The other day I saw some productivity numbers for the final quarter of 2005. The headline was not impressive — "Productivity Fell 0.6% During Fourth Quarter."

As it turns out, that was the number for all U.S. productivity. The one of greater interest to us is manufacturing productivity. And that number was much better. Productivity in that sector increased 3.9% at the end of 2005. Better yet, it was up 4.8% for the entire year, which was much higher than overall productivity gains.

And while this is the smallest increase since 2001, nearly a 5% productivity increase speaks volumes about industry's successful drive for improved efficiencies. And that's exactly what our 16th annual Productivity Awards celebrates.

As you can see in the story (Productivity Award winners), the winners are: Thomas Built Buses for manufacturing, Kirkland's for warehousing and Ann Taylor for distribution. Modern congratulates them all. The competition is tough, and our Editorial Advisory Board works very hard to determine the winners. It's also quite interesting to see how these three companies went about improving their materials handling operations.

To build its latest model of yellow school bus, Thomas Built went with automation. That included one oversized automatic guided vehicle, overhead cranes and robotic work cells. "This is the very first time we have used an AGV," says manufacturing engineer Anthony Goff. "The fact that it automates a process that is still done manually in our other plant has been a big plus. We don't have to tie up an operator's time or build extra time into the operation to move the bus body between operations. "

Kirkland's made its gains with two strategic moves. One was to consolidate three manual warehouses into one mechanized facility. The second was to install conveyors, sortation and stand-up reach trucks along with a warehouse management system. As Todd Weier, vice president of logistics, notes, throughput by shift is up 40%. Meanwhile, the cost of handling inventory dropped 14% overall and 30% in one outstanding week.

Over at Ann Taylor, productivity increases were incremental over some years. Key components were four new sortation systems, more conveyor, a warehouse management system and a warehouse control system. Senior vice president of logistics John Singleton explains that the average time from arrival of goods to store delivery has dropped from 21 days to just seven. The retailer now ships 68% more units at the same cost as before the productivity upgrades.

There you have it. Productivity at its best. Clearly, these three companies have a seat on the productivity train.