The end to a long and miserable winter here in the Northeast, the return of the robins and birdsong ought to give rise to the sense of optimism that spring usually brings. More businesslike measures also give some cause for hope. The results of our eighth annual survey of key DC and warehousing metrics are one small indicator that the economic recovery continues, though at a glacial pace.
The authors of the study—Karl Manrodt, a professor at Georgia Southern University, and Kate Vitasek and Joseph Tillman of the consultancy Supply Chain Visions—believe the survey results suggest that DCs are well along in preparing for an upswing in orders—a good sign.
The primary purpose of the survey, conducted each year across readers of DC Velocity and members of the Warehousing Education and Research Council (WERC), is not to measure economic activity, of course. Rather, it tracks the metrics DC professionals use to monitor operational performance. Perhaps more importantly, the ongoing study provides a useful look at changes and trends in performance against those metrics from year to year.
Overall, the survey results show DCs resolutely on a path of continuous improvement. (Our story on the study outlines the major findings—full results will be available at WERC's website, www.werc.org, in May.) In particular, order cycle times showed marked improvement, a fact the authors attribute to a sense of urgency to meet customer demands even as volumes pick up.
And yet, the recovery still seems fragile to me. Maybe it's the elevated oil prices sparked by unrest in the Middle East and North Africa and their potential to slow—if not derail—the economic recovery. Or perhaps it's due to how uneven this recovery has been. While many businesses are reporting healthy profits, unemployment remains stubbornly high—perhaps because those same businesses are reluctant to ramp up hiring until they feel more secure about the economy's future. Certainly, the devastation caused by the earthquake, tsunami, and nuclear catastrophe in Japan, the world's third largest economy, must cause concern for business even as we grieve for the victims.
Maybe I'm being pessimistic. Other signs in our neck of the woods look good. The Conveyor Equipment Manufacturers Association reports that its "booked orders" index for January was up 41 percent from the previous year. Companies like FedEx are reporting strong gains and express confidence that they'll be able to impose higher rates as business recovers. And there are others.
It was a long winter, both as a metaphor for the economy and in fact. I'm ready for spring.