It's all about productivity

By Gary R. Forger, Editorial Director -- Modern Materials Handling, 1/1/2001

As we start the new year, there's one word we all need to keep in mind - productivity. For some time now, Alan Greenspan has said that productivity increases have kept the economy healthy. And given the current situation, it seems that continued increases will be just as important.

To give you a reference point, the year 2000 closed with a 6.4% increase in industrial productivity, says our economist, Daryl Delano. In 1999 that number was 6.3% and the year before it was 6.2%. Not only is such a run impressive, but the projected 2000 number is the strongest yearly gain since 1971.

Here are two other points of comparison. The average annual gain for all of the '90s was 4.1%. And for the '80s, it was just 2.6%.

As the economy adjusts, Daryl expects productivity growth to slow a bit. But his number for 2001 is 4.4%, which is still strong and better than what we had for the healthy economy of the '90s.

Daryl attributes such continued strength to structural changes in the economy. He says the key is long-term capital investment that has permanently improved industrial efficiencies. Sounds like materials handling to me.

As our cover story proclaims, next month's ProMat 2001 material handling show and educational conference is all about productivity for the new millennium. (I'm assuming that this year, unlike last, we all agree that the new millennium has officially started.) Take a look at our preview of many of the products that will be on display at Chicago's McCormick Place, Feb. 12-15.

By the way, the people at the show's sponsor, Material Handling Industry of America, clearly understood the link between materials handling and productivity back in 1985. That's when they coined the show's name, which stands for "productivity solutions through material handling." Clearly, they knew the 2.6% gains of the '80s were unacceptable.

To get an idea of the power of some of the equipment and systems that will be at ProMat, take a look at the Warehouse of the Month. JCPenney put together a powerful combination of materials handling equipment in a brand new distribution center. The result is a 40% reduction in cost-per-item handling compared to the facilities it replaced.

Elsewhere, the Manufacturing Spotlight covers the use of towline systems to maximize production efficiencies for Humvee engines. Then the report on automatic guided vehicles details what they can do differently for you today. The power of automatic data capture systems is featured in the ADC News & Solutions section that now appears in all issues of MMH. There's also a first-ever report on application service providers and how they can complement your IT resources. In a word, it's all about productivity.