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
Packsize International selects Utah for global headquarters
Panjiva reports strong December and full-year 2016 U.S.-bound import levels
POLA and POLB see strong 2016 volumes over all
Using AGVs at Ledvance
More News

Latest Resource

Mobile Solutions: Improving Supply Chain Efficiencies
To meet customer's ever-increasing service expectations and improve their business efficiency, companies are looking to their supply chain operations – especially material handling and warehouse operations managers.
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
Mobile Solutions: Improving Supply Chain Efficiencies
To meet customer's ever-increasing service expectations and improve their business efficiency, companies are looking to their supply chain operations – especially material handling and warehouse operations managers.
Download Today!
From the January 2017 Issue
The lighting manufacturer reaped savings by reducing maintenance costs and product damage, and using labor more productively. The bottom line: A two-year ROI.
Double Up on Labor Efficiencies
7 Warehouse E-commerce Best Practices for 2017
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2016 Warehouse/DC Operations Webcast: Confronting omni-channel complexity
During this webcast we’ll examine the current activities, trends, and best practices in warehouse and DC operations management and how companies plan to address complex issues associate with omni-channel fulfillment.
Register Today!
EDITORS' PICKS
System Report: Sustainable Distribution at REI
Specialty outdoor retailer REI’s new distribution center brings together the next generation of...
System Report: Whirpool puts mobile robots to work
In Whirlpool Corp.’s Clyde, Ohio, factory, mobile robots have automated the delivery of parts to...

Modern Materials Handling’s 2017 Casebook Collection
The 2017 Casebook features more than 35 case studies that put the spotlight on successful innovation...
Brownells: Designing for Efficiency and Growth
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order...