The Mheda Journal

Dr. Bart Basi

In my previous blog posts this week, I neglected to mention that I attended Dr. Bart Basi’s Convention seminar on “How Changes in the Tax Laws Are Affecting the Business Owner,” and I must say, kudos to Dr. Basi for making sense of some pretty convoluted information. And I say that as someone who knows next to nothing about taxes, I’m embarrassed to admit. It’s just one of those topics that no matter how clearly it’s explained, I usually can’t decipher it. Dr. Basi, the senior advisor at the Center for Finanacial, Legal and Tax Planning, presented some really insightful information that will go a long way to helping those in attendance take advantage of the most recent changes in the tax laws.

It’s no wonder why, every year, small business owners talk about the tax burden as one of the biggest challenges they face in their businesses. The laws are too hard to figure out. Even Dr. Basi himself admitted that, while the changes are good for keeping accountants and attorneys busy, they’re too complicated for everyone else. In fact, he began his presentation by saying that he no longer is going to make printouts of his presentations because he is wasting paper by constantly making changes and printing out new versions so frequently.

One of the most compelling discussions involved how companies can qualify for a manufacturing tax credit. Even companies that aren’t logically considered a manufacturer can qualify for the credit based on how the law is worded. Apparently, any company that takes a good and significantly alters it to create a new product can be classified as a manufacturer for tax purposes. Starbucks, for example, classifies as a manufacturer under this definition. It takes a good (coffee beans) and significantly alters it (grinds them up) to create a new product (double mocha Frappucino, etc.) Doing so entitles them to a significant tax advantage. (I’m not going to attempt to explain it for fear I won’t do it justice, but call Dr. Basi and he’ll explain it to you.) He also said that many material handling distributors, particularly those involved in installation or assembly, could take advantage of this rule because they are technically altering the product.

I found that really interesting…just one of the many tidbits of information that you glean from a week at the MHEDA Convention.

Thanks to the MHEDA staff. Another great Convention!

And following that delicious breakfast burrito, another MHEDA Convention is in the rear-view mirror. And once again, I learned so much. This is my 8th MHEDA Convention, and I thought it was one of the best overall programs I’ve experienced. Kudos to everyone involved in planning.

It was great to see a lot of new faces in the crowd – 108 first-time attendees to be exact. It’s new perspectives from fresh minds that keep the material handling strong. Thanks also to everyone who helped with the MHEDA Convention Connection e-newsletters (check your inbox!) by contributing videos, photos and comments. We couldn’t have done without everyone’s help.

Hopefully I’ll see everyone again next year in Miami! Safe travels!

Brian Grubb

I’ve never stayed at a Ritz-Carlton. But, like most people, I am aware of the company’s world-renowned reputation for customer service. Today’s Convention program opened with a fascinating keynote presentation by Brian Grubb, corporate director of the Ritz-Carlton Leadership Center, who explained the ways that it got that deserved reputation. “We sell a product people don’t need,” he says, “We have to better than everyone else to retain our competitive edge.”

I thought one of his most interesting examples was the company’s treatment of its awards. Over the years, Ritz-Carlton has earned multiple service awards and recognition, the kind that most hotels have hanging very visibly in their lobbies for all guests to see. You won’t see those at the Ritz, which specifically forbids displaying such honors. “That represents the work we did yesterday. Our focus is on what we’re going to do tomorrow,” Grubb said. What an interesting way to operate. I can’t imagine many other companies thinking that way. Being honored is a good thing; after all, there are plenty of businesses that never get any sort of recognition at all. But Grubb’s point was that it’s too easy to get complacent if you become satisfied with achievements. Customers are too valuable and too easy to lose if you lose focus for even one second. Intense commitment to the present and future is the only way to make sure you’re in position to keep winning those awards and maintaining your reputation. 

Another interesting cultural element at the Ritz is, “The organization will never be what the employees are not.” In other words, to be successful, you can’t ask employees to conform to a culture unless that’s how they live their lives outside the office. If they’re not living the brand, then they’re not engaged and won’t do a good job serving the customer. Grubb was clear to point out that it all starts with leadership. Culture has to be implemented from the top down.

Finally, he talked about the three-tiered customer service pyramid. The bottom level is doing what the customer expects (i.e., having a bed in a hotel room). The next level is doing what the customer requests, (i.e., a wake-up call). Being able to achieve those two levels is not enough, though. At the Ritz, the baseline starts at the next level, what doing what delights the customer. “If you have to ask, then we have failed,” he says. It’s all about anticipating what the customer may want (i.e., having umbrellas out by the door if there is rain in the forecast) and delivering it. If you miss the mark, apologize and move on. Customers will respond.

I could go on and on, but I’ll stop here. Being the Customer Convention, I thought Brian Grubb’s presentation was really spot-on. It really drove home the point about customer service and how it can be used to achieve success. As he said, a great product is not enough. World-class service must co-exist. What do all of you think?

Know your customer. Ease their pain. That’s the extremely short version of the takeway from today’s Customer Panel. As this is the Customer Convention, it’s only appropriate that the panel was one of the show’s highlights. There was so much really fascinating subject matter that I’m going to have a hard time keeping this post short, but let me give it a shot.

Three end-users of material handling equipment – Rick Ellingson of Bargreen Ellingson, a restaurant equipment supplier; John Costa of AutoZone, the auto parts retailer; and Mike Pitts of home improvement center The Home Depot – fielded questions from moderator Duncan Murphy, president of Riekes Equipment Company (Omaha, NE) and a MHEDA Past President. The customers’ candid responses about what they expect from their material handling partners and how their vendors can help them achieve their own customer service promises were really enlightening about the customer-distributor relationship. This is my eighth MHEDA Convention, and this is the first time I’ve heard that relationship discussed at length. I found it to be really intriguing.

The three end-users touched on a host of topics, and I thought one of the most interesting ones was whether the end-users made their buying decisions based more on the manufacturer’s national brand reputation or the local dealer’s service capabilities. It was a split decision. “Brand is meaningless,” said Rick Ellingson. “A great local dealer and their service makes all the difference.”  Meanwhile, John Costa said both are equally important. “Big customers come with big requirements. We can be demanding” and both pieces have to be right for the relationship to be successful. I would love to hear what some of you think. You are customers of other businesses, so which is more important?

Another interesting topic involved how a supplier can make a good first impression to a customer. Simply put: “Know about my business,” said John Costa. He went on to say that too many people want to do business with him without doing their appropriate legwork first. There’s a lesson there for all you salespeople reading this. Mike Pitts said, essentially, that the supplier must be able to provide something new or it’s a waste of time, a sentiment echoed by Rick Ellingson who said, “We don’t seek new suppliers. We are extremely loyal unless the incumbent provider really screws up.” I thought that was interesting. No wonder cold calling is so difficult.

I could write several more paragraphs about this panel, but I’ll stop here. Really, really interesting stuff.

The Customer Panel wasn’t the only thing going on today. The Opening Business meeting featured a Lifetime Achievement Award for industry legend Howard Bernstein, and economist Barry Asmus explained the Six Unstoppable Economic Trends that are shaping America’s future. Then, the always-popular Exhibitors’ Showcase gave attendees the chance to interact and network with 93 of the industry’s best companies. We had a table to demonstrate wikiMHEDA, and a couple of industry newcomers found the collection of terms really valuable.

All in all, it was an eventful day. (Check your email inbox for the latest MHEDA Convention Connection to stay abreast of everything.) I’m looking forward to another busy day of education and networking tomorrow. Check back then!

Richard Donnelly enters on Frosty

On another gorgeous night in Phoenix, MHEDA’s Annual Convention got its official start with the country western themed Opening Party. As it usually is, the Opening Party served as a great opportunity Convention attendees to rekindle old friendships and start new relationships.

The event got off to a “bullish” start as Convention Chair Richard Donnelly, executive vice president of Gregory Poole Equipment Company, made his entrance on Frosty, a 2,000-pound steer. Not a bad way to travel. After that, the large crowd spent the rest of the night eating delicious barbecue, line dancing, playing casino games and, most important, networking.

I had several interesting conversations with members, including one with Steve Cline of Zurich insurance, who was talking about how the horrible weather throughout the country is going to have an impact on insurance rates, with the flooding and tornado damage, and how that may trickle over to business and liability insurance for MHEDA members. I also spoke to Shankar Basu, former president of Toyota Material Handling, U.S.A., Inc., who is now back in the industry on the distributor side with ToyotaLift of Los Angeles. That seems to be a trend, as another longtime manufacturer, Bill Hawthorne (formerly of Hytrol Conveyor Company), is back at Convention as VP of sales at distributorship Bastian Material Handling.

Of course, toward the end of the night, the big news spreading around the party was the breaking story of Osama bin Laden’s death at the hands of U.S. armed forces. Certainly added to making it all a memorable night.

Well it’s getting late here on the West Coast, so I better call it a night. Early wake-up call for breakfast at 6:30 tomorrow morning. A big day of keynote speeches and the Exhibitors’ Showcase awaits! Don’t miss the Convention Connection in your inbox! See you on Monday.

2011 MHEDA Golf Tournament Champs

Once again this year, the golf tournament will go down as one of the highlights of the MHEDA Convention. More than 100 golfers teed off on the Palmer Course at the hotel’s Wildfire Golf Club. It got a little competitive out there, but most of all, participants seemed to be enjoying the networking and the company of other material handlers. They were treated to a gorgeous day and sightings of all kinds of desert wildlife. I saw several signs warning about rattlesnakes, though I didn’t actually see one. (To be honest, I can’t decide if I wanted to actually see one or not.) When all was said and done, the team of Steve Johnson of Nashville Wire Products, Richard Andrews of Conveyer & Caster – Equipment for Industry, Neil Dixon of 3D Storage Systems Limited and Customer Panel Contributor John Costa of AutoZone, scratched out a score of 62 to take top honors, just ahead of four teams in second place.

Everyone looked to be having a good time, but it was more than just fun and games. Lots of industry business was being discussed out there, as well as within the confines of the hotel. A lot of that industry business revolves around what most attendees believe is an economy that’s finally on the rise. Granted, not everyone is convinced, as hiring at end-user companies is still sluggish. Lead times are also being impacted because suppliers are hesitant to add the personnel to fulfill orders, which remains an issue. 

Still, the material handling industry is full of renewed optimism. (We’ll see if economist Barry Asmus agrees in tomorrow’s keynote speech). In addition to improved attendance at the Convention (estimates put the final numbers at nearly 200 more than last year), talk of recovery is all around. Nate Andrews of Morse Manufacturing Company said that his company just completed the second-best month in the history of the 88-year-old company. He suggested that it was a sign that the economy is definitely rebounding, but he says there are still some concerns out there as companies are still reluctant to hire personnel. It was a sentiment echoed by Patrick Evans of Eagle Pneuamtic, who says the economy has definitely turned around and is looking forward to getting some confirmation of that from the distributors he speaks with at the Exhibitors’ Showcase tomorrow.

Speaking of the Showcase, I had a few minutes to peek my head into the room where it will be held (the Grand Canyon Ballroom) and it’s definitely starting to take shape. I saw at least one constructed mezzanine and a full-size lift truck on display. I’m looking forward to seeing what else is in there tomorrow.

For tonight though, we still have the Newcomers’ Reception and Opening Party. Check back later for updates from those always-popular events!

Well, Convention is fully underway now. Distributors and suppliers have been checking into the hotel all day long and this beautiful resort is really starting to take on a MHEDA feel now. This morning, I had several nice conversations with members of MHEDA’s Board of Directors, who kicked things off with a bright-and-early meeting at 8:00. It was nice to meet several of their wives and families who are along for the trip.

New technologies even impact the walking tour. A Segway tour was a highlight of Day 1's events.

It’s still only the first day and I’m already finding out a lot of the industry hot topics. One hot topic of conversation was the sighting of NFL star quarterbacks Peyton and Eli Manning, who were supposedly on site this morning to speak at a different group’s meeting. I can neither confirm nor deny those rumors; I didn’t see them, but some Board Members said they did.

Beyond that, one of the biggest themes of the conversations I’ve had with members is about how new technologies are impacting the industry. In addition to social networking, MHEDA manufacturers are starting to do a lot more to cater to users of mobile devices. At least two forklift manufacturers are in the process of building iPad apps to capitalize on the growing number of distributors and customers that are using iPads. The Web is still a growth area for a lot of members. In fact, Louis Coleman of Autoquip stopped by to do a video and informed us about all the hard work that has gone into a revamp of his company’s website. It’s just about completed and it’s more application-focused rather than strictly product-focused.

My colleagues and I spent much of the morning shooting MHEDA promotional videos in which distributor and supplier members are talking about the value of MHEDA membership, participating in MHEDA education, attending Convention and networking with other members. It’s really been interesting to hear what some people have to say and watch as members new and old continue to build relationships with each other. It’s, as always, fun to watch.

Tomorrow morning, MHEDA members will receive the first of four daily MHEDA Convention Connection e-newsletters in the inboxes. Stay tuned to the newsletter, to this blog and to that of my colleague, Steve Guglielmo, and our Twitter feeds (@liftmoveandstor and @MatHandlingEdge) to keep apprised of what’s happening here in Phoenix. We’d love to hear what you all have to say!

Well after a bit of an airplane snafu, here we are at the Marriott Desert Ridge in Phoenix. Only about 4 hours behind schedule, but better late than never, as they say.

What a great spot. I can already tell that this is going to be a great MHEDA Convention. I ran into Steele Solutions’ Kevin O’Neill and eliftruck.com’s Art Arellano downstairs and judging by the attendees list, it looks like quite a few MHEDA members are already on site. Convention doesn’t officially start until Saturday morning, and I can already feel the excitement in the air. Part of it may have been the cool sight of about a dozen rabbits hopping around in the courtyard outside our window. Don’t get that every day in Syracuse.

It’s been a long day. I’m off to eat a quesadilla and head to bed, but I’ll be updating with more once things really get going. We’ll be shooting videos about the value of MHEDA membership tomorrow morning, so find me by the MHEDA registration desk to participate! See you tomorrow!

JW Marriott Desert Ridge Resort & Spa

Well, tomorrow morning we leave for Phoenix, Arizona, for MHEDA’s 56th Annual Convention & Exhibitors’ Showcase at the JW Marriott Desert Ridge Resort & Spa.

I had the opportunity to speak with a different kind of MHEDA distributor this week, at least different than what I’m used to. I spoke to Vince Sullivan, president of Southern Acquisitions in Dallas, Texas, a distributor of loading dock equipment and overhead doors. No forklifts, no conveyors, no racking. Just dock and doors. It’s a fascinating company, with 10 locations spread from Texas to New York. There’ll be more explanation in The MHEDA Journal’s third quarter issue, but I wanted to talk about one thing in particular that Mr. Sullivan mentioned. It goes along with the whole theme of customer service that MHEDA is focusing on at its Convention next week. (Only 3 days away…how’d that happen?!)

“Every week, we say to our people: ‘I didn’t see too many people lining up on our doorstep today to give us a lot of orders, so I guess that means we have to go out and hustle to find them.’” What a great way to motivate people. If customers aren’t coming to you, then you need to go find them and serve them the best you can.

During the downturn, one thing MHEDA members talked a lot about was how it was a wake-up call to a lot of poor tactics and gave them a chance to streamline their operations. But the question, they said at the time, was how long it would take to revert to bad habits when things picked up again. It’s easy to be diligent when times are rough, but if sales are coming more easily, it’s hard to motivate yourself to do the little things. However, with motivational tools like the one above, at least one MHEDA distributor is fighting to make sure those bad habits don’t creep back in.

What are some other ways to ensure good habits? I realize that many of us aren’t yet back to what can be termed “good times” just yet, but if we don’t pay attention to the little things now, they’ll be harder to correct later. So, what do you think?