Be Open to Options in 2012

Be Open to Options in 2012

You can’t deal with supply chain volatility if uncertainty has you paralyzed. Make networking for solutions your next move.

When Material Handling Management morphed into Material Handling & Logistics a couple years ago, we took a risk. MHM was a respected brand in our market. What if we’d lost our audience?

Well, you’re the same audience that will be flocking to Atlanta for the debut of the MODEX show and conference in February. People are making this trip for the same reason we’re now MH&L. Technology and best practices have combined to make us all part of a supply chain-driven economy.

If the last couple years in business have taught us anything, it’s that success or failure is a team effort. The people responsible for material handling inside the four walls must now coordinate with those responsible for transportation outside those walls.

That’s why I think the folks at MHIA made the perfect choice when they asked Rick Blasgen to keynote their conference. As president and CEO of the Council of Supply Chain Management Professionals (CSCMP), he communicates regularly with experts responsible for every point in a supply chain. CSCMP is also the driving force behind the “State of Logistics Report,” the annual snapshot of logistics’ place in the economy.

“In 2008 logistics costs were 9.4% of U.S. GDP,” Blasgen explains. “In 2009 we rocketed down to 7.8%. About $245 billion came right out of the logistics sector because of the recession. That’s indicative of companies foreseeing consumers cutting spending and then shutting their machine lines down so they didn’t create a bunch of extra inventory."

That’s not done by jamming on the brakes. It’s done by studying contingencies and making adjustments to plans. You’ll read more about contingency planning in a feature by Ron Giuntini in this edition of MH&L, and our MODEX preview will show you some new inventory planning tools, but first, meet Alastair Smith. He’s senior director of marketing and operations for the Port of Vancouver (www.portofvancouverusa.com), and as such, someone for whom the link between material handling and logistics is a lifeline.

Smith’s operations handle 5 million tons of cargo every year, but he expects that volume to triple by 2020. Much of that traffic will be driven by growth in Asian agricultural markets and by growth in alternative energy industries, particularly wind generation.

To prepare for that growth his organization is improving rail access into and out of the Port, deepening the waterway serving the Port to accommodate larger ocean vessels, and purchasing two 100-metric-ton capacity harbor cranes to be able to lift the ever growing size of wind generator towers and blades they’ll be handling.

With all these preparations, there are still things that keep Smith up at night. With about 80% of his inbound and outbound traffic destined for Asian markets, he worries about the impact of potential housing bubbles and financial turmoil there. He also worries about this year’s potential expiration of the Production Tax Credit that has helped spur the wind energy business. What helps alleviate his worries and what is compelling attendance at MODEX is recognition of the flexibility that the meeting of material handling and logistics can give anyone’s supply chain.

Hope to meet you in Atlanta.

Follow me on Twitter @TomAndel.

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