In September and October, I made what could be called the grand tour of materials handling. During that time, I attended the annual meetings of the Material Handling Industry of America, Conveyor Equipment Manufacturers Association and Industrial Truck Association. And just for good measure, I went to Frontline's Supply Chain Week, which covers automatic data capture, and the HK Systems Material Handling and Logistics Conference.

Everywhere, I asked how's business. The responses included: "We could use some more orders"; "Next year should be much better"; and "It's really started to pickup."

The conclusion I came to—demand is starting to re-build for materials handling equipment, systems and related software. To be kind, it's about time. Anecdotally, at least, it's clear that suppliers are starting to climb out of the hole they find themselves in. And it's quite a hole. The Modern Materials Handling Orders Index has dropped 36% since its peak in 2000.

Anecdotes are nice, but real numbers are better. That's where Jim Haughey's Outlook column enters the picture. On page 17, he sees increasing demand has already started for materials handling hardware and software. Better yet, he sees it carrying through 2005. Initial demand, Dr. Haughey says, will come from warehouses and distribution centers with manufacturing joining in as capacity utilization rates climb.

In addition to that report, the Product Innovators supplement that is polybagged with this issue has some detailed information on what you and your peers say you're looking to buy. Survey data covers conveyors, racks, industrial trucks and software. From what readers told us, the vast majority are planning to buy materials handling equipment and software during the next 18 months.

By the way, this issue also features two companies with an economic spin all their own. Our cover story (How McKesson pumps up distribution) is on McKesson's new pharmaceutical distribution center in Lakeland, Florida. That's the state where 1,000 people arrive daily, half of them seniors. Meanwhile, the typical senior in Florida takes seven medications a day. Sounds like nothing but upside for McKesson there.

Then there's Valkyrie in our Manufacturing Spotlight (Lean manufacturing cuts lead times 75%). At a time when the "experts" are saying U.S. manufacturers can't compete without abandoning the inner city if not the U.S. altogether, this leather goods manufacturer is thriving by ignoring both maxims.

As you will read, both companies are working their way to prosperity by making great use of materials handling. Perhaps more importantly, they have a head start on rivals that have delayed spending on new equipment and systems of late.