When it comes to survival, cost containment and continuous improvement matter most to materials handling professionals in the industrial machinery business.

That’s according to Modern readers who work in industrial machinery and responded to a recent e-mail survey asking them to identify the practices, issues and metrics important to their operations.

Readers also shared these insights into the industrial machinery market:

• 71% expect company sales to increase in 2007.
• 69% expect manufacturing activities in their facilities to increase in the next two years.
• 46% expect warehousing and distribution activities in their facilities to increase in the next two years.

When asked to rate the importance of general issues facing their industry, readers in the industrial equipment market overwhelmingly identified cost containment as a “very important” issue.

Paul Mengnjoh of Martin Engineering, who filled out a survey for Modern, cited the high cost of energy and of raw materials as particular concerns for his company’s operations. Martin Engineering, based in Illinois, makes bulk handling equipment.

Makers of packaging equipment are also concerned about raw material costs, particularly the cost of steel, says Matt Croson of the Packaging Machinery Manufacturers Institute (PMMI).

“What we’re hearing,” says Croson, “is that steel costs more, and it’s getting harder to find.”

Other issues rated of high importance by at least half of those surveyed:

• Ergonomics and safety
• Company growth
• Throughput
• Labor availability
• Training

Ron Giuntini, a strategy consultant to machinery manufacturers, says ergonomics and safety are key issues for a number of reasons. Besides being concerned for their workers’ welfare, he says, machinery manufacturers need to care about safety because poor safety leads to lost productivity, expensive workers’ compensation claims and high insurance costs.

The availability of well-trained labor is becoming a concern in many machinery markets, including the materials handling machinery market. The Material Handling Industry of America recently held a summit to discuss the industry’s main priorities, and workforce/labor issues came out near the top of the list.

With so many survey respondents predicting growth in manufacturing and warehousing, buying plans for additional materials handling equipment should follow. And in fact, 57% of respondents said they expect spending on materials handling equipment for their operations to increase in the next one to three years.

Basic equipment such as lift trucks, bar code scanners, and rack and shelving are the most popular items on readers’ shopping lists for the coming years. Sophisticated automated equipment, such as automatic guided vehicles (AGVs) and automated storage systems, are much less popular, though a small percentage of readers indicated plans to buy these items (see the table).

Buying plans in the industrial machinery industry mirror those in other industries quite closely. The one industry we’ve surveyed that doesn’t match this pattern is the electronics industry, where software and radio frequency identification (RFID) technology ranked high on reader shopping lists.

Whether in warehouses or in manufacturing facilities, continuous improvement topped the list of practices that are most important for the industrial machinery market.

Giuntini is not surprised to see continuous improvement rate so highly. “What we’re really talking about is productivity,” says Giuntini. “Whether you call it total quality management, continuous improvement or lean, it’s all about productivity.” And productivity, he says, has always been and will always be a key issue for equipment manufacturers.

Readers also ranked lean inventories and lean manufacturing as important practices. Croson, of PMMI, says manufacturers in his market have definitely embraced the lean philosophy. “Our members have rallied around (lean initiatives),” he says, “to make sure they’re operating efficiently.”

When it comes to metrics, more than three quarters of respondents rated the following as measurements that are “very important” to their current operations:

• Shipping accuracy
• On-time shipping
• Inventory accuracy

As the table on the left shows, these priorities within the industrial machinery business are right in line with priorities in industry in general.