This year should be a good one for revenues of companies in the computers and electronics industry. So, the challenge for materials handling managers is to do their part to get as much of that revenue to the bottom line through improved operational efficiencies.

To make that happen, they are not only planning to increase spending on materials handling equipment and related information systems but to shake up spending priorities. That's the top line takeaway from Modern's recent survey of materials handling managers in the computers and electronics industry.

The e-mail survey also asked managers to identify the leading practices, metrics and issues in their manufacturing, warehousing and distribution operations. And like much of the rest of industry in general, they are striving for continuous improvement, better customer service and keeping a lid on costs.

Clearly, their business expectations are high. Survey results show that:

• Three quarters of respondents expect company sales to increase in 2007
• Average expected company growth is 11%
• Almost 60% expect activity levels to increase in manufacturing, warehousing supporting manufacturing, and in standalone DCs and warehouses.

To support that growth and increased activity, 58% expect spending on materials handling equipment and related information systems to increase in the next one to three years.

And as the chart on page 51 shows, what they have been buying in the past is not necessarily going to have the same priority going forward. For instance, printers have been at the top of the list but are falling off to the seventh spot in the future. Similarly, bar code scanners are dropping from the second spot to the sixth. Other notable losers here are totes and lift trucks.

On the other hand, there are several winners. Software for warehousing, wireless terminals, planning software and RFID are all making significant jumps up on shopping lists to occupy the top four spots going forward. Automated storage is also moving strongly up the list from the 15th spot to tenth.

As the chart shows, related information systems have been in demand for some time. But that is going to become even more pronounced. When asked which capital expenditures—materials handling equipment or information systems—will be more important in accomplishing their goals during the next few years, 75% said information systems.

We also asked managers to rate the importance of various practices from continuous improvement to postponement. Their responses are broken out by manufacturing and warehousing/distribution activities on page 52.

Top practices in manufacturing are continuous improvement, lean manufacturing and build to order. All three were rated very important by more than 50% of respondents. In fact, continuous improvement was tops at 78%.

The other seven practices on the list were said to be very important by less than 40%, with postponement at the bottom with just 17%.

Leaders on the warehousing/distribution side are continuous improvement (79%), lean inventories (66%), workload planning (64%), same-day order shipping (63%) and value-added services (61%). All others were under 50% with postponement, once again, coming in last at just 12%.

When the survey got to key issues, cost containment (79%) was at the top of the list, just as we reported in January (www.mmh.com/article/CA6403389.html) for industry in general. Rounding out the top five for computers and electronics are: throughput and company growth (73%), ergonomics/safety (63%) and training (60%).

In comparison to general industry, there are some shifts in those top five. For instance, throughput moved up two spots as did company growth for computers and electronics. Meanwhile, ergonomics and safety slipped one spot while training fell three. Beyond that, rankings of issues in computers and electronics are much the same as general industry.

Leading the list of key metrics is shipping accuracy (91%), scoring the highest percentage of all metrics, issues and practices covered by the survey. In fact, the top four metrics—on-time shipping (89%), inventory accuracy and picking accuracy (80%) —all scored higher than the most important issues and practices. And only one metric, activity-based costing (43%), was below 50%, a notable difference from the other lists.

And within metrics, three are significantly different than industry in general. Inventory levels moved up in computers and electronics to the fifth spot from seventh in general industry. Order cycle times similarly climbed to sixth compared to ninth in general industry. Meanwhile the importance of on-the-job injuries dropped five spots to tenth in computers and electronics.

September issue: Industrial machinery buying trends, practices, issues and metrics