Innovate, Dont Vegetate

“We’ve always done it that way” just won’t do.

That’s new with you?

I trust you have an answer. And I hope you’re the one involved in making news at your company. This country needs all the innovators it can get — especially in material handling. I’m not talking about your material handling vendors. Their businesses have always depended on innovation for survival. A lot of that innovation came out of corporate parents or partners with international roots.

The way global markets are developing, with so many jobs in industries like yours being lost to overseas competitors, job security comes with homemade innovation on the end-user side. What are you doing that will give your company a competitive advantage?

This issue of Material Handling Management is dedicated to your colleagues in several industries who saw a need, gathered the resources to meet that need, then followed through with an innovative solution. The innovators we profile, starting on page 25, work in the military, academia, our transportation infrastructure and, yes, even in distribution. These are Material Handling Management’s Innovation Award winners for 2003. In 2004 we’ll profile an innovator every month. We anticipate the economy will be healthy enough to justify this frequency and that we’ll bring out a long line of contenders.

R&D spending is headed in the right direction, according to a survey by GlobalSpec, a specialized search engine and online community for engineers and technical buyers. Of the 600 respondents to its survey, only seven percent said they had reduced R&D spending this year, compared to 23 percent last year. That means more companies are answering the call to come up with some of their own answers to economic problems.

A Georgia Tech study supports that finding, reporting that Georgia manufacturers that compete based on innovation in products and processes, rather than on low cost, earn higher profits and benefit from higher wages. The 2002 Georgia Manufacturing Survey, conducted by the Georgia Institute of Technology’s Economic Development Institute and School of Public Policy, also found that on average, annual wages were $10,000 higher at innovative manufacturing firms and returns on sales were almost a full percentage point higher.

That’s the silver lining. The cloud? The majority of Georgia manufacturers are still competing based on cost rather than innovation. The researchers feel that’s a bad sign because companies competing on low cost are vulnerable to competition from international producers with even lower costs.

America has always been the leader in industrial productivity thanks to its intellectual property. There have been times when other countries laid claim to U.S.-grown ideas and used them to their competitive advantage. But today, cheap labor seems to be the wild card of international rivals.

MHM challenges you to look beyond lower costs and prices as your key competitive strategy. Design a new product. Develop a new process. Improve an old procedure. Reorganize your organization. Do these things even if the 2004 economy doesn’t end up looking like it will meet our high expectations.

And don’t be quiet about your innovations. Get the word out through your company’s newsletter. Success is contagious. Let MHM know about it, and we may spread the word even wider. You could be one of our Material Handling Innovators of 2004. Just e-mail your story to me. Our editors will select the best ones.

Whether or not you get written up in our pages next year, the fact you’re thinking about it now is a good start. Innovative thinking will help get you through another year like this one. If enough people are like-minded, it’s a pretty good bet the U.S. economy will get better.

Tom Andel, chief editor

[email protected]

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