Industrial America makes a comeback

Companies are once again investing in manufacturing and warehousing. That’s a good thing for our industry.

Latest News

State of Logistics 2016: Pursue mutual benefit
UPS Airlines pilots close deal on new contract with Independent Pilots Association
B2B Sellers Prefer a Unified Approach for Ecommerce
Q2 TIA benchmarking report shows mixed annual results
EY and UN Collaborate on Climate Change and Supply Chain Study
More News

Latest Resource

B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
All Resources
By ·

I grew up outside of Youngstown, Ohio, in what is affectionately – or disparagingly – referred to as the Rust Belt. For years, communities like Youngstown were given up for dead because they were industrial cities where people got their hands dirty making and moving things at work. Industrial America was old school. The future was in financial services and, of course, the Internet. No business in its right mind wanted to own infrastructure and assets when it could put its time and money into all things digital.

This may be anecdotal, but it seems as if that’s about to change. I’m not just talking about the re-shoring of some manufacturing, which appears to be real, or the fact that one of the most sophisticated distributors in the world is Amazon, the epitome of a digital company. Rather, just this week, I noticed two data points in stories in the Wall Street Journal.

One was last Wednesday’s edition that Groupon is planning a network of warehouses in North America for the physical distribution of goods. The company that became a household name pushing discount coupons wants to “rely less on its original model of emailed daily coupons for local merchants” and more on shipping products. Today, that distribution is handled by a 3PL, but Groupon wants its own physical network of facilities to improve its margins, the WSJ reports.

In another article, I learned that General Electric is planning to spin off part of its financial services division. Before the financial crisis, GE Capital was viewed as a model for other big industrial companies to move away from manufacturing and into other more profitable areas. Today, CEO Jeffrey Immelt would like “earnings from the industrial businesses to account for 65% of the company’s earnings by 2015, up from 55%,” according to the WSJ.

Here was the most interesting stat: Since 2011, when Immelt became CEO, GE’s stock is down 40%. During the same period, Honeywell and United Technologies shares were up 125% and 200% respectively – two big industrial conglomerates that kept to their knitting rather than venture into banking and entertainment.

When major companies like GE – and emerging companies like Groupon – focus their efforts on manufacturing and physical distribution rather than making their money from moving money or digital distribution, that’s a good thing for our industry.


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

Amazon · Economy · · All Topics
Latest Whitepaper
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
5 Emerging Technologies Enabling Competitive Advantage for Distribution
Come hear about the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids that are enabling competitive advantage for distribution.
Register Today!
EDITORS' PICKS
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...
Destination Maternity: Destination Automation
Running short of space in its old facility, Destination Maternity Corp. built a new, highly...

Hibbett Sports: Faster, Flexible and Efficient
A high-speed conveyor and sortation system at Hibbett Sports’ Alabama distribution center speeds...
Necessity is the mother of invention at Quiet Logistics
Faced with the loss of a robotic pick solution, Quiet Logistics invented its own robots. Are they...