The Mheda Journal

Last week, I reported the closing of Excel Storage Products, a racking manufacturer in East Stroudsburg, Pennsylvania. Since then, the company has become embroiled in multiple legal proceedings, which I won’t go into too much detail about here. I’m not a lawyer. Click the links in this article, including this one from the filers of a class-action lawsuit, to learn more about the legal side of things.

I’m more interested in the business side of things. I spoke to Joshua Smith, director of sales operations at AK Material Handling Systems (Maple Grove, MN), a distributor who did business with Excel Storage Products. Smith says, “It’s a sad story what happened to the employees and Excel. Stay tuned, as more is going to come out of the woodwork.” He didn’t elaborate, but he’s probably right. We definitely haven’t heard the end of this story. How will distributors like AK continue to be impacted by this closing? Smith says, “We will continue to offer the same quality product and take care of our customers that may have been impacted by this change in any way we can. We are very happy with the remaining manufacturers offering to help in anyway they can.” The show must go on, as they say. As most distributors in his position would be, Smith was careful to remain positive. “We had a wonderful relationship with the Excel family, and we will miss working with them. We wish the best for them in any new venture.”

Thanks to Josh for his comments, and I’ll keep writing about this topic as I learn more details. If anyone else hears anything first, please leave me a comment or send an e-mail to editor@TheMhedaJournal.org.

As a 2001 graduate of The College of Wooster, I always get excited to see my small liberal arts college in the news. It’s even better when that news intersects with my work in material handling, albeit tangentially.

On Monday, September 20, The College signed a contract with Carbon Vision LLC to install a 20,000 sq. ft. solar roof atop the Scot Center, the new student recreation and facility currently under construction on campus. It will be the largest solar rooftop installation of any college facility in the country, generating 271,000 kilowatt-hours of electricity annually, enough to power a residence hall for the year.

Granted, that has little to do with material handling. But it does remind me that the green movement is still in full force out there, and material handlers and warehouse integrators should still be aware of it. Many articles say that the higher cost of green projects will keep customers from going the more environmentally friendly route, but that is not necessarily the case. Sustainability is still important to many customers, and as the economy improves, they will be willing to pay for it. I’d love to hear any suggestions you have for taking advantage of the green movement in material handling, particularly as money remains tight. Thoughts?

Excel Storage Products, a manufacturer of pallet racks and storage systems, closed up shop on Friday, September 17. According to local sources, the closing was abrupt and employees were given no advance notice of the closure until showing up for work that day.

Since then, the company has submitted a letter to the Pennsylvania Department of Labor indicating that it is “permanently shutting down.” Union officials from Laborers Local Union 108, which represents dozens of Excel employees, succeeded in getting an injunction in federal court on Wednesday, September 22, to prevent immediate liquidation of the company into a receivership.

While many of the local newspapers and television stations I’ve been able to locate are focusing on the plight of the employees, they are not the only ones impacted. Distributors who sell Excel products, companies that supply Excel and customers who are using Excel products are all now left to bear the brunt of the fallout. At least one MHEDA member that I know of—and I’m sure there are plenty more—has spent the better part of this week scrambling to get replacement equipment from other rack manufacturers to finish existing orders. One of the newspaper articles quoted one of Excel’s suppliers as being owed $20,000.

I realize that companies close down all the time, but this instance is particularly jarring, coming on the heels of the company’s recent acquisitions of Prest Rack in South Dakota, Lodi Metal Tech in California, and W.C. Cardinal in Ohio. The W.C. Cardinal transaction just happened in June. It’s hard to believe that a company with the ambition and resources to buy three companies in just a few years can suddenly be so far behind the 8-ball that it must immediately shut down.

Is there something more going on than just another casualty of a substandard economy? Calls to Excel headquarters went unanswered, but I am curious to find out what MHEDA members have to say. If you have an opinion or any insight, please feel free leave a comment or contact me at editor@TheMhedaJournal.org.

So the material handling industry is at it again. Another large company has been acquired. Over the last couple of years, the mergers and acquisitions bug has impacted all segments of the industry, be it forklifts (MCFA/Jungheinrich), conveyors (FKI Logistex/Intelligrated), storage & handling (Excel Storage Products/W.C. Cardinal), batteries (EnerSys/Douglas Battery) and more. And it hasn’t only been in manufacturing. Distributors including Riekes Equipment, Arnold Machinery, Alliance Material Handling, Briggs Equipment, MH Equipment and others have been in the pages of The MHEDA Journal for acquisitions in the not-too-distant past.

Then yesterday came word of the latest move, as Canada-based Camoplast Inc. announced its acquisition of the Solideal Group, worldwide manufacturer of industrial tires. Read the full press release here. As the press release states, “The Camoplast Solideal combination will create a world leader in industrial tires, rubber tracks and undercarriages with a strong presence in construction tires and wheels.” As always, time will tell how this shifts the balance of competitive power in the industrial tire market, but it’s clear that this creates a large player.

What do you think? How will this acquisition impact MHEDA members and the material handling industry?

In talking with MHEDA members, you never know what you might learn. In the course of talking to one MHEDA distributor about a completely unrelated topic, we somehow ended up talking about the ever-present issue of profit margins for distributorships. I didn’t tell this person I would use his comment, so I’ll keep him anonymous for now. But keep your eyes and ears open for an upcoming article on this topic.

“I have been talking with a lot of dealers, and with volumes of new equipment off, some have severed reduction in service and parts billings. It made me wonder how the different dealers have measured their results, adjusted, and how they maintain fiscal health when in the high-volume days they could manage lower margins. Do they now feel that margin must improve for lower volumes?” said this distributor. Well, that’s a good question. What do you think? How can distributors combat tight margins when they can’t make it up in volume?

He continued, “Do they measure mechanics’  productivity? If so, what have they changed as a result? How are they measuring vehicle cost and what have they changed as a result? How do they measure service dollars per square foot of their buildings?” These are all interesting ideas that, frankly, had never crossed my mind. That’s why we at The MHEDA Journal rely on you, the MHEDA membership, to tell us what’s going on out there. As for the answers to this distributor’s questions, be sure that I will seek them out in our First Quarter 2011 issue. I’m curious to find out what is going on in the market out there when we do our Annual Industry Forecast. Stay tuned….

Before it gets too far in the rearview mirror, I wanted to take a moment to remember the tragedies that occured in New York City, Washington, DC, and a field in Pennsylvania on September 11, 2001. As we passed the ninth anniversary of those events last weekend, it reminded me that our industry, the material handling industry, played a significant role in the aftermath and cleanup of the World Trade Center. The First Quarter 2002 issue of The MHEDA Journal (unfortunately, this article isn’t available online) outlined a few of the many inspirational acts that MHEDA members made in the days and weeks following the attacks.

• MHEDA staff worked diligently to coordinate hundreds of calls to the office by members who wanted to help. They found an organization who accepted donations directly to help the relief efforts, and donated pallet jacks and more poured in via the Feed the Children charity.
• A conveyor was set up at the Fresh Kills landfill on Staten Island to help sort through debris being remvoed from Ground Zero. This is, of course, in addition to all the equipment and supplies being used at the scene.
• 2007 MHEDA President John Cosgrove, was a volunteer firefighter in his hometown of Fair Lawn, NJ, about 15 miles from Manhattan. The morning of the attacks, his unit was designated as a “task force” and he reported to his fire house. His house was never called, but it was an experience he won’t soon forget.

These are only a few of the ways that our industry rallied in the days that followed. Thank you to everyone who helped and our prayers remain with those who perished. God Bless America.

A

RFID tag

To continue on the back-to-school blog theme for the second straight post, I ran across two more interesting uses of radio frequency identification (RFID) technology beyond efficient warehouse operations. A school district in California has proposed attaching the tags to preschool children to keep track of their whereabouts at school. While I understand the importance of not letting kids wander off, it seems a bit much. According to a New York Times editorial, the school district claims the tags are simply to eliminate attendance paperwork and pay more attention to teaching. A noble goal, but it seems a bit much. 

In a less invasive and more practical application, a school district in Illinois is using a RFID-GPS technology combo to monitor when and where students get on and off school buses. The children are issued ID cards that attach to backpacks and an electronic “reader” is located near the front door of the school bus. The date, time and location is coupled with the child’s name when a student enters or exits the bus. That information is transmitted in real time to a secure database at each school and the superintendent’s office. Knowing if, when and where a student got on or off the bus accounts for a significant portion of calls parents make to schools. This, it seems, is actually a good use of the technology. Particularly considering an acquaintance of mine whose child recently missed his stop on his first day of school and a brief panic ensued when he didn’t arrive on time. What do you think? Are these good uses of RFID technology?

It seems there is no end in sight for uses of RFID technology. It’s come a long way in just a few years. What else is out there? Where is RFID headed?

It’s back to school time, so now seems like an appropriate time to congratulate the winner of MHEDA’s annual scholarship, LaDarius McEachin.

McEachin is a senior studying for a B.A. in Industrial Distribution Logistics at East Carolina University.  He says that working in a factory in his hometown “opened my eyes to many different concepts of how one should value their education and how to plan out the proper steps in securing a successful role in the working world.” He is active in several campus programs, including the Professional Association of Industrial Distribution, the Institute of Supply Management, the American Society of Operations Management, and more. Congrats to LaDarius.

I don’t know how many of you are aware that MHEDA sponsors a scholarship each year. The Material Handling Equipment Distributors Association Honors Scholarship is awarded through the Material Handling Education Foundation Inc. (MHEFI). According to MHEDA’s website, “MHEDA’s Industry Advocacy Committee has established a scholarship fund to further the awareness and recognition of the material handling industry within the academic community. Each year, it is awarded to a worthy student enrolled in an industrial distribution curriculum.”

It’s certainly a worthy cause. I know in my days as a college student, any help I could get was appreciated, particularly if it came from the industry I planned to work in. Not that I was worthy of any such things, but that’s another discussion for another time.

This is just another way that your MHEDA membership dues are helping support your company and your industry. It’s a good reminder as we send kids back to school.

With Labor Day weekend this weekend comes the unofficial end of summer for many of us. Kids are headed back to school, parks are closing down and weather is taking a turn for the cooler.

Summer certainly was a full one this year, especially for those of us in the material handling industry. The highlight for us here at The MHEDA Journal was the redesign of the website you’re currently reading this blog on, www.TheMhedaJournal.org. The launch coincided with our Third Quarter publish date on July 15. The Third Quarter issue, you may recall, featured MHEDA distributors who were able to earn Top Dealer status during 2009 despite the less-than-stellar economic conditions.  

MHEDA was also busy, making changes to its Career Center and holding its usual array of webinars and educational sessions. MHEDA members were busy hiring, expanding, merging and improving their companies as well. After the last couple years of dark clouds, the consensus seems to be a lightening of those clouds as we round out the year and push to 2011. Best of luck to everyone out there in doing so.

Happy Labor Day and enjoy your long weekends!

So it’s September already. How did that happen? I’ve been immersed in preparing the Fourth Quarter issue of The MHEDA Journal, and time has been rolling along at a pretty good clip.

Speaking of rolling, one of the articles I’ve been working on is an analysis of how forklift tires reach the end-user. So far we’ve come up with 10 different paths. 10! It’s a much more convoluted market than I had anticipated. I’ve talked to several tire manufacturers, a few forklift distributors, parts departments and more to get as many perspectives on this interesting and often overlooked aspect of the material handling business as possible.

One person I spoke with was Mike Sain at Material Handling Inc. in Nashville. Mike’s company had a long history of providing tire service before getting out of the business about 15 years ago. Within the last year or so, he has gotten back in thanks to some help from his forklift manufacturer. Mike says, “We’ve used our tire service as a door opener into some large target accounts. We’ve worked deals with some local fleet users who previously weren’t using our trucks, service, parts or rental, but were unhappy with the local tire guy. We went in and offered better tire service. We delivered, and that has led to business in other areas of our company.” Read more of Mike Sain’s comments in the upcoming issue.

I’m still trying to round up some info on the market, so if you have any inside details about the forklift tire industry, let me know.