April 2011 Manufacturing ISM Report On Business PMI at 60.4%
AUTOMATION WILL SEPARATE THE WINNERS VS. LOSERS IN THIS ECONOMY…
The economy is growing, but a “hick-up” in April’s numbers due to increased material and energy costs will have an impact on organizations ability to profit from the increased activities. As the report notes, “Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered.” (Chemical Products).
This translates into the companies who have the best customer relationships and leanest manufacturing and distribution processes will truly be the winners. When price increases are static, waste can be tolerated (and predicted) at acceptable profit levels. However, when costs are climbing exponentially, any waste can be the difference between profitability and losses.
This same trend is stated in the report, “Rapidly rising raw material costs putting extreme pressure on profits.” (Food, Beverage & Tobacco Products) Only organizations that have “leaned” their organization to maximum levels will convert this activity into profitability.
This is why organizations are turning to Hornet Horizontal Carousels, Viper Vertical Lift Modules (VLMs) and Avenger Vertical Carousels in record numbers for their automated storage and retrieval operations.
This “simple automation” allows organizations to reduce labor by up to 2/3, floor space by up to 85% and increase accuracy levels to 99.99%+ levels with lightening fast implementation. These automated technologies are often used in existing facilities to “fix” bottlenecks and less efficient processes.
Applications ranging from order picking especially the slow and medium moving inventory, tools and dies, MRO (Maintenance Repair Operations), manufacturing parts, spare parts, manufacturing line inventory, kitting and many more can be optimized with relatively low cost and fast implantation.
In fact, Sapient Automation is guaranteeing to show organizations how carousels and VLMs yield under a 12 month ROI (Return on Investment). Contact Sapient Automation at http://www.GetSapient.com or call: 877-489-7301 for more details.
THE REPORT HIGHLIGHTS…
The recent trend of rapid growth in the manufacturing sector continued in April as the PMI registered above 60 percent for the fourth consecutive month. The New Orders and Production Indexes continue to drive the PMI, as they have both exceeded 60 percent for five consecutive months. Manufacturing employment appears to have developed significant momentum, as the Employment Index readings for the first four months of 2011 are the highest readings in the last 38 years.
Inventory growth also took place in April after two months of de-stocking; however, the inventory restocking would appear to be necessitated by the strong performance in new orders. While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs.”
PERFORMANCE BY INDUSTRY
Of the 18 manufacturing industries, 17 are reporting growth in April, in the following order: Wood Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Machinery; Textile Mills; Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Printing & Related Support Activities; and Petroleum & Coal Products. Furniture & Related Products is the only industry reporting contraction in April.
WHAT RESPONDENTS ARE SAYING…
- “Rapidly rising raw material costs putting extreme pressure on profits.” (Food, Beverage & Tobacco Products)
- “Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered.” (Chemical Products)
- “Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases.” (Plastics & Rubber Products)
- “Market continues to get stronger month over month. Recovery is faster than anticipated.” (Transportation Equipment)
- “Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity.” (Miscellaneous Manufacturing)