Just when companies thought it was finally safe to make some long-delayed capital investments, politicians once again prove why they’re among the most distrusted groups of professionals. An article in The Wall Street Journal this week said that while Democrats and Republicans debate how this country will meet its debts—or WHETHER it will—big companies are holding back on making any kind of major expenditures or hiring decisions.

“Companies from Ford Motor Co. to Eaton Corp. stressed the importance of ample liquidity, in view of current uncertainties in the market—from the U.S. debt impasse to troubled European economies,” the article reported.

Of course our stalwart leaders in Washington only want what’s best for us taxpayers. They’re trying to be more judicious about how they’ll invest our money. On the defense side, I’m sure they’ve learned by their mistakes—like letting some of that $2.16 billion transportation contract in Afghanistan fund the Taliban. That will never happen again. Trust them.

The same day that gloomy WSJ article came out, PricewaterhouseCoopers released the latest edition of its PwC US Manufacturing Barometer. After reading it I wasn’t sure the authors of this report or the executives who took part in the company’s survey had the debt debate on their radar screens at all. At least it wasn’t mentioned in the relatively rosy assessment this report conveyed.

“A vast majority of U.S. industrial manufacturers expect positive own-company revenue growth for 2011 and the next 12 months,” the report stated. “While several key factors including higher costs of raw materials and commodities, oil and energy prices, higher costs of services worldwide and the economic impact of Japan’s earthquake and tsunami have contributed to the uncertainty about the world economy over the past 12 months, U.S.-based industrial manufacturers continued to grow international sales in the second quarter of 2011 and are projecting continued strength for overseas revenues.”

Then the report quoted Barry Misthal, U.S. industrial manufacturing leader for PwC, and his assessment was the exact opposite of what was conveyed in the WSJ report:

“U.S. industrial manufacturers aren’t as concerned about demand over the next 12 months as in past quarters,” he said. “Furthermore, they are planning major new investments to introduce new products and services, expand their geographic reach and undertake business acquisitions to bolster growth.”

How could there be such a wide gap between these two outlooks? Maybe it’s because PwC’s surveys were conducted from April 7 through July 14th, and the debt ceiling crisis had yet to get everyone’s attention. I’d like to think it’s because some leading companies are taking the Washington Follies off their viewing schedule entirely and focusing instead on a regimen of self reliance. Something else PwC’s Misthal said supports this:

“With concerns that the U.S economy may have stalled in the second quarter of this year and a number of barriers being cited that have the potential to limit growth in 2011, industrial manufacturers are looking to the mergers and acquisitions market to fuel growth. The right deals can not only add scale but build efficiencies and help businesses gain access to new markets.”

I like the way he’s thinking. Makes me feel cautiously optimistic all over.

Establishing wind power on the Great Lakes will take more than a lot of hot (and cold) air.

I recently attended a conference on wind power manufacturing, which had as its theme “Making It Here” (i.e., in the U.S.). Not only was the conference on a particularly relevant topic for supply chain professionals, but it was literally across the street from my office, meaning I expended virtually no resources in traveling to the event (other than negligible shoe leather).

One particularly interesting session was on the topic of offshore wind tower production. The blades for these wind turbines, as well as the towers themselves, are so huge that entire cottage industries are emerging along Great Lakes shorelines to produce, transport, install and maintain these huge structures. This leads to some very unique supply chain and logistics challenges.

For instance, manufacturing companies are jockeying to set up their facilities as close to the waterfront as possible. These blades and towers are so long – well over 100 feet long in some cases – that it requires numerous different types of vessels to move these structures to an offshore installation – tugs, barges, cable-laying vessels, installation vessels, crew transport vessels, and operations & maintenance vessels. And that doesn’t count the transportation – generally exceptionally long flatbed trailers – needed to get the blades to the shore in the first place.

Offshore wind is already a big business overseas, especially in the North Sea, and the lure for U.S. companies is that “the amount of wind power in the Great Lakes region alone has the potential to power the entire United States,” according to Lorry Wagner, president of Lake Erie Energy Development Corp. (LEEDCO). The wind industry is hoping to tap into that potential and make it a reality, though there are any number of hurdles to get past for that to happen. One huge hurdle is the need for funds, and that was at least somewhat addressed earlier this year when a $50.5 million program led by the Departments of Energy and Interior was announced.

“If we can repeat just a small shadow of what Europe has planned in the way of offshore wind power, we’ll have a new multi-billion dollar domestic industry, with the potential to create tens of thousands of new jobs just in domestic offshore wind alone,” predicts Chris Wissemann, general manager of Freshwater Wind. Getting to that point, though, will require a sustained policy at the federal and state levels. “Sustained policy transformed wind and solar from niche technologies to big business and lower-cost power,” Wissemann points out, “and offshore wind needs a similar efort.”

The offshore wind industry faces four primary challenges, observes Scott Viciana, vice president of Ventower Industries, a manufacturer of wind turbine towers:

1. the creation of jobs

2. lowering the cost of energy generated by wind

3. encouraging investment

4. creating an industry and a supply chain to support that industry.

Any supply chain manager will tell you it usually pays to source locally. That policy hasn’t worked so well, however, for the U.S. Military in sourcing transportation to supply our troops in Afghanistan with food, fuel and weapons. According to a Washington Post report, we U.S. taxpayers have been unwittingly funding the Taliban by choosing transportation providers based in Afghanistan. This was part of a $2.16 billion transportation contract. Turns out, four of the eight prime contractors were funneling support to the enemy. There was also some profiteering, money laundering and kickbacks to local police and government officials happening on the side.

Apparently this kind of thing has been happening for quite a while. The Washington Post quotes Rep. John Tierney, Democrat of Massachusetts, who last summer chaired a House Oversight Committee that charged that the military was supporting a vast protection racket to ensure safe passage of U.S. truck convoys moving across Afghanistan.

It sounds like the Taliban have been watching old episodes of the Untouchables. But where’s our Elliott Ness? Our law makers in Washington are more like the Keystone Cops, scrambling around frantically looking for a way to keep the U.S. government funded. One faction of these Cops wants higher taxes, the other wants to cut spending. But none of them seems to want to face the fact that a chunk of the taxes we’re already spending are being used against us.

The report concludes that interim steps have been taken to improve oversight and accountability “within the murky web of companies and individuals involved in the shipment of more than 70 percent of all U.S. military food, fuel, weapons and construction material within Afghanistan.”

I hope whoever is taking those interim steps is also seeking better logistics intelligence. They should be benchmarking private sector logistics operations. At the very least they should be taking a few seminars. Here are a couple I just learned about in the latest batch of press releases to hit my e-mail:

Contracting for Transportation & Logistics Services, presented by Raymond A. Selvaggio, Esq. In this intensive program on both the practical and legal aspects of contracting for logistics services and supply chain solutions, attendees will learn the “do’s” and “don’ts” of contracting. Plus attendees will have a unique opportunity to discuss their specific contracting problems and issues with a knowledgeable transportation attorney.

Maybe the geniuses who used U.S. logistics funding to support our enemies could ask the instructor how to limit the Taliban’s hours of service.

Then there’s “Transportation, Logistics and the Law,” based on the text by William (“Bill”) Augello, and presented by Brent Wm. Primus, Esq. This one-day course will provide a basic working knowledge of the laws and regulations affecting the supply chain and governing the relationships between the parties—shippers, carriers, and intermediaries. Topics include the critical issues which transportation professionals and attorneys are confronted with in their day-to-day activities: vicarious liability for highway accidents and deaths, liability for freight charges and exposure to double payment and elimination of cargo liability insurance.

I wonder if Brent could add a section on liability for lost American lives if any of these chowderheads who indirectly hired enemy subcontractors follows up on my referral for remedial logistics education.

These are great learning opportunities for anybody involved in logistics, and I recommend you sit in on them if you can. They’re being offered by the Transportation & Logistics Council this September (in Camden, N.J.), October (in Elmhurst, Ill.) and November (in Ft. Worth, Tex.).

If those afore-mentioned chowderheads are reading this, or if they could find someone to read it to them, I recommend you attend all three sites—just to make sure the logistics intelligence sinks in. Put it on my tab. Of course that goes without saying, doesn’t it?

I like country music, but not so much for the music. I like it for the relationship that has grown between its artists and its fans. It’s a great model for any industrial supply chain. Whereas in Hollywood, movie and music stars are separated from their customers by agents, producers, and their own entourage of assistants, in Nashville, country music artists have developed a direct connection with many of their customers. They know what their fans like and what they don’t like because these fans tell them directly.

The fans reward their music suppliers for excellent service, too. At the annual Country Music Awards, it’s these customers who judge the quality of their suppliers. Greatness isn’t determined by an academy of middlemen that separate suppliers from their customers. The customers are trusted to set that quality standard.

Two recent press releases announcing industry awards inspired me to wax poetic about the beauty of the country music supply chain. These were awards that lauded trust, both within and between supply chain links.

The first was an announcement from Applied Industrial Technologies that it received two awards from a customer– Eastman Chemical Company —as part of the Eastman Supplier Excellence Program for 2010. Applied was recognized for supplying quality materials and on-time shipping performance, but more importantly, it merited Eastman’s Innovation Award for “assisting numerous customers throughout the facility with value-added projects and helping to proactively manage inventory levels for optimum efficiency.”

In accepting these awards, Applied’s vice president of marketing and strategic accounts cited the mutual trust that made the award possible.

“Eastman Chemical … allows us to work closely with several departments throughout their organization, which gives us the opportunity to be successful in helping them reduce costs.”

This customer trusted its supplier enough to give it insights into its operations and its people—the very soul of any company.

The other announcement I found inspiring came from Automated Packaging Systems, suppliers of bag packaging systems. It was recognized as one of the Top Work Places in Northeast Ohio, coming in 5th among large companies with more than 500 employees in the area. This time it was employees—who can be an employer’s most underappreciated customers—doing the judging, via a 22-question survey. Once again trust was a major criterion.

Automated Packaging Systems scored highest for the following employee appraisals:

• I believe this company is going in the right direction.

• I feel genuinely appreciated at this company.

• I am confident about my future at this company.

In accepting the award, the company’s CEO, Bernie Lerner, said his employees “worked hard to make this company a leader in our industry.” He added: “We believe clear and open communications in a great working environment allows great minds to perform at their best.”

It was good communication that made these employees confident in the direction their company was taking in serving their external customers. No middle managers filtered or censored that information flow between the CEO and his employees. As for Lerner, he knew exactly who helped make his supply chain successful—his people.

All winning supply chains share experiences within and among their links. I hope your supply chain is enjoying the rewards of such harmony.

A couple blogs back I reported about the “arty” nature of bar codes on consumer products. Some Consumer Packaged Goods manufacturers are transforming their old boring bar codes into graphic images to capture consumer attention. We’re also seeing more of those QR (Quick Response) 2D codes on packages that allow consumers with smart phones to get immediate access to multi-media information about those products.

It seems like advances in automatic data collection and in smart phones are making consumers more conscious of the power these technologies can give them. This power is making news.

The democratic revolution brewing in the Middle East was made possible in part by ordinary citizens shooting videos of the brutal crackdowns on protesters by their leaders and posting them online for the world to see. And even more recently, consumer groups have found an effective way to use QR codes to rally shoppers against Hershey Products for doing business with West African cocoa farms that employ abusive child labor, forced labor and trafficking. These groups are leaving “Consumer Alert” cards on the shelf in front of this company’s products. The QR code on these cards allows shoppers to use their smartphones to protest the company’s practices.

If this trend continues there’s a good chance consumers may become more adept at using some ADC technology than many logistics organizations. I say that because after the economic downturn many companies downsized their organizations, and according to Joe Andraski, president and CEO of the Voluntary Interindustry Commerce Solutions Association (VICS), not only was headcount downsized, but so was technological experience and knowledge.

“Understanding of the basics of Electronic Data Interchange [EDI] has been lost,” he told me. “Why is it that a major motor carrier spends some $2500 in customized EDI transactions? The basics are there, but largely ignored by all but the largest companies. The root of the problem is senior management, who just don’t know what they don’t know.”

Andraski happens to be on MH&L’s editorial advisory board, as is Bert Moore, founder of IDAT Consulting and Education, specialists in automatic identification technology. Moore says that even in the best of economic times, subject matter experts in a company get promoted, transferred, leave or retire. He told me that during a recent meeting he fielded two pretty basic questions about Code 128—technology that is far from new.

Even when it comes to bar code label (and RFID tag) placement, details that are clearly outlined in EAN/UPC (now GS1) and ANSI standards—lower right-hand corner of the long side—are being ignored by industrial shippers.

“They want the label on the front or top or higher up or somewhere else,” Moore said. “This is probably because of their automated conveyor/sortation design requirements. But is that because systems integrators are unaware of existing standards and practices? Maybe these people came into the field after the development of all the bar code standards and they don’t understand the struggles we went through to get things standardized.”

Self-interest is motivating consumers to get up to speed on what ADC technology can do for them. Seems to me logistics professionals ought to lead the way in that race.

I like to think this blog brings me closer to you, the MH&L audience. However, sometimes it seems that the more cyber-connected we become, the less human connection we experience. We let emoticons replace emotions.

There’s an even darker side to this. There have been many articles written about the prevalence of online bullying on Facebook and other social media. Anonymity tends to lower our sense of others as being people like us. So, as logistics technology employs more online connections, let’s remember our supply chain connections are people first.

Of course human insensitivity is nothing new. Jerks have been around since Adam whined to God that “Eve made me do it!” But when a jerk has a lot of people who work for him or her, or equally problematic, do business with him or her, the resulting consequences can be deadly to a business’s reputation.

Srini Pillay, MD, Assistant Clinical Professor of Psychiatry at Harvard Medical School, says that when a leader, or a company, exhibits insensitivity, unfairness, lack of empathy or respect, they often spur a “gut reaction” in people that subconsciously erodes trust. The results may not show up overnight, but they can completely destroy a company over time, with the people in charge “never knowing what iceberg they hit.”

Pillay, author of a new book, “Your Brain and Business: The Neuroscience of Great Leaders,” says that emotional responses to workplace issues have gone from being a soft skill to becoming “Brain Science.” He writes that emotions are a vital part of intelligence and that they do and should play a role in a company’s culture, even in how a company deals with customers, its own staff, partners and vendors.

That sounds like a supply chain issue to me, so I e-mailed Dr. Pillay and told him about you, MH&L’s audience—how you have to deal with a wide variety of business contacts to keep products flowing through your supply chains. I noted that a lot of this is handled online or over the phone and asked if he had any insights into how emotions affect supply chain management.

Full disclosure: Pillay is also the founder and CEO of NeuroBusiness Group, an executive coaching company that “helps businesses improve their emotional intelligence in a variety of settings by using the lessons of brain science in practical ways to enhance leadership development and accelerate business strategy.” So going into this I wasn’t sure whether to expect him to sound like an author hawking a book or a consultant selling his service—neither of whom would know much about how logistics works.

It was nice to find out he actually had a pretty good grasp of supply chain challenges. He told me that in keeping product moving around the world, from suppliers through to customers, the following communications challenges can arise.

1. Cultural and linguistic barriers. These can arise due to differences in culture and language, even within a supply chain manager’s own company. “Ingroups” and “outgroups” can form, thereby making the smooth execution of strategy difficult as people see themselves as separate. “What needs to be done,” he writes, “is reframing and then practicing this reframe. Brain imaging studies have shown that when we reframe issues, the brain’s anxiety center may experience some relief. In this instance, members from different cultures who are all making money from a joined process may need this to be explicitly highlighted and emphasized. We teach people that it is not their culture and language that defines their team, but their shared process and financial goals.”

2. No access to visual feedback: As I noted at the top of this blog, we get much of our feedback from co-workers and business partners by telephone, e-mail or online. This takes out the visual feedback you can get in an office environment. However, according to Pillay, the brain’s fear center is as sensitive to voice as it is to viewing fearful or threatening expressions. It matters how one speaks and even writes to others.

With these things in mind, he recommends the following:

1. Use skype for introductions when personal meetings aren’t possible;

2. Use a centralized communications platform (e.g. on google);

3. Rotate annual meetings among different locations.

Bottom line, whatever form of communication you use in business or personal life, pick up on the power and lasting effects of emotions. And drop the emoticons.

It’s pretty easy to get an infant’s attention. Just wave something bright and shiny in front of it and the rest of its world disappears. We media types are like that, although sometimes I think the bigger the media outlet, the bigger the baby.

A few weeks ago, one of the biggest—The Wall Street Journal—latched onto a bright shiny toy that many of us less pampered kids in the trade press got used to a long time ago. Bar codes.

I’m not saying bar codes aren’t important toys. Let’s just say they’re mature, and other toys have captivated the trade press in recent years—things like image-based bar code reading and QR codes. But just as some toys never die (Slinky anyone?), bar codes aren’t going anywhere. In fact what got WSJ’s attention were the more “arty” bar codes marketers have been putting on consumer packaged goods lately—making funny pictures out of the functional lines in them.

“The barcode, the style runt of product labeling, is getting gussied up,” WSJ enthused. “Beer, granola, juice and olives are sporting barcodes that integrate famous buildings, blades of wheat and bubbles into the ubiquitous black and white rectangle of lines and numbers. Consumer-goods companies hope these vanity barcodes will better connect with customers.”

Meanwhile, further out in those consumers’ supply chains, manufacturers are just hoping the bar codes they use will help them track and trace those products at every stop along the way to the consumer. So the bright, shiny toy we in the trade press are fascinated with is the supply chain itself, because it’s always changing. There’s no such thing as a typical supply chain, so automatic data collection has to be flexible enough to change with the chains it’s applied to.

There are also many different permutations and combinations of parties involved in these chains, on the regulatory side as well as the sales side. That complexity will grow as more companies expand their markets outside the U.S. and more parties will need access to the information in those chains.

For a while it looked like radio frequency identification (RFID) tags would replace bar codes to track products down to the item level. Then complications like cost and technical bugs tarnished RFID for a while and bar codes started looking good again. Shippers started asking GS1, the international standards body, whether they could do as good a job tracking and tracing with bar codes. Sue Hutchinson, director of portfolio strategy at GS1, didn’t see why not.

“We started this process with RFID because that’s where it made sense at the time but very quickly the users came back and said we like this visibility but I can’t guarantee RFID everywhere in the supply chain,” Hutchinson told me recently. “They asked if they could accomplish the same thing with bar codes. We said as long as you can get a serialized identifier in there and get me a time/date stamp and you’re using a good identification scheme like a global location number to talk about your locations, there’s no reason you can’t do this with bar codes.”

So bar codes are getting shiny and interesting again for supply chain managers, but not for the reasons that got WSJ’s attention. Instead of looking for funny and clever pictures you can make out of them, now industries are getting excited about replacing their old EAN/UPC bar codes with the much smaller but more data rich GS1 DataBar symbols. If you’re as excited about the potential uses for these bar codes as we at MH&L are, there’s nothing infantile about that. Just a bit nerdy.

One of the most difficult components to price on a lift truck is the operator. This occurred to me after exchanging e-mails with Scott Friedman last week. He’s CEO of Seegrid, makers of systems that are turning pallet trucks into vision-guided robotic vehicles. He asked if I ever saw a chart that breaks down the cost of a lift truck. I told him I remember seeing something that did that but it was quite a while back.

Eventually he found what he was looking for and shared it with me. In this breakdown of “typical lift truck costs,” maintenance and purchasing were two of the bigger pieces of the pie, together accounting for almost half of it. Fuel & insurance and disposition were slivers. By far the biggest chunk was “Operator Cost,” which constituted almost half of the pie.

That’s pretty huge, I thought, but Friedman thought it was even bigger than this—closer to 70 or 80%. You might expect someone who sells robotic systems to think this way. But we traded ideas on what could be included in this nebulous “Operator Cost” category. A few things came immediately to my mind: hiring, training, medical, and the cost of losing and then re-hiring and re-training.

He agreed, and said that these factors are probably left out of most operator cost calculations. In fact, he said, because there has been no alternative to operators for so long, no one has done a thorough job in quantifying the costs around operators.

In MH&L’s June issue, we mention automated lift trucks as a relatively new factor in the U.S. lift truck market. Established players like Raymond, Linde, Toyota and Crown are starting to introduce products in this category. Friedman gave his rationale for this:

“Due to high wages and labor laws that very much favor the worker, the thinking is that almost any amount of money is worth it to permanently eliminate an operator resource in a facility.”

He added that one of his U.S. dealers did his own calculation with a customer. They found that on a cash basis, even if a robotic truck were priced at $300,000 it would still pull less money out of an operational budget on a week by week basis than one worker.

Of course that would depend on the size of your fleet. Still, at a time when fleet managers are starting to look at making new investments, potential game changers like fuel cells, 3D safety sensors, and yes, even automation, will start to change how the industrial vehicle cost pie is carved up. The operator costs category may soon be a sliver of its former self. How much of a sliver depends on the economy and on you. Let us know if you have an appetite for what’s cooking in industrial trucks.