The Mheda Journal

After weeks of preparation, the First Quarter 2011 issue of The MHEDA Journal is now available online and being mailed to subscribers today. This was a challenging issue, mostly due to the breadth of our Annual Industry Forecast. We talked to dozens of material handling equipment distributors and suppliers in all segments of the industry to find out what their expectations are for 2011. You can read their full forecasts here, but the quick version is that 2011 should be better than 2010.

In addition, this issue also tackles issues like merging five independent companies under one brand, industry consolidation, niche marketing for distributors and much more. Meet the members of the 2011 MHEDA Board of Directors, including an in-depth profile of new MHEDA President Chuck Frank and his company, AHS Inc.

All this and more is in the First Quarter issue, housed at www.TheMhedaJournal.org, which will continue to be updated throughout the quarter with breaking member news, new feature articles, executive dialogues and more. We’re currently hard at work on our second quarter issue, which will be focused on MHEDA’s Annual Convention. I hope you enjoy this issue and hope to see you at the Convention in Arizona!

As 2010 comes to a close, we at The MHEDA Journal are already trying to get a head start on 2011. We’re brainstorming article ideas and calling members to find out the hot topics that are out in our industry that we should be writing articles about. (The list isn’t complete yet and we’re updating it all the time, so if you have any topics that you think MHEDA Members would gain value in reading about, let me know by leaving a comment below.)

One idea I did find intriguing came from a manufacturer of overhead cranes who I spoke with last week. (I’ll withhold the name for now since he doesn’t know I’m talking about him.) The topic was also broached my some distributors in our 2011 Industry Forecast (coming soon – look for it in January!), so I’m pretty sure it’s worth discussing in further detail.

The gist of the topic is this: How has the role of a distributor changed in the end-user’s eyes as a result of the downturn? As the manufacturer I spoke with said, “From an end-user’s perspective, they’ve hired distributors to do stuff, but my observation is what they hire them for is different now than it was five or six years ago. I think distributors are getting sharper and clearer about what exactly their customers are hiring them for.

He continues, “If I’m a distributor salesperson, I am a consultant. If I called myself a consultant, you’d pay me an hourly fee. But I don’t get paid an hourly fee, what I get is a commission basically if you buy my idea. I see end-users that don’t really recognize it for that. They put mileage on distributors for ideas and then they take those ideas and shop them all over the place. It’s gotten to the point where some distributors say, ‘I’m not going to go out to XYZ customer and specify all the equipment and then get my price hammered down because it’s not worth my time.’ But I think the issue there is what an end-customer is really hiring a distributor to do and I think it’s different than before. I think that end-users are hiring distributors to do way more things than just sell equipment these days.”

What do you think? Has a distributor’s role changed? If so, in what way? As I mentioned, we touch on this topic in our upcoming Industry Forecast, but if I get some feedback, then maybe we can turn it into a longer article. Any help you can give is appreciated!

I know the “What Are You Thankful For” column is a bit of a cliché this time of year, but I think this year especially, it’s worth asking the question. Before I get too far into it, though, let me say thank you to all of the MHEDA member distributors and suppliers who took time out of their schedules to help us out with all of our publications this year. Special thanks to the MHEDA Board, particularly 2010 President Greg Morrison, and the MHEDA staff for taking more time than most to make MHEDA Media a success in 2010.

But enough about us. What are you thankful for this Thanksgiving? I didn’t do a formal survey or ask this question to members directly, but based on responses I received to the 2011 Industry Forecast (look for it in the next issue of The MHEDA Journal!), I was able to cobble together a list of things that distributors are saying “Thank You” for. 

1. A rebounding economy. Optimism has returned to material handling for the first time in a couple of years. 
2. Loyal customers. Obviously, loyal customers are important in any economic cycle. More than one distributor, however, said that purchases from one or two specific customers saved their cash flow and got them through the downturn.
3. Quality employees. Again, always a good asset to have, but amplified even more now. People are being asked to do more with less, and it’s a tribute to their work ethic and capabilities that companies are still able to compete.
4. Niche markets. Even during the downturn, there are certain markets (food, beverage and pharmaceuticals seemed to be the most often-cited) that were still spending. Concentration on such markets helped several members survive losses elsewhere.
5. Industry partnerships. Relationships with quality vendors, industry peers and organizations like MHEDA have distributors confident in the industry’s ability to return to the output of a few years ago.

I’m sure there’s plenty more out there that I missed. So, I’ll ask you: What are you thankful for this Thanksgiving? Enjoy your holiday, everyone!

When I spoke with a MHEDA Supplier/Associate member a few weeks ago, he expressed some interesting ideas for ways for distributors to make inroads into profitable industries within their territory. IN down times, he reasons, it’s a waste of resources to beat willy-nilly on doors to get sales because most people aren’t spending money. The key word there, he mentioned, is “most.” As in most people aren’t spending money but some people are.

For this person’s business, and for now let’s just refer to him as a provider of pallet rack systems, sales were still good within certain niches—food, beverage and pharmaceuticals. “If I was a distributor,” he says, “I would definitely make a sales plan by niche market.” In other words, focus your sales resources on those areas where people are still spending money. It seems like a pretty simple, straightforward idea, but he lamented that many distributors he knows of don’t approach it that way and he couldn’t figure out why.

Take the food and beverage industry for example. One distributor he knows of built a separate website specific to the work they have done in the food and beverage market, complete with customer testimonials, product and list of end-users who have seen success with their products. Market that website to other similar customers, he says, and that could be a pretty simple way to drive some more business.

He also floated the idea of a distributor holding a “lunch and learn” event for all the beverage distributors within a given territory, or attending or exhibiting at a beverage-industry-specific trade show. “I’m just not sure a lot of distributors and integrators are aware of these avenues,” he said.

It’s an interesting strategy. What do you think? Would that work for a distributor? I’m sure lots of people already do this, and I’d like to hear about it. Anybody out there tried it? Leave a comment with your examples and I’ll use some of your best suggestions in an article.

After weeks of preparation, The Fourth Quarter 2010 issue of The MHEDA Journal is now available online and being mailed to subscribers today. This was a challenging issue, mostly because it’s so full of a wide variety of information.  This issue features a “Spotlight On Sales Success” and includes a collection of Sales Success Stories from material handling equipment distributors. Sales Success Stories are case studies of unique material handling equipment applications installed by MHEDA members.

In addition, this issue also tackles other sales and marketing topics of interest to material handling companies, including using vehicle wraps as a marketing tool, the importance of proper pricing strategies, identifying the personality of top salespeople and how to achieve sales success on the Internet. 

This issue also features a section devoted to forklift tires. Distributors and manufacturers discuss the complexities of the tire market and the impact of new competition. Learn how one distributor uses tires as a way to break into previously unaccessible accounts. If that wasn’t enough for one issue, MHEDA members also explain how to create an effective social media policy at one’s company and discuss how to implement culture change after an acquisition.

All this and more is in the Fourth Quarter issue, housed at www.TheMhedaJournal.org, which will continue to be updated throughout the quarter with breaking member news, new feature articles, blog entries and more. Take some time to peruse the new-look website, which allows for more frequent updates and better reader interaction.  

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.

It’s been a busy week, gathering up the final materials for the October issue of The MHEDA Journal. One article that I think MHEDA members will find extremely interesting is an article about best practices distributors are using regarding social media. Loyal blog reader Josh Smith of AK Material Handling Systems put together a few things that are working for their company. Another distributor, Lori Cooney of Maybury Material Handling (East Longmeadow, MA), added a few notes about what her company has found successful on Twitter: 

“We’ve decided to groom a team of five individuals who are comfortable with technology and the Internet and who also are ambassadors for the company. Each person has one day during the week when they are responsible for updating and monitoring our company Twitter account (@MayburyMaterial),” Cooney says. “It’s no one’s single job function—they’re managing multiple tasks in addition to Tweeting like accounting, billing, parts sales, and customer service.”

She has some other interesting strategies in the article as well, including how they come up with subject matter for their tweets, but I thought the team approach was interesting. A lot of small business owners are afraid to dive into social media because they don’t want to take their people away from revenue-producing tasks at the company. Frankly, it’s a legitimate concern. Especially in a down economy, people need to be focused on what they do best. But dividing the task among a committee, training people to be “ambassadors” for the company mitigates that concern, while also getting more employees familiar with the technology. Let’s face it, it’s not going away any time soon. So your employees may as well embrace it.

It’s a Summer Friday, so I thought I’d take a cue from my colleague Dan Vest and post something a little more fun today. Pallets have been in the news for many of the wrong reasons in recent weeks, but I ran across something that may help the wooden shipping pallet restore its image a bit.

Apparently, it’s common practice in Austin, Texas, to build houses out of shipping pallets. (See the photo, below left.) According to the website apartmentthearpy.com (that’s where the photos are from, too), these shipping-pallet houses were created by the architecture firm I-Beam, and “designed as temporary homes for refugees.” Advantages are they can be easily assembled and taken down and can be built with a wide array of features (see flower box in the second photo). I’m guessing price is also a huge advantage. Disadvantages include, well, living in a house made of shipping pallets. As the site says, “While a bit drafty in this incarnation, the houses can be made into more permanent dwellings using local materials like mud and adobe.” Good to know. 

Have a great weekend, everyone. Don’t forget to visit the new online home of The MHEDA Journal Online!