The material handling industry plays a critical role in the transportation, storage, and distribution of various raw materials and finished goods across industries such as manufacturing, construction, agriculture, logistics, and e-commerce.
In recent years, the industry has witnessed momentous growth. Valued at over $130 billion in 2017, the material handling equipment market is expected to grow at a CAGR of nearly 5.5% from 2018 to 2024.
However, the industry is also witnessing a turbulent period with new technologies and market forces continuing to disrupt the global economy.
Let’s take a look at some of the trends that are revolutionizing the material handling industry.
1. E-Commerce Industry Is Pushing for Flexibility
The global e-commerce industry is likely to maintain its steady course of growth this year. Consumers worldwide have already purchased $2.86 trillion on the web in 2018, up from $2.43 trillion in 2017, resulting in an 18% growth. The share of online sales in the retail market in 2018 was nearly 15%.
The growing e-commerce industry is creating a demand for a flexible supply chain. E-commerce companies want third-party logistics and warehousing organizations to align their supply chain with market fluctuations.
As a result, the material handling industry has to build customized equipment and systems that can make day-to-day operations more flexible. They are now manufacturing engineered systems, remotely trackable transport vehicles, and smart warehousing systems to provide real-time visibility and better consumer experiences. This trend will continue further as the demand for flexible supply chains will also keep rising.
2. Big Data Is Making Big Strides
In a bit to create flexible supply chains, the material handling industry has to shift its focus from mechanical to computer-controlled equipment and systems. One of the most critical components of this transition is the use of Big Data. These systems can take information-driven decisions based on real-time data and prepare the resources accordingly.
The material handling systems will need to use data like customer location, preferences, purchase history, potential future purchases, and the flow of goods across the supply chain to provide timely and personalized deliveries. With software-driven material handling systems, 3PL organizations will also be able to make better staffing decisions and adjust work schedules.
Similarly, Big Data will play a significant role in analyzing production schedules and determining the optimal downtime for maintenance. Predictive analytics based on Big Data can, therefore, help improve the performance of material handling equipment. It’s a win-win for everyone as it reduces the business risk while saving operating and maintenance costs.
3. Automation Is Taking over
In recent years, automation has played a critical role in helping businesses to meet the growing consumer demand while keeping the production and logistics costs down. Automation remains the bedrock of flexible supply chains and manufacturing systems.
Manufacturers are looking for automated material handling systems including Automated Storage and Retrieval System (AS/RS), Automated Guiding vehicles (AGVs), and robots for loading, sorting, packing and stocking, and automated transporting and conveyor systems.
Although increasing automation has made a few types of jobs redundant, it has also led to new and exciting work opportunities. The material handling industry is now in need of technicians, software and mechanical engineers, and skilled operators who can build, run, maintain, and repair the automated systems.
This trend has also led to a shift in designing material handling systems. Now, the focus has shifted to building more versatile automated systems capable of working in multiple environments.
4. Aging Workforce Is a Major Concern
The material handling industry has reached a point where automation is generating demand for skilled employees while the current workforce is on the verge of retiring. Filling out the vacant positions with the qualified, talented, and experienced workforce has become increasingly challenging.
It has led many material handling equipment manufacturers and suppliers to come up with unique local, national, and even global recruitment strategies. That’s why the traditionally male-dominated industry seems to have started hiring an increasing number of women employees.
From manufacturing to research and corporate to sales, women are being welcomed at every level of the industry. Some companies are also trying to bring younger graduates, disabled workers, and veterans into their workforce.
However, the industry needs to take more concrete steps to ensure a steady flow of skilled employees. Joining hands with educational institutions such as colleges and universities to create a workforce capable of getting absorbed in the material handling industry is perhaps the best long-term solution to this problem.
The future of the material handling industry looks bright as the increasing popularity of online shopping will fuel its further growth. However, the industry is also undergoing disruptive changes as we speak. Hopefully, taking a closer look at these four changes will help you understand how the industry is evolving and how you can stay a step ahead of the change. Are you prepared to handle these changes? Do share your experiences in the comments section below.
Author Bio: Vernon Glick is an experienced and passionate writer & blogger by profession with years of experience in delivering unique and high-quality content. He keeps exploring the web and loves to do in-depth research when things come to writing. He loves to hang out with family and friends and indulges in nature photography.