President Obama was in Cleveland this week for a small-business summit. With all the reports in the national news about labor unrest and the debate over collective bargaining, it was interesting to hear that many of the employers participating in the Summit were more worried about just finding good workers, let alone what they were going to pay them.

Several attendees complained that they needed a better pool of talent from which to hire. But President Obama noted that some regions of the country are benefiting from business/education partnerships that match skills to the opportunities in their region. Cleveland is—or at least it once was—known as a steel-making, thing-manufacturing town. Yet an employer from a Cleveland-based steel processor countered that the area’s students don’t pursue manufacturing and trades any more. He’s worried because the age of his average employee is 50, and he’s facing mass retirements and a sparsely-stocked talent pool from which to draw.

MH&L has a rich talent pool to draw from when questions about manufacturing and logistics arise: our editorial advisory board. Several members have worked both in academia and in the corporate world, so I figured they’d have some insights about the state of tomorrow’s labor force—and how well academic institutions are preparing their students to enter it. Tan Miller, who was once a logistics pro at Pfizer, is now a professor of logistics. He’s actually director of the Global Supply Chain Management Program at the Rider University College of Business Administration. This MH&L advisory board member sees a good approach to this problem in—advisory boards.

“Moving over to academia in the last 2.5 years after many years in the corporate world, I now have a better appreciation of the importance of external advisory boards to university supply chain programs,” he told me. “These advisory boards can provide an important perspective to full-time academics on the skill sets and capabilities that are most useful for their graduates to develop in order for them to best make contributions to the private sector once they graduate. Perhaps there are opportunities to make these partnerships more prevalent and stronger in the future.”

“Stronger” is the key word here, because there is a need for stronger, more real-world state-of-the-art information—not only among business students, but among today’s logistics professionals. Logistics encompasses all businesses and many technologies, and both are constantly evolving. Education doesn’t end upon graduation. At least it shouldn’t. But another of MH&L’s Advisory Board members feels that some of the systems integrators helping clients apply technology today could use a refresher course. Automatic Data Collection is a perfect example. Radio Frequency Identification (RFID) is hot and getting all the attention, at the expense of basic bar code knowledge, according to IDAT Technology’s Bert Moore. That can result in poor system implementations and poorly applied technology. Something as simple as a label can bring supply chain flow to a trickle.

“Things are getting a little crazy in AIDC labeling,” Bert said to me. “I have heard that bar code label and RFID tag placement, once firmly fixed by EAN/UPC [now GS1] and ANSI standards [lower right-hand corner of the long side] is now getting chaotic per customer requirements. They want the label on the front or top or higher up or somewhere else. This is probably because of their automated conveyor/sortation design requirements. But is that because systems integrators are unaware of existing standards and practices or is there some other reason? Maybe that’s where the real lack of qualified talent lies—with systems designers and integrators who came into the field after the development of all the bar code standards and who don’t understand the struggles we went through to get things standardized. I have often said in presentations, ‘Standards are bad! Standard is good.’”

Our March issue will include the results from our annual salary survey. On a cursory glance, it doesn’t look like the numbers have changed much from last year. But, just as things as seemingly simple as bar code labels can mean life or death to system productivity, I think it’s time to take as deep a look at how talent can be developed and maintained as how it can be found and paid.

Last year I posted a blog about safety—or the lack of it—in the workplace. It still draws responses from you bloggers out there. I noted a Kimberly-Clark survey of safety professionals in which 98 percent of respondents answered “yes” when asked if they had observed workers not wearing safety equipment when they should have been. Thirty percent of these respondents said this had happened on numerous occasions. The top workplace safety issue noted by all survey respondents was “worker compliance with personal protective equipment (PPE) protocols.”

David Waldeck responded to my post that he’s been a tradesman for 35 years, and he’s not surprised by this lack of a safety mindset among employees. He says safety is a learned system for most workers—and has been for him, as well. Sometimes it takes tough love from the company brass to send the safety message home.

“As I progressed through the various phases over the years, I’ve had to accept change as it is ‘forced’ on today’s workforce,” he wrote. “It’s proven, though, that with positive training and some occasional negative feedback to those not willing to conform, eventually the crew will turn to wearing that gear instinctively. [Now] as a business owner paying workman’s comp bills, it became increasingly clear that we had to start conforming. Most of today’s businesses play it smart by ‘building in’ time for safety in their bids for work. Most customers don’t mind the extra expense as long as it improves workplace safety and decreases other overhead costs like insurance bills.”

Safety statistics are a dramatic way to get people’s attention. That’s why sellers of safety equipment and devices frequently resort to quoting numbers to help potential customers understand the connection between the use of their equipment and the return on investment.

For example, a recent press release from Kardex Remstar, makers of automated storage and retrieval systems, noted that there were 3,277,700 work related injuries and illness recorded by the U.S. Bureau of Labor Statistics in 2009. Of those cases, 1,238,490 required days away from work to recuperate. On top of that, the Occupational Safety and Health Administration (OSHA) says about a third of all recordable worker injuries each year result from ergonomic hazards, and that these injuries cost several billion dollars per year—accounting for about $1 of every $3 in workers’ comp claims.

This company claims that by reducing worker compensation costs and improving productivity, the typical return on investment (ROI) of an AS/RS is 12 to 18 months.

But another blogger, David Stuart, has the right idea. Although investing in equipment and systems to increase safety is a good idea, the money will go to waste without investing the time necessary to have the safety message sink in. At Stuart’s company, that means daily plant level safety meetings, including representatives from all operating and administrative units. The purpose of this meeting is to review safety or environmental incidents, discuss near-miss incidents and come up with root causes and corrective actions.

“These activities promote safety as a value within our organization,” he writes. “It’s instilled in our culture. It is everyone’s expectation to leave work in the same condition as one arrived.”

I hope those expectations are exceeded. They’d better be smarter, too.

The results of MH&L’s salary survey will be out soon. Wherever you fall in comparison to other professions, you probably deserve more. Material handling and logistics are more critical than ever to this nation’s security. Of course, my being editor-in-chief of a magazine called Material Handling & Logistics, you might expect me to be a blowhard about what you do.

John Nofsinger says he’s seeing higher ranking corporate types registering for this year’s ProMat, the big material handling and logistics show and conference coming to Chicago’s McCormick Place March 21-24th. Of course his being CEO of Material handling Industry of America, ProMat’s producer, you might expect him to tout the importance of what you do, too.

So if you’re looking for some compelling non-biased source to prove to your superiors your true strategic worth, listen to what Tom Ridge, former governor of Pennsylvania and former secretary of Homeland Security, says about your job:

“Logistics not only combats terrorism but as you try to build economic resiliency and reduce risk to the supply chain, you do the same for America.”

That’s the message Ridge says he’ll deliver during his keynote address at ProMat. Today, as founder and CEO of Ridge Global, LLC, a Washington, D.C. based security consulting firm, Ridge has a unique perspective on the state of U.S. security. I had the opportunity to interview Gov. Ridge in advance of the ProMat conference, and he shared several interesting insights about how this country’s security intersects with that of its supply chains, particularly in light of the recent citizen’s revolution in Egypt. Here are some highlights from our conversation.

MH&L: What role did logistics professionals play during your tenure with the Bush Administration, particularly after September 11?

Ridge: America’s prosperity and its security are interlinked. One of the unique roles those responsible for logistics play is security of the supply chain and building the resilience necessary to protect our flow of goods. People in the supply chain arena have to apply the same mindset of philosophy I did as Secretary of Homeland Security: what are the risks of business interruption?

President Bush called me in shortly after 9/11, and said ‘Tom, we brought security up at our borders with friends in Canada and Mexico and we brought commerce to a screeching halt. Do something about it.’ So we built a smart border agreement with both Canada and Mexico.

MH&L: Give us an example of how corporate and national security are intertwined.

Ridge: I visited a GM assembly plant in Flint, MI after 9/11. They ordered their seats from a supplier in Ontario. It’s a JIT world, so they put the chassis on the assembly line and toward the very end of the line they inserted the seats. An assembly line comes to a grinding halt if semi trailers are stuck on the bridge or in the tunnel trying to get into Flint because we’ve ramped up security so high. It shows that in doing the kind of things we need to do to enhance our security and protect ourselves against a potential terrorist attacks, we have to be mindful that we also have an economic dimension and we have to find the right balance. We could check every bloody truck coming over the border and you know what that does? You push that traffic back days. That shuts the assembly plant down. It’s a classic example that our economy and our security intersect at our borders.

MH&L: What were your thoughts during the recent revolution in Egypt? Any lessons to be learned?

Ridge: I’ve heard that from 8-10 percent of the world’s commerce goes through the Suez Canal. I suspect a lot of it is oil, but there are choke points around the world. Let’s talk about piracy. What if something’s floating around in that part of the world that’s ultimately destined for the U.S. or part of your supply chain? What does that do to your business? Think about the batteries that power your radio. There are 15 sources of metals and ingredients in those little batteries. The interconnectedness of our world makes us vulnerable to attack because the forces of globalization that drive our economy are the same ones that can be responsible for preparing and executing a terrorist attack.

Geopolitical risk is probably one of the most significant risks companies face. For example, I’m on the board of Hershey’s. They get a lot of cocoa beans from the Ivory Coast. With all the instability over there you could see a spike in cocoa prices, and that’s a risk for Hershey’s, Godiva and Mars. I see Egypt as the most immediate and dramatic example of the vulnerability of supply chains to disruption based on political events. There are many other potential causes for disruption that you might be able to identify and remediate, and perhaps mitigate, but you can’t control the political calculus in some parts of the world where raw materials are being assembled. Now that the military has taken over in Egypt I don’t think we have to worry about the Suez Canal too much, but I’m sure there was some apprehension within the shipping companies and their clients in the event the canal was closed for any length of time.

MH&L: You were also once on the board of Savi Technology, which is famous for Radio Frequency Identification. What did you gain from that experience?

Ridge: Savi did a lot of logistics work for DoD. I lost touch with them after Lockheed Martin acquired them, but RFID active and passive tags are one of the 21st century innovations that are applied specifically by companies to build resiliency in the supply chain. Remember the cargo planes that were carrying packages originating in Yemen that were grounded? We often take globalization of shipping and air cargo for granted, but it is a point of vulnerability for both terrorism and for other kinds of disruptions that can impact profitability, brand, and even have an impact on employees and customers. These men and women responsible for material handling and logistics have a far more complicated job today than they ever have, and they’ll never be able to eliminate the risk associated with these supply chains. They’ll just have to manage it the best they can.

MH&L: Will technology help us deal with some of that uncertainty you mentioned?

Ridge: We certainly don’t have the technology for 100% scanning and detection. Of particular concern is radiological and nuclear matter. There are a couple companies trying to build the technology of detection that could be applied outside our borders. Anyone who has been in the military knows you try to push your borders out as far as you can. You want to make our borders the last line of defense, not the first. So you say to yourself for security purposes what can we do in China or Africa or South America to eliminate or reduce the possibility of a terrorist attack? How about foodstuffs? How about automotive parts from around the world?

I visited an automotive company many years ago and they had a pretty good handle on the first tier supplier in terms of quality, but you get down to the second through fourth tiers and they don’t really have much transparency into that world. Think about Mattel and that Christmas recall. What kind of transparency and risk mitigation strategies have they built into their logistical chain to say that that little backroom shop in some town in China is complying with all of our safety standards from the consumer protection agency? The same with food. The soundness and security of the supply chain is far more complicated than it has ever been.

MH&L: Do you feel companies are making the necessary investments in their supply chain security?

Ridge: Frankly I don’t think a lot of companies view investing in resiliency and security as anything other than an expense rather than an investment. They might have made modest progress, but I’ve talked to enough corporate security officers and they’re not solely concerned about terrorist attacks. They’re talking about the vagaries and uncertainties of having their supply chain extended all around the world. I never got the sense that too many of them feel that they get the financial support they should. One of the most interesting things that has been developing over the past year or two is that more publicly traded companies either through their audit committees or risk management committees are beginning to take a look at operational risk, including the supply chain and putting pressure on management to identify potential disruptions that could affect the company.

MH&L: Could the same be said about the challenge of getting sufficient investment in this country’s infrastructure?

Ridge: The Eisenhower Administration showed foresight in building the interstate highway system for defense purposes. That’s how we are connected. However, sadly, we have never viewed our transportation system from a strategic viewpoint. I don’t think we appropriate dollars based on need as much as we do political preference. We are the only industrialized country in the world that does not pay for our roads and bridges based on a single source of gas tax. I’ve seen figures lately that 52-53% of the dollars we use for our highway programs come from when you and I go to the pump and the rest is just borrowed money just like every other program. In the 21st century, if we are to remain competitive, we have to understand there is huge cost dislocation based on waiting times trying to get from Canada into Detroit. The cost associated with broken vehicles and blown tires and detours around antiquated bridges and roads should be of great concern to America and we should do something about it.

MH&L: How did you address that issue during your tenure with the Bush Administration?

Ridge: We were having a lot of difficulty getting to a JIT world and there were a lot of people complaining about unnecessary delays in Detroit. I give great credit to then Canadian Deputy Prime Minister Anne Mclellan. We met in Detroit in 2004 and we announced a ‘25% Challenge.’ We wanted to make dramatic improvements in reducing transit time for a truck or car crossing the border. We wanted a 25% reduction in that time and we actually got a 35-40 percent reduction because we worked with the private sector on logistics with regard to the times of day they’d be making their shipments. We worked with customs and border protection to keep additional gates open at different times and saw that with thoughtful engineering we could have the same level of security but facilitate commerce more effectively by just reengineering how we were doing both. Someone told me the cost of an idling truck could be $150 an hour. That’s a lot of money. Anything you could do to reduce wait time is a plus. At the borders you want to do it but not at the sacrifice of additional security measures. It’s a constant challenge, and I have great respect for logistics managers because they have to deal with the same kind of issues I did. Their world’s a little more complicated because our government is now looking to them to help from a security viewpoint as well.

Despite the political unrest in the headlines lately, it’s nice to see that our economy seems to continue its recovery unabated. Just watching what happens in the material handling and logistics sector is exciting. ERP Analyst Michael Koploy shares my excitement, particularly about trends in the warehouse management system (WMS) sector. He alerted me to a market analysis he posted, stating that projects that have long been postponed are now getting put back on the front burners. This is particularly the case among small and medium companies, he says. He cites Terry Harris, managing partner at Chicago Consulting, as his source.

“Small businesses are being a little more aggressive than larger ones, perhaps because their purchasing decisions are more predicated on their current earnings,” Harris says. And WMS capabilities are more likely to give these companies a bigger bang for their buck, considering many such small and medium companies are rapidly outgrowing their current warehousing capabilities and need to find ways to serve their returning customers.

“Warehouse managers need to act urgently to stop their operations from foundering, which means buying WMS solutions right now,” Koploy writes. “Cloud-based WMS systems are a great option for many smaller operations. A lot of small to medium businesses are choosing WMS software in the Cloud because it requires little IT assistance, and an attractive payment model.”

I think Koploy is onto something. Another reason there’s pent-up demand among small and medium companies for the new-generation WMS is they’ve been relying on what limited material handling automation they do have to give them WMS capabilities. That can only take them so far in today’s interconnected supply chain environments.

I traded e-mails about technology trends with WMS guru John Hill, vice president of the logistics consulting firm Transystems and member of the Board of Governors at Material Handling Industry of America. I told him that in recent years studies have shown that there’s still a big population of companies out there that don’t even have a WMS, let alone are considering replacement or upgrade. He told me many of them may have one without even knowing it.

“Back in my youth, the systems functions we offered with a Kenway AS/RS mirrored many WMS, but we never used the term,” he said. “And today you can buy an integrated handling system using a warehouse control system [WCS] that manages material flow and provides reports on throughput, exceptions, etc., without buying a WMS. At least hypothetically, in a fully “lights out” automated facility, given bar coding and scanners, you can receive into and dispense from automated storage systems, depalletize, convey, sort to shipping docks and, indeed, with extendable conveyors, load trucks and keep track of all transactions without a WMS.”

After digesting that, and before questioning the wisdom of investing in a new-generation WMS, consider a key capability those old workarounds can’t give you: labor management. With this kind of tool you can measure the time cost of your non-automated solutions—your people. It can also help you deploy them more intelligently, through task interleaving. In one trip through your warehouse, a worker can complete multiple types of tasks, i.e., put away a pallet, move a container, and pick a last-minute priority order.

If you’re one of those people considering your next material handling and logistics move, make your first step a visit to ProMat. You’ll find a ton of WMS options displayed and discussed there. The fact you’re reading this blog says you’re hungry to learn more. A trip to Chicago March 21st through 24th will more than satisfy your appetite.

If you’re already in the middle of a WMS implementation, share some of your learnings with us. Considering the potential for productivity growth, you’ll be doing your colleagues in our audience a public service.

What do you think a good supply chain manager ought to be paid? Go on, think of a number, and by all means, use your own salary as a baseline. A year ago when we asked that question of our readers, we learned that the average salary for a material handling and logistics manager was just a hair over $80,000. We’re crunching the numbers right now for the MH&L 2011 Salary Survey, and if you’re in Chicago for the ProMat 2011 show, you can find out whether salaries have gone up, down or pretty much stayed the same.

MH&L (along with our Distinguished Competition) will be presenting a session on March 22 at 3:00 pm that reveals the answer to the always relevant question: “What are you worth and why?” Click on the video below for a sneak preview of the session.

Without giving away too much (the full results will be published in our March 2011 magazine, as well as posted in its entirety here on the website), I can tell you that while overall job satisfaction is about the same as it was a year ago, the number of respondents who say they are “very satisfied” took a big drop, with most of them opting for the somewhat less enthusiastic option of “satisfied.”

There is also a troubling “satisfaction gap” among respondents who were asked about their choosing material handling and logistics as a career path, with a big drop from a year ago in the number of “very satisfied’s” and an increase in those who opted for “neither satisfied nor unsatisfied.” One reason for the dissatisfaction could be that nearly half of all respondents say it’s been more than five years since their last promotion.

We’ll take a deep dive into all the final results next month. Stay tuned.

When most material handling and logistics managers see underutilized warehouse space, their first instinct might be to focus on the racking. But sometimes the answer to a storage problem isn’t found in the most obvious place. For many warehousing problems, Jim Moran usually looks at lift trucks first. That’s understandable, considering he’s senior vice president of Crown Equipment. But he made a convincing case for his approach last week when his company introduced a new order picker to the market.

Crown’s new RM 6000 was unveiled as industry’s first narrow aisle reach truck with a MonoLift mast and the first pantograph reach truck that can reach 505 inches and deliver up to 1,000 pounds more capacity at height. Moran sees this as a game-changer when it comes to facility design.

“We feel this could influence how warehouses are built,” he told his online audience of industry writers during a press briefing last Friday. “Warehouse layouts have been at the mercy of reach truck specs for decades and that often translates into wasted space in aisles and on the rack. If you walk around most DCs you’ll see unused rack and open slots at the top of many if not all the aisles. That’s because they don’t have the capacity to lift loads at height. We needed to help them better utilize that space. And we had to allow them to do it with visibility enhancements that kept the operators at maximum productivity levels while maneuvering loads at high heights.”

Moran said the monolift mast was key to handling those heavier loads and to offering operators better visibility. He used one of Crown’s freezer clients to illustrate the savings potential. It was using a 321-inch-lift-height deep reach truck to serve five levels of storage. The engineering challenge was this: If this customer could go 400 inches—or one level higher—with a deep reach and maintain the same truck capacity, what would that mean in terms of freezer construction cost?

Well, five levels required a 250,000 sq ft warehouse at $120 a sq ft. That works out to $30 million to build an equivalent freezer. At six levels, the same number of pallet positions, 208,000 sq ft, at $130 per sq ft, that’s $27 million. So that means a $3 million savings in building costs. Going further, by narrowing the truck’s outriggers and getting more bays in that footprint, that could mean adding more pallet capacity.

So bottom line, what’s the return on investment for such a lift truck?

Moran says it would be about a year, factoring in the additional energy savings from AC motors, the regenerative braking and lowering system, and electronic steering. These features, combined with the option to use a larger battery, can mean energy savings and run time improvements of 25 percent or more depending on the application, according to Crown’s press materials.

While this addresses the challenge of getting more payback from making better use of the upper-level space, Crown also talked about the challenges for pickers working out of the lower-level, higher velocity pick zones. According to the company’s time and motion studies, picking is one of the biggest time eaters in a warehouse. It entails getting the pick instruction, walking to the pick slot, retrieving a case, placing the case on the pallet, and managing the load. According to Tim Quellhorst, Crown’s senior vice president of engineering, the picking process offered a lot of savings potential.

“Rather than reinvent the picking process we thought we could make it more efficient by helping the picker and the lift truck work better together,” he said. “Studies showed that 95% of an operator’s time was spent off the truck. We concluded the pickers spent most of their time moving back and forth between the rack and the truck, as well as repositioning the truck. Second, pickers were expending a lot of energy by carrying heavy boxes to the place where they last parked the lift truck. In most instances this was farther away than necessary. Third, pickers were getting a ‘Stairmaster’ workout by frequently stepping on and off the vehicle’s platform. This was unnecessary use of energy that strained endurance.”

In the spirit of moving the mountain to Mohammed, the company introduced its QuickPick Remote Advance system. The operator is able to stay off of the lift truck and use a transceiver glove or transceiver trigger to advance the truck to the next pick slot. A wireless transceiver module that snaps into a holder on the back of the glove periodically transmits and receives RF signals from an RF tower located on the truck.

Lasers detect obstacles in the path of the truck, stopping it before making contact. The lasers can also detect proximity to racks, enabling course corrections.

The industries Crown sees getting the greatest benefit from this are retail and wholesale trades as well as manufacturing—basically any company with high throughput and pick densities.

This event offered some great examples of how engineers address constraints. Their challenge is that their organizations are designed and managed in separate parts. The result is usually an under-performing whole. It’s nice to see that lift truck providers, which usually cater to those separate pieces of their customers’ organization, are starting to help their customers think holistically and act logistically.

An 11-year-old girl’s heartbreak over losing her 17-year-old sister in a texting-while-driving accident inspired the gift of a vertical carousel to help console the little girl. Normally, this application of industrial equipment would make absolutely no sense, but neither did losing a loved one over a text message.

Turns out, this 11-year-old Wellman, Tex. girl is an avid craftsperson. This fact was learned by the producers of ABC’s Extreme Makeover: Home Edition. Nate Galui, a design producer for the show, had seen the carousel system on the website of Southwest Solutions Group. While touring this company’s showroom in Dallas, Galui also saw a unique automated product that the company donated for use in a future episode. That’s when the connection between an industrial storage system and a little girl was made.

Southwest Solutions Group was eager to help this family in need, so it donated and installed this sophisticated carousel storage system typically used in hospital and manufacturing environments. For this special makeover, the system was converted into a “craft suite” that now provides compact storage for all of the little girl’s craft items.

“Many at our company have teenage children and we feel deeply for this family’s tremendous loss,” said Rich Riemer, vice president and principal of Southwest Solutions Group. “Texting while driving is incredibly dangerous. We wanted to be involved because we can identify with this important issue.”

In addition to this personal donation, for every vertical carousel it sells during 2011, Southwest Solutions will make a monetary donation to a new national “don’t text and drive” organization founded by the Texas family in honor of their 17-year-old daughter.

This story warms the heart and chills it at the same time. If you’re a parent, share it with your kids. Tell them you have an interesting material handling story to tell them. When they’re done laughing at that strange sentence, tell them the rest of the story. Its twist should focus their attention on an important lesson. Keeping that focus sharp will be your ongoing challenge—as every parent knows.