Thoughts coming off the road

By Gary Forger, Editorial Director -- Modern Materials Handling, 6/1/2006

Spring is always a heavy travel season for me. And, this year was no different. What's so interesting is what I pick up along the way and how that contrasts or correlates with other things I hear and read.

One of my stops was at Blum, which makes kitchen cabinet hardware in North Carolina. Now Blum is an Austrian-based company. But it manufactures as much as it can as close to its end markets as possible. Business in the United States is good, so Blum made some upgrades to its plant here to expand capacity. As you can see (Blum remodels), manufacturing does have a future in this country.

In fact, productivity in the manufacturing sector went up 3.8 % in the first quarter. That's a nice gain that is part of what has become a long-term trend.

Unless, of course, you're a U.S. automaker. Or so it seems. According to Harbour Consulting, which assesses productivity at auto plants, the two most productive plants of U.S. automakers are Ford's in Atlanta and GM's in Ontario. Unfortunately, both are slated to close in the near future.

The companies say the decisions are based on much more than just productivity. Other factors include model mix, investment needed in the future and overall capacity. I hear that and think to myself something is counterintuitive, if not self defeating, here. After all, both Nissan and Toyota already build cars in fewer hours at their plants here than the average for U.S. automakers.

On another trip I visited the SAP event SAPPHIRE. A panel discussion on RFID included Dave Asiala of Dow Chemical.

Now Dave is interesting for two reasons. He's not one of you. He's from IT. And Dow is not faced with any RFID mandates from retailers. But the company is moving ahead with 50 RFID projects to improve the security and safety of its supply chain. Take a look at 60 seconds to see how Dow is doing it and why Asiala and others think the value of RFID outweighs the costs that fixate so many in the retail supply chain.

By the way, one European retailer with its own RFID mandate is the Dutch bookseller Selexyz. As you can see in the Warehousing/Distribution feature, The book on item-level tagging, this is completely an internal project. No book publishers are involved. And the initial returns, says Selexyz, far outweigh the cost. The takeaway—it's all about changing processes. If you don't, you won't see the benefits. And that applies to much more than just RFID. Maybe someone should tell GM and Ford, too.