DJ Products, Inc.

By the end of this decade — that’s only two short years away – industry experts are predicting a 50% shortfall of material handling workers. Worker shortages are already being felt in manufacturing, logistics, transportation, warehousing and fulfillment venues; and it’s only going to get worse (see our November 3 post). The Material Handling Industry of America (MHIA) and other industry leaders are spearheading initiatives to build awareness of material handling job opportunities in America’s high schools and colleges, but they can’t do it alone. Each of us must work to change public opinion and entice young people into our industry if we are to survive.

In building awareness of job opportunity in the material handling industry, we will need to update our image with school counselors, students and the public at large. Our efforts to attract new workers are burdened by the outdated perception of material handling workers as unskilled manual laborers lagging at the bottom of the payment and benefit scale. Times have changed. Material handling jobs offer good pay, good benefits and a growth industry, an appealing triumvirate, particularly during the current economic downturn that is forcing many industries to lay off workers.

Of added benefit is the ability of material handling to offer jobs across the educational spectrum. While college grads and MBAs increasingly populate our industry, there is still great appreciation for the individual who moves right into the workforce out of high school, determined to work hard and make something of his life. It’s how many of today’s leaders in the material handling industry got their start, and we haven’t forgotten. The increasing emphasis on automation and system integration in our industry should appeal to the computer-savvy teens and 20-somethings poised to enter the workforce. Material handling jobs can offer young people the opportunity to reap immediate reward from their prodigious self-taught computer skills. And many employers will help workers increase and improve both their technical and business skills through educational assistance programs. The “you learn while you earn” approach can be particularly appealing during a tough economy.

So how can you help get the word out? Visit guidance counselors at local high schools, tech schools and community colleges. Let them know what material handling has to offer their students and leave some brochures they can pass out to students. Volunteer to speak at career day programs. This is a great opportunity to talk directly to students. Invite vocational high school or community college classes on a tour of your facilities and explain job opportunities. Offer summer internships or initiate a co-op (work/study) program through local high schools, community colleges or universities.  This is time-honored way to give interested students a taste of the real work world, and many co-op students become full-time employees.

Attracting future workers to the material handling industry is everyone’s job. Get out there in your community and start spreading the word. Our future depends on it.

With the economy down and unemployment up, jobs are a hot topic this election. As industry starts to feel the economic pinch, plants are closing, workers are being laid off and some companies are facing bankruptcy. But there are jobs aplenty in the material handling industry and the associated industries of logistics, fulfillment and warehousing.

There’s a severe shortage of qualified industrial workers in America, particularly in material handling fields, that holds promise for job-seekers. The material handling industry is expected to be “50% short in terms of employees needed by 2010,” said Virginia Wheeler, executive director of the Material Handling Industry of America’s (MHIA) Education Foundation. The growing worker shortfall guarantees job security well into the next decade for people going into material handling jobs in warehouses, fulfillment centers, logistics operations, and factories.

“Our industry is begging for people,” said Dan Quinn, MHIA VP for education. He feels America’s high schools are undercutting the value of the trade jobs that built and continue to build America. “A lot of schools measure themselves on the percentage of students who go on to college,” Quinn criticized. “Schools should embrace the concept that non-college-bound students are still valuable contributors to the economy and society.”

The reality is that many high school students are not interested in pursuing a college education for a wide variety of reasons. Many simply prefer hands-on, physical work to sitting at a desk. Many are anxious to get out on their own and lack the interest in four more years of schooling. Many do not have the financial resources to consider college but must provide for themselves immediately after high school graduation. As the recession deepens, finances are expected to play an increasing role in education/work decisions. Some high school juniors and seniors, like Alaska Governor Sarah Palin’s future son-in-law, have already been forced to drop out of school to help support their families. Some employers are offering their employees the opportunity to complete their high school education through GED programs.

It’s unfortunate that many high school guidance counselors are so focused on college that they ignore the positive opportunities available in material handling industries. Raising awareness of job opportunities is one of the primary challenges facing the material handling industry, said Alan Howie, author of Fundamentals of Warehousing and Distribution. “. . . the essential problem is we have to get the message out there that . . . work in the material handling industry is much more than a manual labor job. It’s a career in a high-tech industry. Our challenge is to build awareness of all of this in the schools and colleges.”

Insourcing is the new buzzword in U.S. manufacturing circles. U.S. economic woes are causing many manufacturers to replace outsourcing with insourcing, an unexpected boon for American workers. The declining value of the dollar against foreign currencies, skyrocketing transportation costs caused by high fuel prices, and decreasing export demand resulting from the global economic downturn are making it more cost efficient for U.S. manufacturers to produce their products at home.

The same economic forces that sent U.S. jobs overseas are now bringing them home. Manufacturing costs in Alabama are currently running 3% below those in China, causing companies like Exxel Outdoors, Inc., which makes sleeping bags for Wal-Mart and other customers, to execute an “about face” on its production priorities. Since the Wall Street tumble, the company has hired more workers, added new equipment and beefed-up production at its Haleyville, Alabama plant, while cutting production at a joint venture in Shanghai. In 2007, 60% of Exxel’s bags were made in Shanghai. This year, the company will make more product at home than abroad and expects to produce 90% of their product at their Alabama facility by 2010.

Exxel founder and CEO Harry Kazazian is predicting a 20% increase in company revenue this year to $42 million. He credits insourcing as a major factor in his company’s success during a tight economy. Since 2005, he has seen the yuan appreciate 17% against the dollar, pushing up Chinese wages, material costs and freight costs. Kazazian says moving production from Shanghai back to Exxel’s Alabama plant just made financial sense.

“Labor is China’s advantage and our weakest link,” he said. “But they can’t compete with me on my just-in-time” production cycle. Exxel can deliver a sleeping bag from its Alabama facility within three days where shipping from China can take two months.

According to government statistics, U.S. manufacturing is contracting at the fastest rate since 2001, the last time America dipped into a recession. As countries around the globe struggle with the growing financial crisis, there has been a marked decrease in export demand. Without demand for the prodigious output that originally spurred outsourcing over the last decade, producing goods in the U.S. is becoming increasingly cost efficient. Smart companies are re-evaluating their outsourcing policies and making the switch to insourcing.