When one door closes, another door opens

I’m a glass is half-full kind of guy, which means that as I look at the economic devastation out there I’m trying to find the silver lining. I will admit, it’s not easy. Last Sunday, a friend of mine - a retired CFO - told me he’s going back to work because his retirement portfolio crashed and burned. Most of us can probably relate. And it’s not the first story like that I’ve heard. 

Two statistics, however, caught my eye this week and made me wonder whether the current climate might ultimately be good for the automated materials handling and supply chain software businesses - businesses that are really in the business of selling productivity. 

Last Monday, the U.S. Labor Department reported that productivity rose at an annual rate of 3.2% in the last quarter of 2008, double the increase in productivity in the third quarter; labor costs, meanwhile, increased at an annual rate of 1.8%. Now, I think we all know that’s a result of all of us doing more work with fewer colleagues, but whenever the rise in the productivity rate is greater than the increase in labor rates, that’s a win. 

The other stat was yesterday’s dismal employment numbers, which saw 598,000 jobs disappear in January, pushing the unemployment rate to 7.6%. 

So, where’s the silver lining for the materials handling and software business? I predict that some of those factory and distribution center jobs are gone forever. I really think the smart companies will look at their operations and ask themselves what tools they can implement to keep the joint running in an environment where head counts are shrinking and every operational dollar counts. The answer is supply chain execution software and technology solutions like WMS, labor management, yard management, slotting and voice recognition, and the targeted use of automation like pick-to-light, mini- and micro-load automated storage solutions, and automatic guided carts and vehicles. 

And the smartest companies will implement solutions that can scale. When business comes back, they’ll be able to keep hitting their numbers without adding to their head count. 

Let me know what’s going on in your operations and how your company is approaching the recession.