Executives Upbeat About Economy

Oct. 1, 2004
Speaking to nearly 300 attendees at the HK Systems Material Handling and Logistics Conference, John Splude, president, HK Systems, told the audience that

Speaking to nearly 300 attendees at the HK Systems Material Handling and Logistics Conference, John Splude, president, HK Systems, told the audience that since mid-2003, economic conditions have been improving for his company.

“We’re seeing,” said Splude, “that customers are looking for more innovation in the products they buy, and in 2004, software sales have shown some growth.”

While the industry is still challenged by rising steel prices, Splude says personal and professional cautiousness is driving executives to demand higher returns on any investments they make.

“RFID [radio frequency identification] will be responsible for the greatest gains in productivity in the industry,” predicted Splude. “However, large-scale use of RFID will require standards resolutions.”

He added that education of RFID is the key to its understanding and gains in productivity. Toward that end, HK Systems has established an RFID application lab for its customers and partners.

Using a bit of that RFID technology, company vice president Mike Kotecki made a random, unscientific survey of the audience. In response to his questions, attendees pushed a button on a remote to select answers that were immediately displayed on a screen. Here are some results of that survey. Not all responses add up to 100 percent.

Kotecki: What mode do you view your company to be in at this time?
Response: Moderate growth – 55%, flat 21%, explosive growth 16%.

Kotecki: How has your company’s productivity changed since 2000?
Response: Up and doing more with fewer people 75%.

Kotecki: What are your personal roadblocks to success in your job?
Response: Supply of quality personnel 39%, lack of growth/improvement funding 29%, technology hurdles 26%.

Kotecki: What is the primary external threat that has impacted your company’s growth?
Response: Lack of faith in the U.S. economy and consumer confidence 33%, impact of off-shore influences 13%, terrorism and security concerns 7%, none of the above 47%.

Kotecki: What is your company’s current strategy for RFID?
Response: We will wait and see 32%, meet customer compliance demands ASAP 28%, self-imposed interest in applying the technology for its benefits 28%, what is RFID 13%. (Editor’s note: We said this was not scientific!)

: Where do you see your company investing for future growth or survival?
Response: In software systems 38%, added personnel 22%, in hard manufacturing assets 23%, in hard distribution assets 18%.

Kotecki: What has been the direction regarding inventory levels in your company?
Response: Decrease inventory wherever possible for cost reduction 34%, increasing net inventory for higher customer service levels 17%, a bit of both 32%, no changes 18%.

: In what direction is your company steering its logistics strategy?
Response: Consolidating and centralizing our distribution facilities 47%, decentralizing our distribution to serve customers with regional facilities 19%, we are relying more on outsourced distribution using 3PLs 4%, no changes 30%.

: What would you say your company’s number 1 focus is today?
Response: Increase market share 35%, cost reduction 34%, improve quality and customer value 24%, innovation 8%.