The Mheda Journal

Last week I was talking to an industrial battery charger manufacturer who wishes to remain nameless, and we started talking about ways to replace revenue that was lost in the recession. This person told me about a scenario that exists in the battery and charger market that I was unaware of, and he had some pretty strong feelings about what it means for his business and the industry.

 “A couple of years ago, we were approached by a lift truck manufacturer to private-label a charger for them that they could put their name on and sell it through their parts catalog. We talked to our distributors, who said ‘We’d rather fight them out on the street than just have you sell direct.’ Therefore, we declined, but the manufacturer found a French partner, who produced an SCR charger for them with their name on it that they sell as a package with their lift trucks. This was the first time that we had seen one of the major lift truck manufacturers get into the battery charger business.

“At the time, this manufacturer said they were doing it because they need to replace revenue that was lost when new truck sales dropped during the economic downturn. That’s probably true, but I don’t see them stopping now that they’ve developed it and have been moderately successful.”

For distributors, this situation has created a bit of a dilemma. The biggest thing is, it creates a competitive environment, not just between the charger manufacturers like us and the lift truck manufacturers, but also amongst distributors. For a long time, independent battery and charger dealers had the local lift truck dealer as one of their largest customers. Now, if more lift truck dealers are forced to sell what I’m going to call “proprietary” batteries and chargers, that creates some major competitive issues.

At first, it was optional—the distributor could still sell whatever charger they wanted. Then it became mandatory to sell the proprietary charger. Some distributors found ways around it, but in many cases, the charger distributors felt like they were competing with the lift truck dealer. Conversely, the truck dealers were reluctant because they knew they had customers who didn’t want this new charger. They also have long-term relationships with the charger company’s salespeople and distributors. They work very closely, and a lot of them didn’t really want to see that relationship damaged.

If nothing else, it’s caused some changes and uncertainty in the distribution channel. Rumor is that at least one lift truck company has already made a similar request to the battery manufacturers, meaning “proprietary batteries” could be next.

If this does prove to be a viable revenue source for the lift truck manufacturers, it’s only going to become more common. What will this mean for distributors?

I’ve heard for a long time about the impact that proprietary forklift software has on the industry, but this was the first I’d heard of proprietary forklift chargers. I’d like to hear from you. How prevalent is this? What does the future hold?

Lift truck safety is one of those topics that, no matter how much you cover it, is always relevant, for reasons including (but not limited to) lost productivity, equipment and product damage, employee injury potential, regulatory compliance and customer satisfaction and much more.

That’s one reason why I’m looking forward to working on our 3^rd Quarter issue. Now that the April magazine is being mailed out, I can jump with both feet into the July issue. One of our features in the upcoming issue will be about safety. I sent an e-mail around to the MHEDA-NET safety group, a networking group made up of safety and compliance officers at member companies. I asked them to let me know what safety topics are hot issues in the material handling industry right now. David Hermann of Wisconsin Lift Truck (Brookfield, WI) replied with one of the most interesting responses.

In addition to giving me several topics to consider exploring in our safety issue, including the susceptibility to injury of an aging workforce, lack of qualified training and disdain of seat belt laws, Hermann also had this to say:

“Training is my favorite topic. It allows us to help people appreciate how important they are. Their lives are too important to not invest in wearing a seat belt. Their eyes are too important to not wear safety glasses. Training is a great place to set the stage to help people understand these priorities.”

I found “helping people appreciate how important they are” to be an interesting perspective.  Often when talking to distributors about safety, the talk shifts to lost man hours or lost-dollar prevention or even government funding, which certainly are important aspects, but I have never heard it articulated quite this way. Letting people know how important they are, and the role they play in maximizing the company’s bottom line in respect to those man hours, cash retention and grants, can go a long way toward employee satisfaction.

They say informed employees are happy employees. Ultimately, informed employees are also safe employees, meaning it’s the employer who can reap the benefits.

I’d love to hear any other safety solutions or philosophies out there. Leave me a comment or reply to editor@themhedajournal.org.

At long last, the Second Quarter (April) issue of The MHEDA Journal is back from the printer and being distributed to MHEDA members. Those of you traveling to upcoming material handling equipment trade shows can also pick up a copy at NA2010 in Cleveland in two weeks or at the MHEDA Annual Convention & Exhibitors’ Showcase next month.

This issue plays off the MHEDA Convention’s theme of “The Rules Have Changed,” and is chock-full of articles from distributors about how they’re changing the rules at their companies to drive profits. See how M & G Materials Handling (East Providence, RI) President Ken MacDonald has improved productivity by implementing 5s procedures. Read how Bill Rowan, president of Sunbelt Industrial Trucks (Dallas, TX), has instituted more strict credit policies to ensure better cash flow. Learn what Ted Springer, president of Springer Equipment Company (Birmingham, AL), is doing to diversify his product mix, and many more!

This issue also features articles from speakers at the Annual Convention, on topics from marketing to sales intelligence to thinking creatively and more. So even if you can’t make it to Marco Island, you can still receive some of the benefit by taking a look at this quarter’s issue.

It’s all available online now and is being mailed to subscribers this week. I’d love to hear your feedback. Leave a comment here or send an e-mail to editor@TheMhedaJournal.org. Thanks for reading!

I was on vacation for a few days last week and spent some time cruising around Southern California. I had been there before but always had a destination and a reason in mind, and never really took any time to explore beyond my immediate destination.

This time, though, I had some free time to relax and soak it all in. Looking back on it, it’s amazing how much material handling I saw, really in every way. Traveling around Long Beach, i saw the port filled with huge barges loaded with hundreds of shipping containers. I saw cranes and hoists being used to unload those ships.

I saw forklifts in action, at every size business, from a tattoo parlor in Venice Beach using a truck to unload what looked to be large ink canisters, to the Hollywood Walk of Fame using one to haul some new granite for a new sidewalk star (I think it was Russell Crowe’s), to a shipyard in San Diego.

I saw industrial storage rack in the place where we picked up our rental car, and I saw conveyors both at the airport and at a cruise ship boarding station we rode our bikes past.

Most people don’t know it, but material handling is everywhere! Making that awareness more prevalent is the purpose of MHEDA’s Industry Advocacy committee, and the good news is, they have a lot of material to work with. Even on vacation, I can’t escape it!

One of my colleagues was out today, so I took over the duty of finding news headlines to post on wikiMHEDA (you do know what I’m talking about, right? Every day, we post three industry-related headlines on our wikiMHEDA site. Read today’s!) In searching through the dozens of news stories that feature words like “material handling,” I came across news about a member.

I elected not to post it on the headlines because it’s a few days old at this point, but I did find that it warranted a mention. Cat Lift Trucks is the official lift truck provider for the Houston Livestock Show and Rodeo. As part of that, Cat hosted an event for the Big Brothers and Big Sisters. And a good time was had by all. Congrats to Cat for backing such a worthy cause.

My question: Can someone tell me what that mascot is supposed to be? Any help out there?

(The photo is from the blog at http://www.ultimatealdine.com.)

photo courtesy of Plug Power Inc.

I had the pleasure to interview Warren Brower, product marketing manager at Plug Power Inc., a Latham, NY-based manufacturer of hydrogen fuel cells, last week. Mr. Brower was fomerly the marketing manager at Raymond Corporation and joined Plug Power in 2007.

I knew a little bit about hydrogen fuel cells before speaking to Mr. Brower, but now I feel like almost as much of an expert as he is. (I’m not, though…not even close.)

One of the things I found interestng was the go-to-market strategy for his company:

Our intention is not to go out and replace every lead-acid battery out there. We understand that a hydrogen fuel cell is not for every application. The key with fuel cells is to focus on specific applications and specific opportunities in high-volume and high-throughput applications.

Such a strategy is important for distributors to know. Do you have customers out there who are eyeing this technology? Do they fit the “high-throughput” description. If not, they may not be a good candidate for hydrogen fuel cell forklifts.

Another interesting excerpt from our interview:

You’re going to see other applications start to surface where fuel cells make sense instead of using diesel generators, backup lead-acid batteries or whatever. So I think in the next couple to three years, you’re going to see a major push within this field.

So, apparently we’re just scratching the surface with this technology. Although it’s been “a few years out” for more than a few years now, it’s something to continue to keep an eye on.

Anybody out there doing anything interesting with fuel cells? I’d love to hear about it!

In speaking with Audie Burgan, president of J.M. Equipment Company (Modesto, CA) earlier this week, I learned about an interesting method of parts distribution that his company is implementing. As part of their consolidation of two facilities into one, they have decided to take consignment inventory to the next level by setting up a series of “drop boxes” throughout their territory where customers can drop off and pick up parts.

I don’t know about you, but I’d never heard of this before and found it more than a little intriguing. Customers would be given a key to an 8×8x8 construction worksite-like box that would be stocked with certain parts. As needed, customers can leave and retrieve parts. Twice a day, a J.M. parts employee or driver will stop by the location and take care of whatever is waiting in the box.

J.M. has four branches in a territory that covers about 150 miles by 65 miles, so the alternate parts drop boxes would conceivably eliminate a good amount of back-and-forth drive times. As Burgan says, “This will help improve efficiency, lower costs and eliminate hassles for both customers and staff.”

Of course, not every parts and service claim is able to be taken care of in this way, but it does sound like an interesting plan. I don’t know all the details but you can read Audie’s article in the April 2010 issue of The MHEDA Journal to find out more.

While talking to MHEDA members for our annual industry forecast, I heard from several people how sales of used and rental equipment, forklifts in particular, will be tools to lead the material handling industry out of the recession. The reasoning is, many end-users can’t afford a large expenditure on new material handling equipment, but may be able to afford the cost of used equipment or the small monthly outlay for a rental unit. This is a good way for dealers to maintain their cash flow now and retain a customer who may buy new equipment once the market rebounds.

It’s sound logic. That’s why it was interesting to talk to one distributor member, a forklift dealer (I’m going to keep the name out of this because they didn’t realize they would be quoted in this platform), this week who shed some more light on the used material handling equipment industry. One of the more interesting insights this person gave was that prices on used equipment will be rising because of the dearth of new equipment being sold. Before long, this distributor says, the cost savings won’t be all that much. With no new equipment that will become used equipment in a few years, the supply of used equipment will be small, and prices will need to rise.

Another point on that topic came up in a discussion with a colleague subsequent to that call. What new equipment was sold over the last few years will have less wear-and-tear on it than same-aged used equipment from a few years ago, because end-users aren’t as busy. Trucks may be running fewer shifts than normal. This will also affect used equipment pricing because the used equipment that is being resold will be in better condition than a used truck has been traditionally.

It’s an interesting trend to follow over the next 18-24 months. I’d love to hear your thoughts on this issue.

Earlier this week, I had the pleasure to sit in on a conversation between David Rizzo, president of A. J. Jersey (South Plainfield, NJ), and Sam Grooms, president of Hy-Tek Material Handling (Columbus, OH). Rizzo is a Crown dealer in central New Jersey and Grooms is a Yale and Hytrol distributor in the Midwest.

The conversation was centered around the Member Profile article for the 2nd Quarter issue of The MHEDA Journal, in which A. J. Jersey will be featured. As part of a new style of article, another member, Grooms in this case, is contributing to the normal profile interview by asking questions. The members provide insight that those of us who don’t do material handling for a living don’t have.  

The bulk of this interview will be appearing in the April issue of the magazine, but you can get a preview of the style in the current issue, when new MHEDA President Greg Morrison, vice president of Morrison Industrial Equipment Company (Grand Rapids, MI), was interviewed by Howard Bernstein, chairman of The Atlas Companies (Schiller Park, IL). Bernstein, who has been in the material handling business for more than 50 years, did business with Greg’s grandfather and had a lot of interesting questions for Greg.  Watch an audio slideshow about Greg’s company here.

These new features will be in each new issue of the magazine going forward, so don’t miss out! If you’d like to be the subject of the interview or the one asking the questions, let me know!

The mass destruction in Haiti following last Tuesday’s earthquake there has mobilized people from around the world to provide relief to affected citizens. (Visit www.redcross.org or click here for more information about how you can help.)

The material handling industry is playing a central role, according to an article in Monday’s USA Today. 

“By Sunday, the Air Force had landed some 300 planes, most of them laden with relief supplies. Four large forklifts unloaded the pallets as they landed and the aid was shipped out on trucks and helicopters. Incoming planes were required to file flight plans with landing times to ensure an orderly flow. The Haitian government has signed an agreement granting the U.S. formal control of the airport.”

Originally, only one forklift was being used. “With only one forklift at first, the Air Force couldn’t quickly unload the planes coming in Thursday and Friday, McMullen said. Because of that, and because the airport lacked ground refueling, many planes were turned away,” the article states.

Luckily, some of the original logistical headaches at the airport have been reduced, and aid is beginning to flow more quickly (though not yet at the optimum rate). Throughout the city of Port-au-Prince, there is still much work to be done.

Any help you can give is appreciated. Visit www.alanaid.org to lend a helping hand.

(photo courtesy of haitifeed.com)