Gaining Ground Again

Nobody likes war. The philosophy of war can be beneficial, however, especially for material handling and logistics managers. Ask John Nofsinger. As CEO of Material Handling Industry of America, he has found—in a 30-year-old book—some inspiration for dealing with the economic battles MHIA’s members are fighting today. This book, called War Fighting, was written by A.M. Gray, a Marine Corps general. In it, the author addresses shaping the battlefield, and as you extend your forces, creating a competitive advantage over your enemy.

“I could exchange material handling and logistics words for his and that’s pretty much what our life is now,” Nofsinger told me. “Disorder is the name of the game and we have to manage it. The more complicated and integrated things become the more disorderly they become.”

We are certainly living in complicated times, and putting on a major trade show like ProMat in the midst of them takes some guts on MHIA’s part. Our preview of some of the technology to be displayed starts on page 21, but it only scratches the surface of what will be seen and heard at Chicago's McCormick Place the week of March 21st.

You will certainly hear more about survival strategies during the ProMat keynote, to be delivered by Tom Ridge, this country’s first Secretary of Homeland Security. He’ll share his views of today’s risk-centric environment and how to minimize those risks in favor of greater resiliency and security across global supply chains.

Might we be playing up these themes of conflict and survival a bit too much? After all, this is just a trade show. But Nofsinger says that at this year’s ProMat he’s expecting to see more senior-level attendees who have the authority to make purchases. In years past, this type of brass didn’t bother with material handling and logistics.

“Given the amount of money that is at the ready to be spent, there may be teams here that didn’t come in 09,” Nofsinger says. “Many of these people may want to pull the trigger quickly due to investment credits.”

Another concern, though, is will there be enough troops—skilled workers—who will stay with their companies once economic recovery is more certain? Many of the technologies on the show floor this year will be positioned as ways to both leverage the labors of the workers who stay and possibly eliminate the need to hire replacements for those who leave. Protecting productivity will be even more important in this post-recession environment.

Some companies may look to third-parties to fill their productivity gaps, much as some of the big auto makers have done over the years. However, as we note in our automotive industry report on page 15, some of these OEMs are using this perceived economic recovery as an excuse to rebuild their core competency—making cars. Up to now there has been a trend to outsource various assemblies. Nofsinger thinks this move by some back in-house could be a good sign.

“Many outsourced for convenience or just for dollars and didn’t really look at whether what they were outsourcing might put them at a long term strategic disadvantage,” he says.

Instead of building cars, or widgets, or whatever differentiated them in the market, some manufacturers started building unwieldy global supply chains that were vulnerable to service glitches. Now the idea of getting good at making things is gaining traction again. At the same time, smaller, more nimble supply chains are being built to sustain that traction. Logistics providers must adapt their strategies in kind to continue meeting their clients’ needs.

Industries will continue fighting disorder and uncertainty this year, but the promises of business and environmental sustainability in the years ahead will help strengthen the resolve of their troops.

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