Top 20 systems suppliers, 2014

Let’s start our annual look at the Top 20 systems suppliers list by putting speculation to rest: Schaefer is No. 1 with $2.65 billion in revenues, a 3% gain over 2012. Daifuku has held second place with $2.46 billion, a 4% increase.

But the battle continues as Modern’s 17th-Annual Top 20 Systems Suppliers list becomes a heated race to the top, with half of the top 10 companies posting nearly 20% year-over-year growth.

While some of that growth is the result of mergers and acquisitions, such as Daifuku’s acquisition of Wynright, the results reflect two facts of life in the industry:
1. The big are getting bigger, as is the case in other industries, and even the small are getting bigger. In 2011, it took just $100 million to crack to the Top 20 list and $383 million to make the Top 10. This year, No. 20 (Savoye) posted $131 million in revenue while No. 10 (Knapp) posted $601 million.

2. And, there is an apparent appetite for automation, largely driven by e-fulfillment that just isn’t explained by industry consolidation.

For some perspective on the latter point, consider that in 2011, the combined revenues of the Top 20 jumped 26% in a single year, the equivalent of leaping over tall buildings in a single bound. It would have been easy to attribute those gains to a bounce back from the disastrous slump in 2010.

However, 2012 posted another 2% gain and the combined 2013 revenues for the leaders jumped another 6.5% over 2012. All told, the combined revenue of the Top 20 has increased by more than $4 billion since 2010, from $11.4 billion to $15.6 billion in 2013.

Top 20 worldwide materials handling systems suppliers

Let’s break the list down further
The top five system suppliers were up a combined 3.5% for 2013. The three-year average growth for each of the top five companies is about 27%. Meanwhile, No. 6 through No. 10 grew by a combined 30% last year and by more than 110% since 2010. Even the 17th and 18th place finishers are up more than 50% in four years.

Norm Saenz, managing director with the supply chain consultancy St. Onge Co., attributes the shared wealth to a dynamic market looking for the best combination of technologies to optimize their processes.

“Ever fewer of our clients are going directly to one supplier,” Saenz says. “Rather, they’re sending specifications out to bid for competitive pricing. This leads to more opportunities for a wider range of qualified suppliers, as indicated in this survey’s findings.”

The view from the top
Schaefer is No. 1 on this year’s list with $2.65 billion in revenues, a 3% gain. According to the company, its expects continuous growth in the market segments of food distribution and e-commerce fulfillment centers in the United States and worldwide, and projects a positive outlook for its systems integration business in the foreseeable future.

Daifuku held second place with $2.46 billion, a 4% increase in revenue after converting from yen to U.S. dollars. Masaki Hojo, president and CEO of Daifuku, says sales of systems for non-store retailing, such as e-commerce, increased in the commerical and retail industries. The figures also reflect Daifuku’s acquisition of Wynright Corp., which ranked 17th in last year’s list with a reported $216 million in revenue.

Dematic took the bronze with $1.5 billion, a 15% increase over 2012. “In 2013, the big story was the continued adoption of Multishuttle solutions,” says John Baysore, president and CEO of Dematic North America. “In addition, Dematic experienced pronounced growth in piece and case pick systems implemented with smart convey and sort networks, coupled with voice- or light-directed activities.” Software is another growing area for Dematic; at Modex, Baysore announced that Dematic had sold an estimated $90 million in software last year.

After several years of growth, Murata dipped 9% to $960 million, but held on to fourth place. According to a company statement, the dip was the result of a currency fluctuation—revenues increased year over year before conversion from yen to dollars.

Vanderlande moved up to one spot to fifth place, after adding 22% to come in with $956 million. “We expect increased sales in all our markets and especially in the U.S. in warehouse automation as well as baggage handling,” says Govert Hamers, Vanderlande’s president and CEO. “Our Atlanta headquarters serves as an excellent bridgehead to speed up that growth in the coming years, and we continue to invest in our U.S. organization.”

Swapping places with Vanderlande at No. 6, Mecalux again declined to submit updated revenues, so the 2011 revenues have again been carried over.
Seventh-place Beumer added $142 million, or 20%, according to Martin Mossinkoff, vice president of logistics systems for Beumer Group. “Trade volume is increasing, delivery times have to become shorter and shorter and the demands on logistics are rising,” he says. “From storage through picking, packing and sortation to the shipment to the customer, systems to meet these challenges are always in great demand.” Beumer’s reported revenues have increased more than threefold in the last four years. In early 2014, the sortation specialist acquired Dallas-based Glidepath, a designer, manufacturer, and integrator of airport baggage handling systems. Those revenues will be reflected in next year’s list.

Fives Group (Cinetic Sorting) broke into the Top 10 after growing 17% over last year. A company statement credited strong demand for its integrated singulation and sortation systems in the NAFTA, Japanese and European markets.

At No. 9, Swisslog added 4% to break the $700 million mark and noted improved order intake and net sales in North America, including a more than $25 million order from a food supplier. Reto Sidler, head of corporate communications for Swisslog, also pointed to an improvement of sales in the Asia Pacific region.

Knapp rounds out the Top 10 with $601 million, posting the second largest year-over-year percentage increase with 23%. The company started a separate subsidiary, YLOG Industry Solutions GMBH, from assets it purchased. The subsidiary’s shuttle system focuses on scalable solutions for medium-sized companies.

“Knapp continued to develop sales in new geographic areas, especially in the U.S. market,” says Jerry Johnson, marketing and business development manager. “Shifts from traditional fulfillment models are driving supply chain transformation as companies realize the value of automated material handling solutions. Vertical markets such as retail, fashion and food distribution also contributed strong increases this past year.”

Growth across the board
Despite just being knocked out of the top 10, Intelligrated grew by 11%, or $59 million, to hit $583 million and reach 11th place. The number represents 54% growth since 2010, and includes the acquisition of Knighted Software in 2012 and voice solution provider Datria in 2013. “Our growth can be attributed to increased sales of our core automated material handling solutions, as well as expansion of our domestic and international customer base,” says Chris Cole, CEO of Intelligrated. “Specifically, the growing challenges of e-commerce and omni-channel fulfillment are a major component of our success.”

Kardex slipped out of the top 10 for the first time in years, reporting revenues of $556 million, although the number is not an apples-to-apples comparison with the prior year. According to a recent financial announcement from the company, 2013 saw the completion of a restructuring process begun in 2011, as well as a strategic realignment. Despite the divestment of Kardex Stow as of July 31, 2013, the announcement explains, the group was able to exceed the previous year’s operating result.

TGW is in 13th place, having fluctuated between 12th and 13th place for five consecutive years. However, in a testament to the competitiveness of the list, the company’s revenues have increased 72% in that time.

Grenzebach (formerly reporting as KUKA Systems North America) reported the largest percentage growth on the Top 20 list, expanding 36% from $352 million to $477 million.

Following in 15th place, Witron tallied $340 million, a 13% improvement. Tied for 16th with $207 million is viastore, which posted 49% year-over-year growth. System Logistics did not supply 2013 revenues by press time, so its 2012 revenues of $207 million have been carried over.

Revenues for 17th-place finisher Dearborn Midwest (DMW) were virtually unchanged at $153 million. According to Michael Paisley, controller for DMW, the budgeted revenue for 2014 is $172 million following orders already in the pipeline.

“Current volumes and outlooks for automotive business remains very strong,” Paisley says. “We are also providing more turnkey package solutions to our existing customer base with the growth in our Tooling & Construction divisions and also Life Cycle Improvement.”

Elettric 80, in 18th place, declined to submit revenues this year, so 2012 figures of $147 million have been kept as a placeholder.

Savoye previously reported as its parent company Legris Industries. Last year, the Savoye/Retrotech materials handling revenues were broken out in order to harmonize the figures with the rest of the list. Last year’s $128 million in revenues were not sufficient to make the list, but Savoye now holds 19th place with $131 million.

Making the list
To qualify for Modern’s Top 20 list, companies must be suppliers of materials handling systems, not just equipment providers. In addition to manufacturing at least two major handling system components, a company must also employ full-time staff that designs, installs and integrates materials handling systems.
These systems include at least two of the following: transportation devices, storage and staging equipment, picking units, sortation systems, information management systems, data capture technologies and other types of handling equipment.

To be considered worldwide suppliers, companies must have a presence in North America and must also be able to report materials handling revenues to Modern. Lockheed Martin, for example, is a systems supplier with a North American presence, but isn’t included in our Top 20 list because they can’t single out the revenue that comes from materials handling contracts.