project. Completion is slated for late 2025. TEXAS: Semiconductor mfr. is planning to invest $200 million for the expansion of its manufacturing facility in LUBBOCK, TX. They are currently seeking approval for the project. MICHIGAN: Automotive mfr. is planning to invest $200 million for the construction of a 1 million sf EV component manufacturing facility in AUBURN HILLS, MI. They are currently seeking approval for the project. Construction is expected to start in Summer 2023, with completion slated for late 2024. MISSISSIPPI: Wood products mfr. is investing $200 million in the construction of a manufacturing facility in BEAUMONT, MS. Construction is expected to start in the Summer of 2023, with completion slated for early 2025. TEXAS: Semiconductor component mfr. is planning to invest $185 million for the expansion, renovation, and equipment upgrades on their manufacturing facility in ROUND ROCK, TX. They are currently seeking approval for the project. OHIO: A steel company is planning to invest $145 million for an expansion of its manufacturing facility in MINGO JUNCTION, OH. They have recently received approval for the project. TENNESSEE: Industrial equipment mfr. is planning to invest $120 million for the renovation and equipment upgrades on their manufacturing facility in JEFFERSON CITY, TN. They are currently seeking approval for the project ARIZONA: Furniture mfr. is planning to invest $100 million for the construction of a 1-million SF manufacturing, distribution, showroom, and office campus on 107th Ave. in AVONDALE, AZ. They are currently seeking approval for the project. KANSAS: Tire mfr. is planning to invest $100 million for the expansion of its manufacturing facility in JUNCTION CITY, KS. They are currently seeking approval for the project. About IMI SalesLeads, Inc. Since 1959, IMI SalesLeads, based in Jacksonville, FL is a leader in delivering industrial capital project intelligence and prospecting services for sales and marketing teams to ensure a predictable and scalable pipeline. Our Industrial Market Intelligence, IMI identifies timely insights on companies planning significant capital investments such as new construction, expansion, relocation, equipment modernization, and plant closings in industrial facilities. The Outsourced Prospecting Services, an extension to your sales team, is designed to drive growth with qualified meetings and appointments for your internal sales team. Visit us at salesleadsinc.com.
Loyal customers are a breed – and you are the stud
Customer satisfaction is at an all-time high. Customer loyalty is at an all-time low. Why? Simple. Satisfied customers will shop anywhere. Satisfaction is not any indication that the customer will repeat a purchase. As a consumer, you have often been satisfied and never returned to that place of business. A more complicated reason is that business is just now discovering that satisfaction is no longer the measure of customer success – loyalty is. What is a loyal customer? One who will create positive word-of-mouth advertising about you, refer other people to do business with you, and fight before they switch from you to a competitor. Well, Jeffrey, how do you make customers loyal to you? Is it a low price? No, the second someone offers a lower price, the customer becomes “loyal” to that lowest price. There’s more to loyalty than money. Money is usually the bait used to lure loyal customers from their present supplier. The lower the loyalty, the more they’ll take the bait. Loyal occurs if you’re first in the mind of the customer when they want what you sell. A satisfied customer is the last to tell you they decided to buy someplace else. Loyal, first to know. Satisfied, last to know. Hmmmm. Loyal is best understood when related to the word, “fan.” When you go to a college or grow up in a city, you are a loyal “fan” of their sporting teams. Fan is short for fanatic. How many fanatic customers do you have? Sports loyal is when you love one team and HATE their arch-rival (their main competition). Who loves you? To make it even more complex, loyalty is not a one-action event. If it were, everyone would go out and do it. Loyalty evolves like loyalty to a spouse or friend. It matures (or dissolves) over time, based on your deeds, actions, and words. So how do you get customers (people) to be loyal to you or your business? Since loyalty doesn’t just “happen,” the answer is a question: What are the elements that breed loyalty? Here are a few: Being unusual where usual is expected. Changing the boring stuff you do every day to WOW the customer and create an atmosphere where the customer “has to” tell others how great it was. Email, voice mail, phone greeting, invoices. Standard stuff you change to SET the new standard. Getting business for your customers and prospects. If you want to build loyalty beyond belief, just start GETTING your customer’s hot leads and prospects that turn into business for them. Now when you call your customers, they won’t know if you’re buying or selling. Giving your customers and prospects valuable information to help build their business. Your customers want answers, not always more of your product. If you want customers forever, become valuable, become a resource they can’t live without. Give proactive service. Calling customers to tell them they need service or supplies just before they were about to call you. Letting them know when the “deals” are coming up. Doing something memorable for them, so that they call others and tell them about you. Service way beyond the sale. Offering product use tips and information that help your customer build her business or achieve her goals. Give the best service they’ve ever had. Having great service is at the heart of the loyalty process. Service that starts with yes, provides solutions, and ends with WOW. Having friendly service. How important is friendly? Ask yourself where you LOVE to do business, and I’ll bet everyone there is friendly. Your customers want the same from you. Answering the phone and helping in a memorable way. How do you feel automated computer phone answering sets with customers? How do you like it? Does it breed or erode loyalty? Saving money by not having someone human greet your customers is the single best example of “penny wise, dollar foolish” of the twenty-first century. Customers call for one reason – they want help. Why give them the hell of the computer? Give something they’ll use every day and show it to others. Delivering an ad specialty that’s so unique, they show or tell others. The difference between a coffee mug that sits in a drawer and one that’s shown to everyone is about $2.00. If it’s shown to twenty other people, that’s just $0.10 per WOW. Going beyond the expected. They expect a delivery fee – set it up for free. They expect a two–week delivery – get it for them the next day. Being fun, unusual, creative, and poignant. Being human in the world of business can set you apart more than you know. Become likable, and people will like to do business with you. Loyal is the most difficult of the customer service goals to achieve. But once you have it, you have something your competition will never have: the next order. About the Author: Jeffrey Gitomer is the author of twelve best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His real-world ideas and content are also available as online courses at www.GitomerLearningAcademy.com. For information about training and seminars visit www.Gitomer.com or email Jeffrey at salesman@gitomer.com or call him at 704 333-1112.
Getting closer
I am sitting at my computer on May 14 wondering if my T Bills will be worth anything two weeks from now. I must tell you, on a financial front, we are in deep Dudu if we default on our debts. WHAT A MESS. And if I get bored, I run to YouTube to see what I can find out about where the EV (Electric Vehicle) vs ICE (Internal Combustible Engine) debate stands. Came across one program that was pretty good where they compared EV total cost against an ICE total cost over 125,000 miles. As it turns out the EV purchase cost is well in excess of a similar ICE model, but not as much if you take into account the $7,500 credit available on new EV’s. But let’s remember you must be able to “pay” for the EV and will not get the benefit of the if you don’t have at least $7,500 tax to pay. And it is probably safe to say that you need at least a $100,000 annual income to wind up with that type of tax. The bottom line is that the total cost (cost to purchase plus operating costs) over $125,000 was about the same at $65,000. The higher purchase price of the EV plus fueling was the same as the lower-priced ICE unit with the cost of gasoline and repairs. Thinking further ahead you would expect the EV cost to decrease as demand climbs, which could reduce total cost to the point where EV wins the cost game (if the demand for electricity does not get so high that cost increases get to the point where we once again wind up with a tie). Could happen. For me, I am thinking there are other alternatives that could provide similar climate benefits for less cost. Hydrogen in some form is that option. During my visit to ProMat I had a chance to spend some time with Plug Power while they were showing off how one of their units could be used with lift trucks. Less operating hassle compared to both acid and lithium batteries but similar overall run times per charge. And having H20 as the exhaust is not bad either. Toyota has developed an engine that operates along this line and concludes that EV is not necessary if buyers use the Toyota as an alternative to EV. Dealers, as far as lift trucks go, this is an option you have to keep in mind because customers are going to ask about it. As far as our financial picture is concerned, I believe it will be tougher than expected, mainly because of the banking crunch taking place. With BK’s increasing banks take steps to review their outstanding loan portfolio to see if they have any substantial risk to consider. Being in this frame of mind banks are cutting back on new financing requests or asking for tighter coverage on existing bank loans. We discussed this topic and reaction before, and I really cannot blame the banks if they decide they must cover their butts to stay solvent. But let’s not forget that these issues also concern your customers, especially those who constantly pay late or have known cash flow problems. In the end, the banking situation will slow the economy down to where we can prepare for a hard landing. To assist with your planning for any type of downfall that may appear, last month we went through a Balance Sheet (BS) exercise where I suggested you investigate cleaning up the BS with a goal to convert as many assets as possible into CASH because you are going to need it. The alternative is a balance sheet with assets decreasing in value once the recession goes into full swing, which, of course, are part of your bank collateral which the bank will be reviewing on an annual basis. Now, let’s discuss the Income Statement (IS) which, of course, represents how we did profit-wise over a segment of time. You all have an idea of how the IS works and understand that it is entirely possible, with all the changes taking place in BUSINESS these days, that Income Statement results could put a strain on the BS, your cash position, and the overall value of the company. Consequently, knowing what is likely around the bend I do not believe you can sit back and say there are no changes required in your business. You can, of course, come to that conclusion, but please do so after you have examined all your risk factors and find nothing out of order. And heck, I haven’t even mentioned AI yet! I expect a reduction in overall revenues (net of inflation) to soften up to the point where you will be glad that you have that extra cash available because of converting assets into cash. In other words, covering your fixed and variable costs will require both a more profitable business as well as cost reduction. I also do not see the negative impacts on your business reversing itself post-recession. Some items are just too sticky to do that. So, let’s go through an IS statement review this month using typical MHEDA numbers, and see what potential changes to anticipate and plan for. To help us focus I put together a brief review of a dealer’s potential sales mix and gross profit percentages and provide my thoughts on what to expect going forward. For comparison purposes, I also added similar data from the construction dealer side. My overall comments will be addressed to lift truck dealers and not so much to the construction side. I listed the dealer’s revenue and gross profit line items and then in the far-right column indicate what I expect each line item to do (net of inflation) based on my crystal ball to date. > representing an increase in the line item. < a decrease. New Sales I expect sales levels to fall as a result of both less demand and lower
Time to balance out your dealer operations to lessen employee fatigue and low morale
I recently attended the MHEDA’s Annual Convention and Exhibitor Showcase and as always, came home with some great takeaways and new industry connections. The theme of this year’s convention was ‘The Human Factor’, which is the topic at the heart of every organization. One topic specifically addressed employee burnout. As one of the 2023 MHEDA material handling business trends states: ‘Some employees are experiencing worker fatigue and low morale due to current pressures in and out of the workplace. Leaders must be cognizant of this and provide support when and where needed.’ That statement surely resonates, as I find that in many operational instances, positions like Operations Managers or Service Managers at your dealership are asked to wear many ‘hats’. One of these many ‘hats’ sometimes includes the management of their fleet of service vehicles. This could be a daunting responsibility and can take their focus away from your dealership’s core business: selling parts and services along with providing new, used, rental equipment to your customers and prospective customers. It can be a complex and time-consuming process to research and purchase the right fleet vehicle to meet your dealership’s needs, especially since the performance of your service vehicle fleet can be directly related to your service technician’s productivity and profitability. Think about some of the pain points that come along with managing a fleet of service vehicles: Purchase Cycle Management: Sourcing and procuring the vehicles in the fleet and dealing with tax, titling, registration, and certifications. Upfitting: Ensuring the vehicle is equipped with proper storage and tools. Branding: Having the vehicle wrapped or painted with the company logo and design. Maintenance and Repairs: Ensuring regular maintenance and timely repairs of the service vehicles can be a significant challenge. Coordinating service schedules, handling unexpected breakdowns, and minimizing downtime of the vehicle and non-billable time of your service technician. Fleet Tracking and Visibility: Maintaining visibility and tracking the location, utilization, and performance of each service vehicle in the fleet can be complex. Identifying inefficiencies, optimizing routes, and monitoring fuel consumption. Compliance and Safety: Ensuring compliance with regulations and safety standards. Cost Control and Budgeting: Managing costs and optimizing the budget for the fleet can be a challenge. Controlling fuel expenses, minimizing overtime, and identifying cost-saving opportunities while maintaining service quality can pose difficulties. How efficient and profitable are your service routes? Fleet Management/Cost of Ownership Think about the same ‘cost of ownership’ value-added sale you make to your customer for a new lift truck with scheduled maintenance for parts and service that your dealership offers. These same principles hold true to your service vehicle fleet. If your Operation or Service Managers are tasked with the fleet management of your service vehicles, you are asking them to take on a lot of these tasks, you are asking them to do the following: Vehicle Selection: Considering factors such as payload capacity, fuel efficiency, maintenance costs, and reliability of the vehicles. Regular Maintenance: Keeping the service vehicles in optimal condition by having regular inspections, oil changes, tire rotations, and other recommended maintenance tasks. Fuel Management and Fleet Tracking: Monitor and manage service vehicle fuel consumption. Manage fuel cards or telematics systems (if chosen) to track vehicle fuel usage and identify any discrepancies or excessive consumption. Manage fuel-saving activities such as avoiding idling, reducing speeding, and planning efficient routes. Vehicle and Driver Records: Keep detailed logs of which technicians are handling which vehicles, the condition of the vehicle, mileage before and after shifts, tire conditions, fuel costs, maintenance history for each vehicle, etc. Constantly analyze this data and make decisions accordingly. For example, is one vehicle’s fuel costs higher than the rest? Lifecycle Planning: Manage aging fleets and avoid higher maintenance costs. Having to decide the optimal time for vehicle replacements or upgrades while analyzing factors such as maintenance costs and depreciation. This is a lot to ask of your Operation or Service Manager to manage. Think of how much time they will have to devote to this that takes them away from focusing on and managing your core business. Let us explore some other key components of effective service vehicle fleet management. Customer Experience Service vehicles with your company logo act as moving billboards, increasing brand visibility and awareness. As they travel to different locations, they attract attention and help build brand recognition among potential customers. Clean and uniform service vehicles convey a sense of professionalism and credibility. When customers see well-maintained vehicles with a consistent brand image, it enhances their perception of your company’s reliability and quality of service. Having clean and branded service vehicles sets your dealership apart from competitors who may have generic or unbranded vehicles. It gives you a competitive edge by showcasing your commitment to professionalism, attention to detail, and overall brand image. Providing clean and uniform service vehicles with your company logo can also boost employee pride and morale. It gives them a sense of belonging and identification with your company, which can positively impact their performance and customer interactions. Does your service vehicle fleet showcase your overall brand image? Are your service vehicles clean and uniform? Are your technicians proud to drive and work out of your service vehicle fleet? Storage It is important to optimize storage and organization while utilizing bins, drawers, and shelves in your service van to keep parts organized and easily accessible. Additionally, what does your customer see when your service technician opens their van? Consider the vehicle layout and storage solutions; is the layout and storage standardized across your fleet? If a technician has to move out of an old van into a new van, how long does that take? If the layout is standardized across the fleet, then it should be a simple move of tools and parts inventory. This will also reduce the amount of non-billable labor hours to accommodate the move. Parts Inventory Remember to regularly evaluate and adjust your parts stocking strategy based on the specific needs of your material handling and lift truck service business. As former
How is inflation impacting warehousing and the supply chain?
Until recently, high inflation has been more of a theoretical concept for many business owners and consumers. After all, it’s been decades since this country experienced severe inflation. But the past year has made inflation a major concern for consumers and supply chain partners. Here’s how inflation is driving up the costs of just about everything that impacts the supply chain and how your business can respond effectively. How Inflation is Impacting Warehousing and the Supply Chain Inflation measures the rate of an economy’s rising prices. When this condition exists, it impacts other areas, such as wages, demand, and the availability of certain services. Here is how inflation is affecting warehousing and the supply. 1. Shrinking Demand for Goods and Services One common impact of inflation is a contracting demand for goods and services. In other words, as prices go up, people will buy less stuff. This will affect the need for things like warehouse space, labor, and transportation. If your business continues to produce or store the same amount of goods that it did in the past, it will probably end up with excess that it can’t sell. 2. Higher Materials, Transportation, and Labor Costs Inflation doesn’t just impact the prices of goods on the shelves. It also drives up direct costs associated with things like raw materials, transportation, and labor. Some raw materials continue to be scarce, which affects pricing, and there are continuing labor shortages throughout the transportation and warehousing industries. Fuel prices are also a major factor in logistics, driving up freight and transportation costs that were already rising before driver shortages. 3. Rising Interest Rates and Less Access to Working Capital Some businesses in the logistics industry rely on different sources of working capital funding to stay afloat during turbulent times. But when inflation is part of the equation, so are high interest rates. When the Federal Reserve continues to raise interest rates, this makes short-term borrowing unaffordable for small businesses. How Warehouses and Supply Chain Partners Can Respond to Inflation Many supply chain and logistics professionals are seeing how inflation is negatively affecting their business. These impacts include delayed orders, long lead times, price and rate increases, and supply chain instability. But businesses in these industries aren’t helpless. When facing these tough economic conditions, here are several ways warehouses and supply chain businesses can respond. 1. Become More Flexible One of the best ways to persevere in times of economic uncertainty is to become as flexible as possible. How can you do this? First, if you are only dealing with one manufacturer, one shipping company, or one logistics firm, it may be time to diversify. When you explore alternative suppliers, this can prompt your current ones to offer better terms. At the same time, you have a backup on hand if your preferred supplier is unable to meet their obligations due to various supply chain challenges. 2. Gain Insights for Predictability The last thing you want to do during inflationary times is spend money on inventory you don’t need. It costs money to purchase items, transport them, and store them. And, if people aren’t buying stuff due to higher prices, this could devastate your business. You can use insights from your warehouse management system (WMS) to better forecast demand for inventory purposes. Digital twins is another solution that allows you to simulate business performance in various scenarios so you can plot the most prudent course. 3. Improve Spend Visibility How much visibility do you have into your current costs? If you have incomplete or inaccurate data, it’s time to address this matter before you run into a cash flow issue. Fortunately, some of the same insights that are providing better predictability can also help you improve spending. When you review your insights, this provides an opportunity to discover various ways of eliminating or cutting costs. For example, you may be purchasing similar or identical items from different suppliers. You can consolidate shipping on items or explore other ways to streamline your operations. 4. Boost Supplier Engagement Traditionally, supply chains have operated as a series of separate steps and business partners who communicated only as much as was necessary. In today’s environment, better collaboration between suppliers is the best way to streamline operations and save costs. By opening the lines of communication with your suppliers, you can investigate alternative ways to accomplish your goals. For example, you may be able to get discounts for using a certain shipper or waiting a few days extra to have your items combined with another order. 5. Leverage Automation Solutions Digital solutions enable warehouses and other supply chain partners to get the most out of every dollar they spend. For example, warehouses struggling with labor issues can employ various automation solutions to do more with less. RFID, WMS, and other integrated software solutions can deliver cost savings to businesses that mitigate the impact of rising costs in other areas. The use of automated vehicles and equipment can reduce repetitive tasks, which also reduces the number of employees required to do a job. Inflation directly impacts manufacturing costs, logistics, and many more areas associated with warehousing and the supply chain. When inflationary conditions exist, the supply chain may not run as smoothly as it should. But supply chain partners can implement solutions to improve flexibility, visibility, and predictability to achieve the best overall results in even the most challenging conditions. About the Author: In 2005, Newcastle Systems, Inc. was the first U.S. company to introduce mobile powered industrial carts to support supply chain applications, bringing leading-edge efficiencies to the market. The company has continuously pioneered new technology developing the first swappable lithium battery system for industrial applications in 2016, as well as the most ergonomic mobile carts available. A privately-owned, Massachusetts-based company, it serves some of the largest retailers, manufacturers, and distributors in the world to help to increase supply chain efficiency by consistently doubling employee productivity while reducing costly labeling errors by over 92%.
MassRobotics announces winner of Inaugural Robotics Medal recognizing accomplishments of Women in Robotics
MassRobotics, a robotics innovation organization, announced its inaugural Robotics Medal and Rising Star recipients at the IEEE ICRA conference in London on June 1, 2023. The Robotics Medal is the world’s first major prize to recognize the wide-ranging impact of female researchers focusing on the development of robotics around the globe. The Robotics Medal is awarded to a woman-identifying student/faculty nominated professor in robotics to recognize their impactful contributions to the field and includes a $50K prize awarded to the individual. The Rising Star Award recognizes up and coming woman-identifying persons making strides and advancing the field of robotics and includes a $5K award given to the individual. This inaugural MassRobotics Robotics Medal award, sponsored by Amazon Robotics, was presented to Nancy Amato at University of Illinois at Urbana-Champaign for her significant contributions to the field of robotics, notably for her research on the algorithmic foundations of motion planning, computational biology, computational geometry, and parallel computing. Alyssa Nicole Pierson, at Boston University, was awarded the MassRobotics Rising Star in Robotics Medal for her key contributions to the cooperative, distributed control of multi-agent teams. To encourage diversity in the field of robotics, Amazon established an endowment with MassRobotics in 2022 to support these two annual awards. The purpose of The Robotics Medal is not only to celebrate individual achievements, but also to inspire and encourage women and other underrepresented groups to participate in shaping the future of the world through robotics. “By endowing the Robotics Medal, we aspire to showcase and celebrate women robotics professors worldwide who have made a significant impact to the advancement of the field of robotics,” said Tye Brady, chief technologist at Amazon Robotics. “It is an honor to be the founding sponsor of the Robotics Medal and we are thankful for the significant contributions and teachings made by our rising stars and legendary pioneers in that field.” A call for nominations began at last year’s ICRA conference, with nominations coming from all around the United States including Texas, Washington, Massachusetts, Illinois, Minnesota, New York, and Pennsylvania, as well as around the globe from countries including Canada, Japan, Germany, Spain, Netherlands, Switzerland, and India. Submissions spanned a wide range of robotic technology fields and areas of research, from new materials for gripping, exoskeletons and assistive technologies, human robot interaction and motion planning. Since 2017, MassRobotics has grown from a Massachusetts-based incubator to a global robotics hub, helping support the adoption of robotics worldwide and providing startups with the resources needed to grow and scale. Of the current 80 startups that MassRobotics houses at its facility in Boston, more than 50% are from out of state and 25% are from outside the U.S. MassRobotics hosts STEM and robotics related initiatives specifically targeted for high school women and continues to promote women in robotics through events and networking to ensure women are recognized and heard. “We were thrilled by the overwhelming number of qualified nominations we received and impressed with the diversity of robotic fields and research happening across the globe,” said Joyce Sidopoulos, cofounder at MassRobotics. “It reflects the powerful contributions women have made and will continue to make to this important, vibrant and growing field supporting nearly all industries.” The Robotics Medal and Rising Star recipients were selected by a committee of robotics experts, led by MassRobotics, which convened several times and methodically evaluated the significance, depth and originality of technical contributions each nominee has made in the overall field of robotics. “The field of robotics requires the unique insights, inventiveness, and leadership of more female professionals to propel the science, engineering, and applications of this crucial discipline forward, and to inspire the ensuing wave of innovators,” says Daniela Rus, Director of the Computer Science and Artificial Intelligence Laboratory (CSAIL) at MIT and member of the MassRobotics board. “The Robotics Medal signifies far more than its substantial monetary award. It symbolizes an acknowledgement and celebration of the remarkable achievements of women who not only pioneer in the field, but also inspire as role models, sparking the curiosity and ambition of the forthcoming generation of roboticists.” A formal Gala awarding the medals and celebrating the winners will be held in Boston at the Museum of Science on October 21st. The Museum of Science will highlight the medal winners in their ongoing Women in Technology initiative. Tickets and reserved tables for the event will be available shortly. MassRobotics has created an endowment and welcomes contributions to support future cash prizes for The Robotics Medal. Contact award@massrobotics.org to learn about becoming a founding underwriter of The Robotics Medal. Nominations for the 2024 Robotics Medal and Rising Star are now open. More information can be found here.
WERC releases 2023 Annual DC Measures Operational Benchmarking Report and online benchmarking tool
The Warehousing Education & Research Council (WERC) has published the 2023 DC Measures Annual Survey and Report and updated the findings in the Online Benchmarking Tool that helps companies measure and improve operational performance. The DC Measures report captures 37 key operational metrics that are meaningful for warehouse and distribution center operations. The metrics are grouped into five balanced sets – customer, operations, financial, capacity/quality, and employee – plus the additional sets related to cash-to-cash cycle measurement. For each metric, the report provides a definition and information about how to calculate it. Used from year to year and based on responses from a diverse network of warehousing, logistics, and distribution professionals, the metrics provide a strong base and consistent approach to reporting performance. Introduction of ESG Metrics For the first time, DC Measures surveyed the current application of environmental, social, and governance (ESG) frameworks in the warehousing and distribution industry. It has become clear that DC managers must begin to consider ESG in order to manage stakeholders. The report identifies simple steps companies can take to develop an ESG strategy. Online Benchmarking Tool In addition to the report, WERC has also updated the Online Benchmarking Tool. This digital resource hosts a compilation of all DC Measures data since 2013. It is designed to help practitioners, 3PLs, and consultants customize benchmarking data to meet internal evaluation needs at an unprecedented rate of speed. A subscription to the benchmarking tool allows a full year of unlimited access to the data, which includes the full DC Measures library, data breakdown functionality, and saved report comparisons. Visit werc.org/metrics to learn more about the Online Benchmarking Tool and the 2023 DC Measures Annual Survey and Report.
April 2023 orders total $336.7 Million the lowest order value since January 2021 following two record years
New orders of manufacturing technology totaled $336.7 million in April 2023, according to the latest U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology. April orders declined 38.7% from March 2023 orders and declined 34.4% from April 2022 orders. Year-to-date orders totaled $1.72 billion in 2023, 13.6% below the same period in 2022. “March has traditionally been one of the better months for manufacturing technology orders, so April is typically a ‘down month’; however, this April was disproportionately off,” said Douglas K. Woods, president of AMT. “March 2023 was only 2% down from March in the previous year, yet the decline between March and April in 2023 was over five times larger than the decline in 2022. The momentum of order activity is clearly not as strong through the second quarter as it was last year.” Job shops, the largest customer segment, decreased their orders by just under 39%, declining slightly more than the overall market from March to April. This is the largest monthly decline in orders from job shops since January 2017. In addition to job shops, the automotive sector significantly reduced their orders in April 2023 after an exceptional uptick in March. It should be noted that a good portion of the work contract machine shops do is on behalf of the automotive sector, so their parallel decline in orders is not unexpected. “Consistently high interest rates, ongoing inflation, and the looming threat of a recession have caused businesses to rethink their capital investment strategies,” said Woods. “Job shops, which are the largest consumers of manufacturing technology, are mostly small and medium-sized businesses who are particularly affected by price and interest rate pressures. “In addition to USTMO, several other industry metrics compiled by AMT are showing a slowdown in activity relative to March. Regardless of what the Federal Reserve does with interest rates later this week, their outlook on economic activity, coupled with the May USMTO numbers available shortly after, should give a good indication of how hot or cool the summer will be for the manufacturing technology industry.”
Raymond celebrates forklift operators for National Forklift Safety Day
Intralogistics solutions provider demonstrates commitment to supply chain workers through innovative, operator-first product and technology design As National Forklift Safety Day (NFSD) approaches, The Raymond Corporation — designer and manufacturer of some of the industry’s most intelligent intralogistics solutions and advanced material handling products — extends its thanks to and celebrates the thousands of forklift operators who work at every point along the global supply chain. “For more than 100 years, we’ve developed innovative tools and technologies that help move materials efficiently,” said Michael Field, president and CEO, The Raymond Corporation. “But at the heart of it all are the forklift operators themselves. That’s why we’re recognizing and thanking all the forklift operators who keep things moving. And it’s why we’re committed to offering solutions that help operators work more confidently and efficiently.” Among the worker-focused innovations Field cites are: Engaging Learning Programs. When operators understand and implement best practices to operate forklifts, they feel more confident and productive in the important work they do. Safety On The Move, Raymond’s industry-leading forklift operator training program, has helped employers protect their people, equipment and materials since its introduction. Additionally, Raymond’s Virtual Reality Simulator is a flexible, scalable teaching tool that uses the latest immersive technology to quickly increase new operator proficiency and continually expand operator skills for reduced turnover. Operator Assist and Automation Technologies. Operator assist technologies like Raymond’s Pick2Pallet™ LED Light System gives operators the tools to help them perform their jobs more efficiently and accurately. As an added benefit, these products and systems help reduce errors and bring new operators up to speed faster. At the same time, Raymond automation technologies can help by performing basic, repeatable tasks, freeing operators to focus on more value-added jobs. Comfort and Convenience Features. Even the smallest features can make a huge difference in an operator’s comfort. So whenever possible, Raymond designs features like padded lean points, vibration-dampening floor mats, accessory bars and USB charging ports — to help make long days more comfortable. Worker-focused Process Optimization. Nobody knows a process better than the people who do the work every day; that’s why Raymond Lean Management (RLM) is focused on empowering employees to spot inefficiencies and make improvements to the processes they follow and on improving morale and engagement through continuous collaboration between employees and management. “We believe it’s important to highlight the material handling, warehousing and distribution industry’s appreciation for its workers and operators,” Field said. “It’s that appreciation that shows up in equipment and product design, our work processes, and our dedication to continuous improvement.”
Supply Chain reliability deteriorates prompting pulling forward of orders ahead of peak season
69% of freight forwarders surveyed hopeful of container demand recovery in 2023, out of which only 18% expect demand to appear within 1-3 months 51% are “guestimating” without a clear outlook of timeline for container demand bounce back Average container prices plummet by up to 82% from 2021 at world’s busiest ports as shippers grapple with Sluggish Demand Eurozone inflation, US West Coast labor challenges and Panama Canal drought amongst key challenges for container logistics industry According to Container xChange‘s June Forecaster, the persistent decline in container prices is being accompanied by resurging supply chain disruptions such as the Panama Canal drought, labor strikes on the US West Coast, and a technical recession in the Eurozone. The forecaster also predicts a further slide in average container prices in the coming weeks, with no signs of container demand revival. The sentiment is reflected in a survey that Container xChange recently conducted (in May 2023) with the global freight forwarding community. About 69% of respondents (406 sample size) are hopeful of a container demand bounce back this year in 2023. Only 18% are hopeful of this revival in short term (1-3 months). And about 51% are “guestimating” without a clear outlook of timeline for container demand bounce back. Container xChange Peak season demand revival Survey 2023 “The supply-demand imbalance worsens with upcoming vessel deliveries and low scrapping rates. Spot rates are at pre-pandemic levels in most trades, and contract rates are sliding. Coupled with low demand, the industry continues to grapple with overcapacity of containers and vessel capacity. Now we have labour disruptions and the Panama Canal drought, which in normal circumstances would lead to an uptick in freight rates as they absorb effective capacity, but any significant price effect is now highly doubtful in the current market.” Shared Christian Roeloffs, cofounder and CEO, Container xChange. “For shippers this means that supply chain reliability will deteriorate again, potentially leading to a “pull forward” on orders. This in turn will likely “flatten out” any peak season and further decrease the likelihood of a freight rate increase in the second half of 2023,” Roeloffs added. No signs of container demand yet for peak season Container prices generally surge during the preparation for the peak season. So far, these prices have failed to pick up. A study of average container prices on the Container xChange platform indicates a disappointing revival of demand. Below is a table that compares average container prices across some of the busiest ports in the world from the Container xChange platform. The prices have fallen to the lowest levels in the last three years of comparison. Clearly, the data indicates poor demand for containers so far till June. New York witnessed the average price of 20 ft dry containers to reach $6500 in June 2021, which has now crashed by 82% to reach at $1175 in June (1st week) 2023. Similarly, Long Beach port saw average prices reaching a peak at $4118 in the beginning of August 2021, which has reduced by 65% to reach $1430 in May 2023. This persistent fall of average container prices comes at a time when the shipping industry prepares for a ‘supposed peak season’. Average Container prices expected to fall further The average price trends of subsequent months from 2022 indicate that, these prices further declined in the months of July – December at majority of these ports in that year. If the same trend continues, these prices could further fall. “There are enough and more reasons to be pessimistic. With the peak season coming, the industry sentiment is negative. The industry is waiting for a demand comeback which doesn’t seem anywhere on the horizon.” Bottom of spot freight rates reached? “In a highly competitive environment such as container shipping, the minimum offer price tends to gravitate towards the level of variable costs. In the case of container transportation, variable costs have surged by approximately 15-25% since 2019, depending on the trade lane” remarked Christian Roeloffs, CEO and co-founder of Container xChange. “Consequently, the lower limit of freight rates offered by carriers has also increased by 15-25%. This poses challenges for shippers who now face higher variable costs for transporting cargo. Despite the significant decline in average container rates from 2021 to 2023, reaching almost 85% reduction, the underlying variable costs remain elevated—which makes a significant additional and sticky decrease in spot freight rates unlikely while contract rates still have room for further depreciation.” Retail Sales lagging, US imports slump According to the National Retail Federation (NRF), US retail sales are slowing, and US container imports are on track to drop by more than 20% in the H1 2023. “Both the US and Eurozone markets are experiencing disturbances contributing to a significant loss in consumer confidence, creating a ripple effect. Since the pent-up demand observed in late 2021, the industry is waiting for a ‘demand comeback’, which seems less likely in the coming peak season. Ofcourse there will be some demand, but rather subdued.” Added Roeloffs. Eurozone ‘Technical’ Recession “The impact of inflation on the global supply chain can be significant and wide-ranging. Rise in input costs and costs of financing, change in consumer behaviour and changing trade behaviours will lead to a ripple effect on global supply chains, impacting the demand for certain products or industries. Business will need to adapt their production levels, inventory management, and distribution strategies accordingly,” added Roeloffs. “With consumer demand remaining persistently sluggish for the peak season, sticky inflation levels are poised to exert an additional detrimental effect on demand.” Roeloffs concluded. This month’s container logistics report, ‘Where are all the containers’ covers data and information in length and can be downloaded from here About Container xChange Container xChange is an online platform for container logistics that connects all relevant companies to book and manage shipping containers as well as to settle all related invoices and payments. The neutral online platform… Connects supply and demand of shipping containers and transportation services with full transparency on availability, pricing, and reputation, Simplifies operations from pickup to drop-off
Christmas peak has not been cancelled
It is now the time of year when many retailers and their supply chain partners will be starting to plan and secure their warehousing space and resource requirements for the Big One – the ‘golden quarter’ and the Christmas peak. Predicting requirements seven or eight months ahead is always a nightmare, and this year looks particularly fraught. There is, of course, a ‘cost of living crisis’ but strangely, although full figures are not yet in, it looks as though consumer spending in the Easter peak held up much better than expected – indeed, anecdotally it appears that some retailers and suppliers were short of stock as demand exceeded their somewhat gloomy expectations. Price inflation remains painfully high but may decline rapidly over the course of the year. Or we may be trapped in a rerun of the high-inflation Seventies – both views are available, often from the same economic forecasters. One rather firmer prognostication is that e-retailing seems to have found its new natural level – around a quarter of retail trade. So omnichannel is the way forward for many retailers, with the additional complexity that this brings to warehouse space planning. Given the uncertainties, many firms will have held back on committing to space for the winter peak, and some, with pressure on margins and anticipating subdued trading, will have decided not to renew leases on some of their existing estates. That is no bad thing – in our experience it very rarely makes sense for a business to scale its ‘permanent’ warehousing facilities to accommodate the highest peaks in demand. This ties up capital, or drains cashflow, whilst making an inefficient use of scarce and increasingly expensive labor and other resources during the off-peaks – which for many firms is most of the year. And this year, particularly, is not a good time to be entering into long-term space commitments. Despite some big names, especially in e-commerce, rationalizing their warehousing estate, quality space is still in short supply, whilst landlords are facing eye-watering increases in the interest they are paying. Unsurprisingly this is reflected in rents: the agents Colliers report that in 2022 there was a year-on-year increase of 10.5% in rents for large (100,000 sq ft plus) units, and a huge 13.2% on smaller and multi-let facilities and, say the agents “these will continue to rise, albeit at a slower pace”. Meanwhile, the bills for rates, electricity and other utilities, insurance and all the other costs of operating even a half-empty warehouse continue to increase. The solution is to adopt strategies that embrace and make a virtue of short-term leasing. While the headline rates per square foot may look high, the business is only paying these for the time that the space is needed, and in practice rates are often highly competitive as the space provider is keen to see any return on what an underutilized or idle asset is otherwise. Nor is the renter paying throughout the year to heat, light, staff and otherwise maintain largely empty space. And often, if a business moves in to take up another company’s spare capacity (which may be because that company is overprovided, or because its peak requirements are at a different time of year) many of the operating costs, perhaps even including labor and IT, are already paid for, so the renting company is charged something closer to the marginal rate rather than the full cost. It can even be that facilities are available already equipped with levels of productivity-enhancing IT and automation that the business would struggle to resource or justify on its own account. However, the flexibility offered by a strategy that includes short-term lets isn’t just for Christmas. It can allow a supplier or retailer to experiment – with new product lines, with new regional markets or new customers, with new distribution chain architectures, with different blends and approaches to the physical store/e-commerce balance – at relatively little long-term risk. Such a strategy may even lead to semi-permanent arrangements: an understanding that the business is intended to take the same space for the same three months every year. Bis Henderson Space has many years of experience in helping companies ‘right size’ their peak space requirements, and then securing the right temporary space: right in terms of cost, location, and facilities, from bare sheds to space in fully manned and equipped distribution centers. We have built an extensive network of space partners who, sometimes occasionally, sometimes predictably year-on-year, have more warehousing than they need. They are often keen not only on the extra income but for the productivity and efficiency improvements – such as being able to maintain a fully employed permanent staff – that full occupation of their facility can yield. We help companies find and implement mutually beneficial deals surprisingly quickly – but be warned: an increasing number of companies are now actively seeking the benefits of including short-term accommodation as part of their warehousing strategy – and Christmas is closer than you think! About the Author: Steve Purvis, Managing Director at Bis Henderson Space has many years’ experience in this market. We can help convert your seasonal space requirements from a firefighting emergency to a considered tactical response as part of your wider warehousing/fulfilment strategy. If you’d like to learn more please contact Rob McWriter, Business Development Director at Bis Henderson Space on rob.mcwriter@bis-henderson.com or 7836 572500
METTLER TOLEDO to exhibit at IFT annual meeting in Chicago
METTLER TOLEDO will showcase analytical instruments and balances with solutions for the food industry at IFT’s 2023 annual meeting in Chicago, IL on July 17th-19th in Chicago, IL The IFT annual meeting will take place July 17th-19th, 2023 in Chicago, IL. Share and be challenged by the latest research, innovative solutions, and groundbreaking thinking. Take advantage of limitless opportunities to make new connections and expand your professional contacts. As an exhibitor, METTLER TOLEDO will be showcasing highly sensitive and accurate analytical instruments and balances used for in-depth quality control to assure food safety and quality. The food and beverages industry faces many challenges – responding quickly to fast-changing consumer demands, increasing food safety and regulatory compliance requirements, and improving productivity while increasing product quality. At METTLER TOLEDO, we create complete weighing and measuring solutions and services that help enhance your business excellence. Make sure to stop by METTLER TOLEDO’s booth #1812 for a hands-on demonstration of the following products and solutions from the following product lines: Analytical and Precision Balances Moisture Analyzers pH Meters & Sensors UV/VIS Spectrophotometers Density Meters & Refractometers Titrators MyBrix Since 1939, IFT has been advancing the science of food and its application across the global food system by creating a dynamic forum where individuals from more than 90 countries can collaborate, learn, and grow, transforming scientific knowledge into innovative solutions for the benefit of people around the world. Registration and Information This tradeshow will be on July 17th-19th, 2023 at McCormick Place, 2301 S Lake Shore Dr., Chicago, IL. Learn more about our attendance at IFT 2023 IFT First 2022: Annual Event and Digital Expo.
CSX announces $5 Million donation to the B&O Railroad Museum to launch a transformation of the campus in Southwest Baltimore
CSX Corp. has announced a gift of $5 million to the Baltimore and Ohio (B&O) Railroad Museum in Baltimore, MD towards the museum’s $30 million capital campaign in anticipation of the B&O railroad’s bicentennial anniversary in 2027. “CSX is proud to support the future of the B&O Railroad Museum and help expand its role in the community,” said Joe Hinrichs, CSX president and chief executive officer. “As the successor to the Baltimore and Ohio Railroad, CSX has been an integral part of the Maryland economy for generations. We are thrilled to be able to deliver this substantial contribution and serve as a catalyst of growth for this iconic institution and the Baltimore community.” The donation will be used to build the “CSX Bicentennial Garden,” an amphitheater and multi-use space that can host local organizations and hold community gatherings. This installation will serve as a vibrant event space and provide a fresh, new location to welcome visitors to the museum. CSX is the first corporate patron to pledge support for the campaign, which will improve the overall campus flow, add state-of-the-art educational space, including an Innovation Hall focused on present-day and future railroad technology, house extensive historical archives, and spark community economic development. “Today, we celebrate another great partnership between CSX and the State of Maryland as we honor the birthplace of American railroading, the B&O Railroad Museum,” said Governor Wes Moore. “This campus transformation will serve our administration’s goals of connecting institutions with their neighboring communities, expanding workforce training opportunities on campus, creating publicly accessible open space, and remodeling the South Car Works building, our nation’s oldest, continuously operating railroad repair facility as the new entryway to the Museum. Maryland will be ready to celebrate the 200th anniversary in 2027.” Baltimore built the first miles of America’s railroads. And for nearly 200 years CSX and the B&O Railroad have been essential to the growth of Baltimore’s economy and community. From the Howard Street Tunnel modernization project to preserving the city’s heritage at the historic B&O Railroad Museum, CSX continues to invest in and serve the community it has proudly called home for nearly two centuries. “We are profoundly grateful to CSX for their extraordinary commitment to the preservation and celebration of our nation’s railroad heritage,” said Kris Hoellen, executive director of the B&O Railroad Museum. “This significant contribution of $5 million dollars marks a milestone in our campaign towards transforming our campus in preparation for the 200th anniversary of American railroading in 2027. We thank CSX for their leadership to catalyze our campaign and for recognizing the importance of creating a beautiful, publicly accessible space in Southwest Baltimore – the CSX Bicentennial Garden.” Public-private partnerships helps the museum’s continued ability to tell the story of how railroading has shaped the history of America. With the inaugural contribution, CSX is encouraging fellow corporate partners to support the museum’s campaign – investing in Maryland and the future of Baltimore communities.
KPI Solutions appoints Jason Boehl as Vice President, Enterprise Solutions
Jason will provide strategic direction for client automation design and systems integration to transform distribution and fulfillment operations. KPI Solutions (KPI), a supply chain consulting, software, systems integration, and automation supplier has announced that Jason Boehl has joined the company as Vice President Enterprise Solutions. In this role, Jason will optimize clients’ distribution, warehousing, and fulfillment operations by uniting data-driven designs and innovative engineering with high-performance automation technologies, powered by KPI’s proprietary OPTO software platform. “I’m thrilled to join the accomplished professionals at KPI Solutions as we successfully address clients’ most complex labor, capacity, and efficiency challenges,” said Jason. “In this time of supply chain disruption, we are dedicated to creating and ensuring value through customized and cost-justified automation that increases throughput capacity and boosts operational efficiency across the distribution process.” “We are excited to leverage Jason’s experience as we continue to provide critical design recommendations, holistic operational optimization, and risk mitigation for our clients,” said Ron Adams, Chief Commercial Officer at KPI Solutions. “Jason’s extensive background with transformative warehousing and distribution projects will guide the delivery of customized and innovative automation solutions that increase productivity and build long-term client value.” Jason joins KPI after nearly a decade of increasing responsibility at Honeywell Intelligrated where he most recently served as Executive Director, Solution Consulting and Data Analytics. With his 25+ years of industry experience, he also holds expertise in warehouse and transportation software, engineered labor standards, warehouse operations, and Six Sigma lean practices. KPI Solutions was formed in 2021 with the combination of Kuecker Logistics Group, Pulse Integration, and QC Software. In 2022, the company acquired Precision Distribution Consultants, SIMCOM Solutions, and Commonwealth Supply Chain Advisors.
Is company gravity killing your organization?
Most business leaders stress the importance of understanding and responding to ever-changing customer needs to stay relevant and competitive. Yet why do so many companies spend the majority of their time focusing inward? We recently surveyed 50 business executives to understand their organizations’ strategic priorities. Among their top five, “customer” was by far the most-mentioned word. But the majority of these companies weren’t utilizing customer insights in their major business decisions and core processes – only customer-facing ones. That is, in four out of five companies, customer insights were only used to provide input to sales and marketing and did not directly impact their larger strategic agenda. So how do companies end up so isolated, even from their own customers? Think back on the last few “leadership” or “planning” meetings you attended. How much of the time was spent discussing internal issues and perspectives rather than external realities? In how many instances did customer insights change the opinion in the room? This is Company Gravity – the cultural pull that drives organizations to focus inward on their own perspectives and focus on the company’s interests and preferences over emerging customer needs. It is Company Gravity that creates organizational stagnation, resistance to change, and fear of the new – instead, clinging to the status quo. Company Gravity causes internal processes, policies, and systems to take priority over external forces, market share, and customer experiences. Of course, every company needs to ensure they’re following protocols, have checks and balances, and keep consistent with how business is done. But unless you are Walmart, you don’t have the luxury to simply force every customer and supplier to conform to the way you do things. You don’t have the luxury to only control costs to generate growth. An external perspective is essential to gain an advantage over the competition and get ahead of future risks. Getting the right insights in the door is crucial. This means looking beyond the obvious customer feedback and accessing new and underexploited data sources. It means learning to separate customer signals from noise. It means doing it not just sufficiently but better than the competition can. It means organizing customer insights so that they are easily accessible to all parts of the company and can be integrated into decision-making beyond the sales and marketing functions. It means reinforcing a customer-centric mindset and behavior by tying organizational performance metrics to the customer experience. (In fact, Amazon has nearly 80% of their performance metrics tied to the customers) Overcoming Company Gravity is not an easy feat, but it is essential for a company’s long-term survival. The more you engage with customers, the clearer the opportunities become and the easier it is to determine what your gravity-strapped competitors are overlooking. About the Author: Andrea Belk Olson is a keynote speaker, author, differentiation strategist, behavioral scientist, and customer-centricity expert.As the CEO of Pragmadik, she helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. Andrea is the author of three books, including her most recent, What To Ask: How To Learn What Customers Need but Don’t Tell You, released in June 2022. She is a 4-time ADDY® award winner and host of the popular Customer Mission podcast. Her thoughts have been continually featured in news sources such as Chief Executive Magazine, Entrepreneur Magazine, Harvard Business Review, Rotman Magazine, World Economic Forum, and more. Andrea is a sought-after speaker at conferences and corporate events throughout the world. She is a visiting lecturer and startup coach at the University of Iowa, a TEDx presenter, and TEDx speaker coach. She is also an instructor at the University of Iowa Venture School. More information is also available on www.pragmadik.com and www.andreabelkolson.com.