Material Handling

Jennifer Nietz - Manager of Operations


February 2014 – Material Handling is the field concerned with solving the pragmatic problems involving the movement, storage, control and protection of materials, goods and products throughout the processes of cleaning, preparation, manufacturing, distribution, consumption and disposal of all related materials, goods and their packaging (http://en.wikipedia.org/wiki/Material_handling.)

This month’s report goes more in-depth into an industry that may not often be top of mind.  We often read and hear stories on manufacturing industries but what about the industries that support large manufacturers?  What about the equipment inside that is critical to the manufacturing process?  With growth and expansion of the manufacturing space, we are seeing growth as well from the material handling space.  Here at COACT we refer to this group as process equipment manufacturing.  We have a lot of clients in this space that are starting off the year busier than ever and here’s why – private investment into industrial equipment is expected to increase in 2014; investment declined double digits during the recession, severely hurting the industry.  There has been an increase in demand from two industries in particular, oil and gas drilling and warehousing; both industries are growing and have the greatest need for process equipment. The below chart illustrates the types of equipment that make up the market of the process equipment space.

Products and Service Segmentation Chart Data

If your organization is a manufacturer of equipment in this space, you likely feel that you are up against a lot of competition.  Here are some things to keep in mind and some key success factors that are the most critical to your success during this period of growth, according to IBISWorld:

Having a loyal customer base – Long standing relationships between wholesalers and customers are common in this industry. Having a loyal customer base helps maintain a stable revenue stream, because industrial machinery has fixed wear and use-rates and regularly has to be replaced or needs replacement parts.

Locations close to key markets – Manufacturers can better serve customers when they can reduce the time between ordering and delivery. Having a location close to a major demand hub, in a large, industrialized urban center, helps ensure prompt turnaround times.

Technical product knowledge – Salespeople must have good working knowledge of the products they sell. This knowledge is developed from training or work in related fields.

Automation – Automation spending has sharply increased as manufacturers continue to look for ways to increase productivity, improve quality and reduce costs by automating human tasks that involve hard physical or monotonous work. Make sure your equipment aids in this process.

Knowledge and Compliance with Regulations – With increases in regulations in the food manufacturing space it is critical to be up to speed with all regulations and put a focus on safety and quality.

This year is starting off to be a very successful year for process equipment.  It’s critical that you have your plan in place, both internally and externally in the market.

Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.