Innovation a key component in supply chain
If manufacturing is poised to have a big year in 2014, one of the biggest potential areas for growth is the material handling sector. The movement of materials from the front door to the back door—and the management of the supply chain on either side—is growing in importance as a way to manage costs and generate efficiency throughout the manufacturing process. As MHI prepares to stage the 2014 MODEX Show in Atlanta, George W. Prest, CEO of MHI, discussed the growth opportunities the challenges facing material handling with Plant Engineering.
2014 MODEX Show
When: March 17-20, 2014
Where: Georgia World Congress Center, Atlanta
Attending: There will be more than 800 exhibitors presenting products and solutions for material handling, supply chain and logistics, as well as packaging, warehouse and inventory management solutions.
Special Events: MHI, in conjunction with Deloitte, will release results of the 2014 MHI Annual Industry Report: Innovations That Drive Supply Chains, on March 19. The report looks at current issues facing the material handling industry today and into the future. There will be dozens of show floor seminars on a wide range of industry topics. The full report also will be available online March 19 at www.mhi.org
“I think the most overlooked part of our industry is its essential impact on industrial efficiency, cost control and on the U.S. and global economy. C-Suite executives have started to look at investments in material handling, logistics and supply chain solutions in that way, but we have a long way to go.”
As MHI prepares to stage the 2014 MODEX Show in Atlanta, George W. Prest, CEO of MHI, discussed the growth opportunities the challenges facing material handling with Plant Engineering.
Plant Engineering: MHI will announce the results of its industry survey it conducted in conjunction with Deloitte at MODEX this year. What are some of the key findings of the report, in your view?
Prest: No doubt, hiring, training and retention of manufacturing and supply chain workers is the most important issue facing this industry and the results of the report confirm that. This is a major challenge to innovation and we as an industry need to come together to develop and invest in comprehensive talent strategies to recruit, retain and train the best minds. The complete 2014 MHI Annual Industry Report: Innovations That Drive Supply Chains will be revealed on March 19 at the MODEX keynote. Copies of the report will also be available on March 19 at www.MHI.org.
PE: There is general optimism about manufacturing heading into 2014. Does that hold true for the supply chain as well? What are the positives as the year gets rolling?
Prest: U.S. business is now sitting on a $1.8 trillion cash reserve that can be used to:
- Increase efficiency, lower costs, and improve profitability of manufacturing and supply chain operations
- Add automation, visibility and sustainability solutions
As a result, material handling equipment new orders are forecasted to grow 8.5% or more in 2014 and 12.0 % in 2015, according to the latest Material Handling Equipment Manufacturing Forecast (MHEM) released by MHI.
We are optimistic about future investment and expect economic fundamentals to favorably support capital equipment investment through 2014 and 2015.
PE: Conversely, what do you see as some of the real challenges facing material handling, and manufacturing as a whole? What are your members looking for more help with?
Prest: Cost control is king with most companies today. However, an overarching focus on cost reduction can impede a firm’s competitiveness and ability to grow by preventing essential investments in the kinds of innovations that are critical to success.
Investments in automation, analytics, sustainability, visibility and mobility solutions among others are key to growth, performance and efficiency. Limiting their investment will have a negative impact on cost control in the long-term. Getting that message out and helping manufacturing and supply chain executives communicate this to the C-Suite is a key challenge.
PE: What are manufacturers looking for from their supply chain and logistics operation? How can MHI and MODEX help them achieve those goals?
Prest: Manufacturers are looking for cost control and efficiency. As I said before, investment in innovation is the key to that long-term. Projects like the 2014 MHI Annual Industry Report and the U.S. Material Handling & Logistics Roadmap help get the word out on this and other key industry priorities.
The innovative equipment and systems on display at MODEX 2014 and the thought leadership provided at the MODEX Supply Chain Conference will go a long way in helping manufacturers achieve their goals both in the short- and long-term.
PE: Manufacturers talk about optimization all the time. The supply chain, both inside and outside the plant, can get overlooked. What are some keys from MHI’s view to helping improve supply chain efficiency and effectiveness?
Prest: Again, it goes back to innovation. However, to implement and capitalize on supply chain innovations, firms need talent with the right skillsets. Unfortunately, the right kind of supply chain talent is very difficult to come by these days. Education, certification and training on all levels from high-school, community college and under-graduate/ post-graduate at the collegiate level are necessary to build and retain the next generation of manufacturing and supply chain worker. MHI’s College Industry Council on Material Handling Education, Technical Career Education Program and Material Handling Education Foundation are just some of the tools we are using to address this critical industry priority. We are also working with other sister organizations to develop programs for Young Professionals entering our industry to engage them in this exciting and vibrant industry.
PE: What’s the most overlooked part of material handling, in your view? How can it get more attention?
Prest: I think the most overlooked part of our industry is its essential impact on industrial efficiency, cost control and on the U.S. and global economy. C-Suite executives have started to look at investments in material handling, logistics and supply chain solutions in that way, but we have a long way to go. One of the reasons we rebranded MHI in 2013 was to start the process to get that message out. The U.S. Material Handling & Logistics Roadmap and the MHI 2014 Annual Industry Report are a continuation of that process.
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Annual Salary Survey
After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.
The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.