Wait 'til next year. That is the annual cry of sports fans everywhere, but it also can be heard this year from materials handling manufacturers and their equipment users. In some ways, 2001 was a year that many wish to forget because projects were postponed or cancelled altogether as the economic slowdown affected those who manufacture and distribute the nation's goods.

Materials handling sales were off significantly. The Modern Materials Handling orders index put the decline at more than 20% for the year. Hit especially hard were lift truck and conveyor suppliers. However, there was no segment of the materials handling industry that did not suffer. And while the slowdown affected the rate of new product introductions, there were many notable debuts in 2001 (see 2001 Product Review Showcase ).

Consolidation was on the radar screen among equipment producers. Chief among these was the Siemens acquisition of Mannesmann Dematic including its Rapistan Systems and Demag Cranes and Components business units to form Siemens Dematic. This consolidation created the world's largest materials handling systems supplier.

Meanwhile, large systems integrators now promote their one-stop shopping capability, offering customers a wide range of materials handling products under one flagship brand. Many smaller firms are also building alliances, especially with warehouse management system suppliers, so that they can better compete with bigger companies while ensuring easier integration for customers.

Clearly, it was a buyers market this year. Materials handling vendors found that in addition to supplying products, customers want them to act as consultants on projects.

"Customers are expecting consulting services without paying for it," says Jim Apple of The Progress Group in Marrietta, Ga. "They can get away with that in this kind of market."

Apple says that buyers are also asking for and getting better performance guarantees, warranties, and maintenance packages from vendors than in past years, as suppliers are willing to deal in order to write new business.

With a slowdown in manufacturing and warehousing, some manufacturers directed their efforts at potential customers in other industries, such as airlines needing baggage handling systems. While the airlines themselves have seen their own troubles since the terrorist attacks this Fall, vendors of baggage systems say that they see this as an opportunity to introduce systems that incorporate more security devices, such as conveyors that pass through X-ray equipment. One manufacturer noted that airports may see a need now to increase their automated handling systems to minimize opportunities for human interaction with baggage.

Even though 2001 was a down year overall for materials handling suppliers, there were significant advancements, particularly as they related to the functionality of products. Many suppliers gave high development priority to new software and controls that assure smooth integration of their products with surrounding equipment. Conveyor manufacturers concentrated on quieter, faster units as well as plug-and-play and modular technologies.

Equipment manufacturers also developed products in response to the supply chain demands for greater throughput, and the shipment of smaller quantities more often. Systems for piece picking, such as pick-to-light and voice recognition equipment, received attention from suppliers too.

Many equipment suppliers report that while sales have slowed this year they are continuing to quote on a wide number of jobs. Apparently the need for new equipment is there, but companies are a little shy to pull the trigger on new projects.

"There is room for return on investment though for companies that have foresight," notes Tony Gerace, the partner in charge of integration dimensions at Tompkins Associates of Raleigh, N.C.

Most suppliers hope that by the middle of next year, customers will have the needed capital to move on their planned projects. They also feel that the time their clients have spent waiting will allow the customers to be better prepared to act decisively and correctly.