Four key trends driving company, industry growth rate, Dematic CEO says

As the third quarter of 2013 draws to a close, several material handling companies are experiencing growth rates well above the roughly 2-percent gain in overall gross domestic product.

One of them is Dematic. The Grand Rapids, Mich.-based company is projecting $900 million in 2013 revenues, a 25-percent year-to-year growth rate over 2012. That's way ahead of the projected 12- to 15-percent growth rate for the material handling sector as a whole. It is also forecasting 2014 revenue of well over $1 billion, an all-time record.

Speaking at the opening session Monday at Dematic's annual Material Handling and Logistics Conference in Park City, Utah, CEO John Baysore said the company is gaining market share in existing segments and is benefitting from the growth in e-commerce, heighted consumer demands for rapid order delivery, and the push by companies to invest in more automated technologies to drive down costs and improve efficiencies.

Baysore told the assembled 500-plus logistics professionals that "e-commerce is probably the most obvious trend driving business for us and the industry." In a post-speech interview with DC VELOCITY, Baysore said that e-tailing is "requiring new approaches to customer fulfillment by many companies."

Dematic is capitalizing on a push by companies to prepare for "omnichannel distribution," where customers are served from traditional brick-and-mortar store inventory as well as from online fulfillment through a single channel, Baysore said. "To serve the growing e-commerce parts of their business, omnichannel brings a higher degree of complexity to distribution operations and calls for more automated solutions," he said.

The growth of e-commerce has changed consumer patterns, forcing retailers to shorten their fulfillment times. The compression in "click-to-pick cycles" is triggering heightened demand for Dematic's systems, Baysore said.

"If my daughter orders some lipstick online, she fully expects it to be there the next day," he explained. "And if I, say, forget my anniversary is coming up, when I order my wife's gift the day before, I certainly need it to be here the next day."

Beyond e-commerce, Baysore said Dematic is capitalizing on companies' increased appetite for technology to boost overall efficiencies. "Whether in throughput, order accuracy, or [return on investment], companies are looking for smart solutions, and IT is a big driver in that regard," he said.

Dematic is also the beneficiary of a shortage of qualified workers in the material handling space, as well as the sector's high turnover rate, according to Baysore. "It's hard to find floor workers," he said. "There's high turnover and it is tough to fill positions like pickers."