More Good News Than Bad

Feb. 1, 2001
The numbers from the holiday shopping season are rolling in. Here's a preliminary analysis.

More Good News Than Bad

At this writing (early January) numbers from the recent holiday season are still coming in, or being withheld, depending on your point of view. ActivMedia Research says, as projected earlier in the year, consumers increased on-line shopping by the projected 46 percent. Reuters reported in late December that on-line holiday spending touched $8.7 billion. This number is in line with ActivMedia’s anticipated total on-line sales of $56 billion for 2000.

A National Retail Federation/Forrester Research Inc. survey shows that November on-line sales exceeded the total for November and December 1999.

Kmart said sales at its site soared 1,000 percent compared with last year’s holiday season for Yahoo Shopping said its holiday order volume nearly doubled in the U.S. as revenues rose 85 percent over last year.

So does this mean the supply chain is strengthening its links? Don’t be too quick to pass judgment, says Vinod Singhal, associate professor of operations management, Georgia Institute of Technology. He recently completed a study of 861 companies, including some that suffered highly publicized supply chain glitches between 1989 and 1998.

"Much evidence [for payoff] is anecdotal," said Singhal. Looking at the data, it appears that if you make a supply-chain error you’d better prepare to take some hits on Wall Street. According to the study, any supply-chain glitch caused the company’s stock to tumble nine percent when the problem was announced — and in over six months, caused it to fall 20 percent.

Only a few lucky companies can prove that they have achieved any real payoffs from their supply chain management efforts, said Robert Austin, assistant professor, Harvard Business School. With so much money and time at stake, these implementations create a return-on-investment crisis, he added. "Rarely have general managers been asked to make such important high-stakes choices with so little analytical backup," he said.

MHM Part of History

Material Handling Management (MHM)

has been invited to the first official USA Pavilion, organized in cooperation with the Material Handling Industry of America and the U.S. Department of Commerce, at Manutention 2001. This event is the 26th international Materials Handling Exhibition & Conference. It will be held March 13-16 in Paris, France.

John Nofsinger, president, Material Handling Industry of America, will discuss the differences in standards between the US and Europe, and the cooperative efforts being made to create international standards. Representing the Material Handling Equipment Dealers Association will be Gary Moore, president, Materials Handling Equipment Company. Moore will discuss the changing role of distributors in America.


’s publisher, John Davis, will discuss the size of the material handling market in the US and the critical role of the trade press in material handling education.

"It’s an honor to be able to take the message we have long advocated in our magazines here in America to Europe," says Davis. "This is the largest European trade show this year for our industry and the American pavilion is located in the heart of the show."

WERC’s Work on Work

What’s on everyone’s wish list this year? Finding and retaining dependable, entry-level warehouse employees seems to be the hot item, according to a survey of the Warehousing Education and Research Council (WERC).

The survey of members sought answers to questions such as what recruitment activities are being used, which ones work best and what happens when WERC members’ firms are unable to find the personnel they need. Results of the survey are published in Are You Finding the Right Warehouse Employees?

This WERCwatch Report can be ordered by contacting the WERC office at 630-990-0001, or [email protected]. Cost is $15 for non-members.

HK Systems, Rensselaer Announce Partnership

HK Systems and Rensselaer Polytechnic Institute, announced a partnership to develop new technology for the material handling industry. This joint effort is a collaboration of academic and industry experts working in tandem to develop Internet-based multimedia tools for concepting complex, integrated material handling systems.

The scope of the project will span the interface of manufacturing and distribution, and deal with the engineering design of systems composed of accumulation conveyors, palletizers and unit load storage and retrieval systems.

GATX Logistics Sold

Oak Hill Capital Partners, LP, a private equity investment group, and the Stephens Group Inc. announced they have signed a definitive agreement to sell Jacksonville, Florida-based GATX Logistics Inc., to APL Logistics Inc. APL Logistics is a wholly owned subsidiary of Singapore-based Neptune Orient Lines (NOL), a global company involved in transportation and logistics businesses. GATX Logistics is a value-added warehousing services and freight management company.

Scholarship Awarded

Joseph D. King, Auburn, Alabama, has been awarded the Material Handling Management Magazine Honor Scholarship. This scholarship is given annually through the Material Handling Education Foundation. King has finished an internship at International Paper Company and returned to school at Auburn. He was sponsored by Dr. Joe Hanna, professor of logistics, marketing and transportation at Auburn.

Companies Making News

Vertex Interactive has purchased Applied Tactical Systems (ATS), a provider of connectivity software for SAP installations worldwide, in a transaction valued at approximately $26 million, paid for through the issuance of 3.0 million shares of Vertex common stock.

National Distribution Centers (NDC) has acquired the manufacturing support and dedicated operations division of Burnham, a third-party logistics provider. The acquisition adds 11 facilities nationwide to NDC’s operations.

NACCO Industries Inc. has decided to phase out its Danville, Illinois, lift truck assembly operations. The plant employs approximately 680 people and is expected to be phased out over a 12- to 18-month period.

Century Simplimatic Inc. has purchased certain assets from Crown Simplimatic Inc.

Intermec Technologies Corp. has formed an alliance with MIKOH Corp. to incorporate MIKOH’s Smart&Secure security technology into an array of pressure-sensitive Intermec data collection media.

SyVox Corp. and OMI International have announced that OMI will offer the SyVox Solutions suite of speech-based software in OMI’s Triceps warehouse management system.

WMS Shipments To Increase

According to the ARC Advisory Group’s Warehouse Management Systems Worldwide Outlook study, shipments of WMS software and services, which exceeded $840 million in 2000, will double to more than $1.6 billion by the end of 2005. WMS’s compound annual growth rate is expected to be 14.6 percent for the forecast period, says Steve Banker, the study’s author.

HK Systems, Beumer in Marketing Alliance

HK Systems Inc. and Beumer Corporation, manufacturer of tilt tray sortation systems, have announced a marketing alliance combining product lines to expand their offering of material handling products and services.

Mike Kotecki, HK Systems senior vice president, sales, says, "This partnership represents our commitment to deliver best-fit end-to-end solutions to our customers."

Kotecki adds, the company is excited to expand its sortation systems product offerings and looks forward to supporting Beumer solutions with HK products including conveyors, palletizers, automated guided vehicles, storage/retrieval machines and supply chain software."

Help for Santa

Gains in a United States Postal Service Handwritten Improvement Program (HIP) are most noticeable during the holiday mailing season. At a time when Americans were expected to mail more than 20 billion mail pieces — a large percentage to Santa Claus, we assume — address recognition equipment from Lockheed Martin Systems Integration — Oswego helped put letters into processing and distribution streams faster.

Advancements completed this past year in handwritten address recognition boosted successful accuracy read rates of first-pass, hand-addressed envelopes to 75 percent this holiday season, compared with 63 percent in 1999. This is a dramatic gain over the three percent accuracy read rate that existed four years ago — which might, in part, explain why that pony you’ve been asking for all these years never made it!

PMMI Leaders Take Office

Officers representing the Packaging Machinery Manufacturers Institute (PMMI), led by Chairman Bernard M. McPheely, CEO, Hartness International, have taken office. Joining McPheely will be Vice Chairman Mel Bahr, CEO, MGS Machine Corporation; Past Chairman Robert S. Potdevin, president, Potdevin Machine Co.; and President Charles D. Yuska, PMMI.

Managers on the Move

Jeff Siemers has been named vice president — finance of Menasha Material Handling Corp.

Richards-Wilcox Inc. has appointed Leticia DeLaFuente distribution manager, conveyor systems. She will be responsible for sales and distribution in North America.

Drexel Industries LLC has appointed Tom Berger PCMH, regional manager, responsible for dealer activity in the central region.

FMC Corp. has elected William G. Walter executive vice president and a member of the company’s board of directors. He will be responsible for the company’s chemical businesses.

Robert Rienecke has been named to serve as vice president, marketing, at Diamond Phoenix. He will oversee the company’s marketing and public relations efforts.

At Marq Packaging Systems, Jacob Schaffer has been appointed vice president, manufacturing, and G.W. Walker, engineering manager.

Paxar Honored

Paxar Corp., through its subsidiary Monarch Marking Systems, has been named one of the 10 best plants in the country by Industry Week magazine.

The award salutes companies that excel at sensible use of technologies, simultaneous engineering, flexible equipment and people, extensive employee training, and partnerships with customers and suppliers.

Recently, the company’s Miamisburg, Ohio, facility was successful in reducing the amount of raw material while increasing the variety of products. Paxar provides value-added identification and tracking solutions to retailers, apparel manufacturers and other markets.

Special Supplier Symposium

The Boeing Company and Airbus Industrie have announced that they will host global commercial aviation supplier symposiums at Frontline Solutions Expos in Amsterdam, Holland, in October, and in Chicago in November.

The symposiums will allow the two companies to share their progress and vision for permanent bar code identification with aviation suppliers, third-party maintenance providers and military logistics interests. The aviation giants lead the way in promoting the collaboration for dealing with new business challenges that are met in open environments and B2B relationships where information is shared globally.