After Tough 2009, Signs of Uptick in Investment in Material Handling Automation Going Into 2010

While 2009 was Largely a Bust, Food, Beverage, Consumer Packaged Goods, and Parts Distribution Now Showing Strong Activity, System Providers Say; Retrofits and Upgrade Projects also Active

2009 will go down as one of the worst ever for materials handling equipment and DC automation system sales.

Beyond the recession that crimped budgets and left companies hoarding cash where they could, distribution volumes dropped for most companies, reducing the volume pressures that are often the catalyst for distribution center automation projects.

The numbers from the industry trade group, the Material Handling Industry of America (MHIA), tell the sad but true tale: new materials handling equipment orders of all kinds will drop 35-38% when the year is over, according to the group’s economists.

In the conveyor segment (which includes manufacturing and distribution), new orders are expected to decline about 25% this year versus 2008.

Hal Vandiver, MHIA’s executive vice president of business development said last month that, “We are in the middle of a contraction this year, but the worst appears to be over.”

He says the group now predicts an increase in new orders in the 2-3.5% range in 2010. However, given the lag in shipments versus orders, shipments of materials handling equipment will still shrink 5.5% next year even with an increase in orders, MHIA says.

Jim Stollberg, VP of Business Development at HK Systems, also sees a strong light at the end of the 2009 tunnel.

“After a pretty tough first half, our Q3 was strong and our pipeline is growing,” says Stollberg.

“We are seeing more activity than we saw six months ago. We are seeing a combination of distribution center consolidations, retro-fits, expansions and new facilities being designed and implemented across a variety of industries,” says Peter Counihan, President of Fortna Inc., a large materials handling systems integrator. - Click Here to read to full article

Fortna Associate Participates on University's Supply Chain Leaders Panel

Fortna associates often give back to their communities through involvement in local charities or through participation in university alumni events. Fortna is a regular participant at Georgia Tech job fairs and continuing education classes, for example.

This month, Fortna associate Patti Satterfield participated on a panel of local supply chain leaders at the University of Akron's College of Business Administration. The University boasts a strong Supply Chain Students Association that frequently invites supply chain professionals to share their knowledge and experience with students.

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Under the hood of the O'Reilly-CSK network merger

John T. Giangrande, a senior account executive for Fortna Inc., the systems integrator and supply chain consulting firm that's working with O'Reilly on the DC remodeling and construction program. "We took a look at the time frames and broke those down into site selection, design, engineering, and implementation phases and go live dates," he says. "We worked through all that in the first few weeks."

Despite the time constraints, O'Reilly opted against the one-size-fits-all approach to DC design. "We cannot build 'cookie cutter' DCs because we design our DCs based on market potential," Johnson says. "The last five or six are similar, but no two are alike."

The design work has truly been a team effort, involving input from Fortna, O'Reilly, and managers from the former CSK. Larry Ellis, former senior vice president of logistics for CSK and current Western divisional vice president of distribution for O'Reilly, praises his new colleagues for their open communication. "The O'Reilly team has not only worked with us to... teach us the new systems," he says, "but they have also included the West Coast distribution team in the numerous planning meetings through each phase of the conversion."

All the planning has paid off. The project continues on schedule well into year two, putting O'Reilly in a strong position to move ahead with its expansion. When the integration is completed, O'Reilly will have a total of 23 DCs—and enough capacity to give the planning team a short breather. "Prior to the CSK acquisition, we were on pace to open a new DC about every 18 months," Johnson says. "With this plan, we will have the capacity in the distribution network to take us out for a couple of years."

Upcoming Events

Fortna, an industry leader for Supply Chain Assessment, will be attending the following trade shows and conferences:

HighJump Software Innovation Users Conference

October 4-7, 2009

Orlando, FL

RILA 2010

February 21-24, 2010

Orlando, FL

North American Material Handling Show 2010

April 26-29, 2010

Cleveland, OH

Fortna Expands Client Support Team with Supply Chain Industry Veterans

Nashville - July 15, 2009 – Fortna Inc. today announced the expansion of their client support team with the appointment of Scott Miner as Vice-President, Systems Implementation and Nancy Malone as Account Executive.

Scott Miner brings over twenty years of supply chain and information technology experience to his leadership of Fortna’s Systems Implementation team. This group evaluates and delivers businesscase driven supply chain execution software solutions to clients. Throughout his career, he has successfully delivered complex supply chain transformation projects for well-known retail and hightech companies. Most recently, Scott led the Tier-1 Engagement Management practice for Manhattan Associates where he managed multi-solution global deployments.

Nancy Malone brings over twenty years of account management, technology and project implementation experience with a strong background in providing innovative supply chain process improvements. She has extensive knowledge of project management and technology-focused solutions with clients in a wide variety of customer-driven environments. As Account Executive, Nancy will manage existing as well as new client relationships and ensure customer satisfaction with Fortna solutions. Most recently, Nancy was responsible for managing complex supply chain projects at Fosters Wine Estates, as well as driving new business and expanding into new vertical markets while at MARC Global and TRW Systems and Information Technology Group.

Fortna's John White Addresses MHTI in Closing Keynote

Fortna EVP, John White, gave the closing keynote presentation at the MHTI (Material Handling Teacher’s Institute), affiliated with MHIA (the Materials Handling Institute of America) at the University of Arkansas on June 18, 2009. John's topic, Designing Distribution Centers, will assist supply chain professors as they teach upcoming industry professionals how to properly design a Distribution Center.

Fortna is a proud long-time member of the MHIA.

Fortna + Famous Footwear

In an economy where saving every penny is crucial, several large organizations are striving to operate as efficiently as possible.

Famous Footwear has recently completed a new 350,000 distribution facility, and has chosen Fortna with supply chain strategy design and implementation to integrate best practices for
high velocity retail distribution with best of breed equipment and system technologies.

Fortna’s integrated delivery model included program and project management, site management, design, controls, software, engineering, procurement, process design, testing, training and start up assistance.

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