The Mheda Journal

In preparing some headlines for wikiMHEDA today, I came across an interesting story from the Chinese website peopledaily.com. It is the online home of People’s Daily Online, whose tagline says, “Launched in January 1998, People’s Daily Online is a website built by People’s Daily, the official newspaper of the Communist Party of China.” I say that to pre-emptively say that I’m not sure how reliable the information I’m about to share is. China is not known for its open journalism. 

That being said, the facts stated in the story are interesting and may have some impact on industrial truck distributors and suppliers in the United States. The lead of the article states, “Forklift sales in China more than doubled in the first half of the year and are poised for further growth in the full year, industry experts said on Monday [July 19]. China will continue to lead the global market and the gap with US, the next biggest player, is set to widen further, they said.

“During the first six months of the year, domestic forklift sales rose across the 90,000-unit barrier, up nearly 113 percent from a year earlier.”

Two things strike me about this. One, that’s a hefty boost in sales. The article says it’s “forklift sales in China,” but it’s not clear if that figure accounts for only Chinese-made forklifts or imports into China as well.  Either way, that’s a pretty quick recovery and upward trend.

Second, it says the gap between China and the U.S. is expected to widen. While that doesn’t come as much of a surprise at this point, I’m hoping that is not the case. Here’s wishing that our domestic industry can rebound quickly enough to remain competitive, at home and abroad. Any thoughts on this? I’d love to hear from someone with more knowledge on the situation.

This is the second case of material handling in China I’ve written about in the last week. Check out the newly improved website for The MHEDA Journal and an article discussing the antidumping duty saga regarding wire decks.

As I have mentioned before in this space, the next issue of The MHEDA Journal (set to publish on July 15) recognizes Top MHEDA Dealers—those distributors who were honored by their manufacturers as a top-performing partner.

Earlier this week, I spoke with Mary Lou Jacoby, owner of warehouse1 (Kansas City, MO), a distributor of storage & handling products who earned Top Dealer honors from Tri-Boro Shelving & Partition Corp. Mary Lou had an interesting thing to say about how the poor economy impacted the market for allied products.

“Everything that we sell is made out of steel. As the market went down, so did the price of steel and, in turn, the price of new products. Therefore, revenue went down. If the price of new product was off 20%, then you could certainly expect sales volume to go down 20%. That was something about the year before that most people don’t take into account. In 2008, the steel market increased in price, so our equipment increased in cost. When you say your sales volume in 2008 was up 20%, really you were just breaking even because steel was up 20%. So for us, 2009 was down, but a part of that difference in revenue is based on the cost of the material.”

Most people, myself included, have thought about the economy in terms of a lack of customers with capital to spend and that’s why sales are down. Or, prices have been reduced by the seller in an attempt to spur sales. I hadn’t given too much thought to the actual cost of the item itself. Obviously, if that goes down, the retial price goes down, which impacts a distributor’s revenue. Thanks, Mary Lou, for the perspective!

The responses continue to roll in from MHEDA Members listed on manufacturer Top Dealers list. To add to my list from last week, here’s a couple more strategies from MHEDA members who were able to achieve some success in 2009, despite the down economy.

• “Our objective was to provide exceptional service and continue to build relationships with customers. Achieving that objective involved increasing our number of repeat customers, improving customer survey results, responding to customers’ needs during the initial contact, reducing the amount of required rework and overall improving processes.”
• “We directed our sales force to specific SICs and used the entire company to become regarded as a ‘valuable’ supplier for our customers. In short, we made it our business to understand our customers’ business and respond quickly to their demands. By doing so, we exceeded pre-set objectives for 2009.”
• “We began to look for industries that had severe pressure on them, such as building supplies and automotive, and tightened credit to those customers. It caused some angst, but it helped keep our bad debt expenses in line.”

As I mentioned last week, the July issue of The MHEDA Journal is chock-full of strategies from Top Dealers. I don’t want to leave anyone out, so if you won an award from your manufacturer, send me a message at editor@themhedajournal.org or leave a comment here to inform me!

Earlier this week, I sent an e-mail to every MHEDA Member who I know earned a “Top Dealer” award from a material handling equipment manufacturer in 2009. Now is the time of year when those lists start making the rounds, and once again, they are littered with MHEDA-member distributors. (If you won an award but did not receive an e-mail from me, that means I don’t know about it! Send me a message at editor@themhedajournal.org or leave a comment here to inform me!) It is our goal in the July issue to highlight some of those dealers who were able to acheive success in 2009 despite the conditions.

In the e-mail, I asked distributors how they did it? What was their strategy going into 2009? How did they implement it? How did they meet the award criteria? A smattering of the responses so far:

• “Our strategy was to keep all our salespeople and push service and units in stock for sale. We maintained stock levels in parts and rental fleet. We made ourselves a ‘one-stop shop’ by adding additional product offerings.”
• “We changed our sales force structure to an account management basis with each sales rep being assigned a minimum of 150 customers and target accounts. For each account, they developed their strategy to support the accounts. We provided incentives to our sales staff for doing new business, including equipment and aftermarket sales. We provided special service packages to our customers to assist them during these recessionary times.”
• “We simply listened to what customers needed to have done on their projects and made sure we met their goals with our finished prducts. We were not worried about meeting any special criteria, just stayed focused and kept everyone in the company busy.”

It’s all sound advice. Congrats to the winners, and I’d love to hear from even more of you! There’s still time. Now’s your chance to be included in the “How I Did It” issue of The MHEDA Journal, coming soon to your mailbox.

With the beginning of April comes the official start of the calendar’s second quarter, and I’m curious how business really is going out there. In our January magazine, we did our annual Industry Forecast  where we interviewed 50 MHEDA distributors about their expectation for the year. At that time (interviews were completed in October and November 2009), material handling distributors were cautiously optimistic about economic recovery, with 68% of MHEDA distributors expecting sales to increase in 2010. The average gain they predicted was around 6.5%.

Now that the second quarter is underway, what is the current outlook? Has it changed from what we found in our forecast? If so, why? If not, why not? I’d love to hear from you. Leave a comment with the answer to these questions: “Will 2010 be a better year than 2009? By how much? Why or why not?” If enough people respond, this could be an article in the next issue of The MHEDA Journal.

In today’s environment, things are constantly changing…so it’s good information to have. You can also send a response via Twitter at @liftmoveandstor.

Happy Easter and Passover, everyone!

Over the weekend, we passed the official first day of Spring (March 20). In addition to the long-awaited warmer weather and longer days, that also means it’s time for the Spring issue of The MHEDA Journal. It won’t be distributed until April 15, but we’re wrapping up production in the next few days and it’s fresh in my head.

This issue takes MHEDA’s Convention theme, “The Rules Have Changed” and runs with it. Eight distributors give in-depth descriptions of things they’re doing at their companies to illustrate how the Rules Have Changed and how they’re responding.

Bill Rowan of Sunbelt Industrial Trucks (Dallas, TX) talks about the tighter credit policies he’s implemented. Ken MacDonald of M&G Materials Handling (East Providence, RI) discusses the lean initiatives he’s installed at his company. Audie Burgan of J.M. Equipment (Manteca, CA) explains why they’ve decided to move into a larger facility in this economic environment. 

These are only a few of the headlines…keep reading the blog up through publication day to find out more ways that MHEDA Distributors are changing the standard rules of business.

Today is the first official day of March Madness, the annual three-week period when the NCAA crowns its men’s basketball national champion. It’s one of my favorite times of year, as office pools (if those were legal) come into vogue for the next few days and people talk about their brackets.

One of the things that gets the casual fan, not just the rabid college basketball follower, involved in March Madness is the expectation of “upsets” by the smaller, lesser-known schools and embracing the upheaval caused when these upsets occur.

For instance, already today, in the first four games of this year’s tournament, the underdog won two games, and the other two games went to overtime before the favored team won. You never know what to expect.

In some ways, “You never know what to expect” has been the prevailing attitude in the business world for the last 18-24 months. Since the recession started back in 2008, what used to be commonplace is no longer, and vice versa. Customers that have been counted on for years may now be closing their doors. “Madness” has not only been a figurative turn of phrase for some people during the last several months, unfortunately.

The good news is, the upheaval in March Madness is usually short-lived. Eventually, many of the teams that are expected to be around at the end will survive to make it there. Let’s hope the same holds true for those in the material handling industry in particular, and the business world in general. Let’s hope those who struggled to survive the early rounds of this recession are still around at the end.

Is “green” still a hot topic in material handling? A couple of years ago, it seemed that everywhere you turned, there was an article about new green technologies like fuel cells or LED lighting or something of that ilk. It doesn’t seem to come up as often anymore, so I’m wondering if it is a trend that has fallen by the wayside.

Green projects, for those who may not know, are those that are environmentally friendly, loosely synonymous with energy-efficient, alternative fueled, and/or able to be recycled. “To go green” was the oft-cited response to why customers should switch from IC to electric forklifts, or order a remanufactured part.

At the time, I’m estimating late 2007-2008, material handling wasn’t the only industry touting its green-ness. Automobiles, restaurants, manufacturers, and other businesses touted the benefits of reduced carbon footprints, natural ingredients and all that. I don’t hear about that as much anymore.

So here’s my question: Why? Have green projects been fewer and farther between now that everyone’s in a financial crunch (after all, green solutions often cost more)? Is green expected as a solution, so there’s no reason to market it that way anymore? Was that just a trendy marketing gimmick in the first place? Maybe I’m just not listening and the message is still there? Or another reason?

I’ll leave it to the experts.  What do you think?

Today marks the one-year anniversary of the passage of the American Reinvestment & Recovery Act (ARRA), commonly known as the Stimulus bill. Remember that?

One year later, has it stimulated anything? I’ve read many articles over the past 12 months about “shovel-ready” projects and highways and bridges and other infrastructure projects resulting from federal stimulus money. Did any of that bleed over to the material handling industry?

What has been the result of the federal stimulus for all of you out there? Particularly small businesses, how did the stimulus impact you?

As part of The MHEDA Journal’s Annual Industry Forecast, we heard from multiple members, both distributors and suppliers, that new products would help them get through the still-sluggish economy and drive new sales.

One such company is Nashville Wire Products, who is introducing Protect-it rack column guards. The press release reads, in part, “Protect-it strengthens Nashville Wire’s position by adding an additional rack accessory layer. Now Nashville Wire can provide an accessory for both its clients rack beams and uprights.”

This is just one example. As we get deeper into the first quarter, more new products will be unveiled. I can’t wait to see what else is out there!