Distribution centers and warehouses are critical partners to many sectors of the economy. Manufacturers depend on them to efficiently house their parts and accurately execute just-in-time delivery. Retailers and distributors--including those with firmly entrenched online operations--use them for similar reasons, as well as customer-service offerings like handling product returns. Indeed, warehouse/distribution facilities are crucial leverage points for the supply chain in our global economy; any mistake during the distribution process spells loss of profits and friction with customers. Savvy warehouse/distribution managers are benchmarking key metrics and adopting best practices to make sure they stay one step ahead of the competition.

The 2007 Census of Distribution--the second annual survey of the warehousing and distribution industry conducted by The MPI Group, Industry Insights, and Material Handling Management--explores this performance gap by surveying metrics, management practices, and business concerns at more than 200 warehouse/distribution facilities in the United States. Distribution 2008 examines the survey responses of distribution managers around the country and defines the practices and performances that correlate with success--and stronger supply chains--as well as offering benchmark metrics for key areas of operation.

Data from this year's survey are presented in easy-to-understand tables and charts. Additionally, "MPI Alerts" draw attention to critical decision points for the U.S. distribution industry. Highlights of Distribution 2008 include:

1. Warehouse employment levels continue to grow, but so does annual labor turnover as job openings spur employee searches for greener pastures.
2. The most widely adopted best practices in the distribution industry are continuous-improvement programs, benchmarking, and lean/lean-material management.
3. The top value-added activities performed for customers continue to be relabeling/repackaging, product returns, kitting, and light manufacturing/assembly.
4. International business is growing. A median 25% of respondents' materials came from overseas (average 36.7%).
5. About a quarter of facilities import 60% of their goods, and 84% import at least some percentage of goods.
5. Information-technology (IT) and capital-equipment spending is expected to continue rising. About 10% of managers said their IT spending would increase by more than 20%, and 11% reported that their capital-equipment expenditures would see a similar rise.
6. The three most common capital-equipment investments are lift trucks and related vehicles, facility remodeling/expansion, and storage equipment.
7. Healthcare costs continue to rise--85% of Census of Distribution facilities reported an increase in the past 12 months.

But managers say the top three threats to profitability are finding skilled labor, energy/fuel costs, and health of the economy. These and many other research insights await inside Distribution 2008. We hope you find the survey data and our analysis useful in meeting the challenges that face your distribution centers, companies, and supply chains.
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