The Mheda Journal

Today (April 15) has historically been tax day (although this year’s filing deadline has been extended to the 18^th), so it seems somewhat fitting that the federal government yesterday approved a law that will have an impact on the taxes for many small businesses.

President Barack Obama signed into law a bill that repeals a requirement in last year’s health care overhaul for business owners to file a 1099 Form with the Internal Revenue Service for all purchases of more than $600 a year. According to a Reuters article, “The tax reporting provision was meant to improve tax compliance and help pay for the healthcare law, but small firms and the self-employed complained it would bury them in paperwork.” So this would be good news for businesses of all sizes, small businesses in particular.

News of the repeal spread like wildfire on Twitter, and I was able to read several articles about the topic within a few minutes of the bill’s passage. Pretty amazing how far technology is come in the last few years. (And for the record, most if not all of the sentiments expressed by my Twitter followers found the repeal to be good news.) When awash in such rapid information, it’s sometimes hard to sift through to find the important, impactful details. Here’s one that I thought did a good job of breaking it down pretty simply.

So score one for the taxpayers. Hopefully, many of the MHEDA distributors who cited this and other government regulations as potential hindrances this year in our Industry Forecast can breathe a little easier. After all, it looks like things are looking up if the First Quarter is any indication.

Have a good weekend, everyone!

By now, MHEDA members should have received their print copy of the First Quarter 2011 issue of The MHEDA Journal, also known as our Annual Industry Forecast. As I mentioned a few blog posts ago, there were many lessons learned by distributors in 2010 that can be applied to 2011. The same can be said of suppliers and manufacturers, who have a few overarching lessons of their own:

• Efficiency. Like distributors, manufacturers found themselves focusing on equal to greater productivity with fewer people, redesigning manufacturing process and internal procedures to maximize efficiency.
• Training. Manufacturers took advantage of the slow times by bringing their own workforces, and those of the distributors, up to speed. A more educated customer forced distributors to learn more to answer customers’ questions. Also, rapidly changing product technologies require near-constant training to keep distributors in the loop.
• Research & development. Manufacturers used slow periods to spend time developing and testing new products and technologies. Customers are more demanding, so they require more developed solutions and more product options. Manufacturers/suppliers also found ways to adapt and customize their products for new, niche markets to drum up sales any way they could.
• Maintaining service levels. Even though sales were not as high as expected, manufacturers were focused on their service. Whether that meant quicker response time, helping handle end-user issues, or offering customized solutions, manufacturer/suppliers focused on service and support.
• Patience. More than one supplier mentioned that 2010 taught “the importance of being committed for the long term.” Things were not happening quickly, so it was important to remain positive and not panic. Taking the time to cultivate partnerships with distributors and their customers was also cited as critical.

 What do you think? What other lessons did you take from the struggles of 2010? Is 2011 looking up yet?

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!

Before the new year gets too far along to still call it the “new year” (did we pass that point yet?) I wanted to address a major talking point that we at The MHEDA Journal spent a year addressing. As one of the main purposes of MHEDA membership is getting advice from industry peers, it’s important to reflect back on what, for many, was one of the most difficult years in recent memory. But there’s silver lining in every dark cloud, and we can take heart in knowing that there was a lot of learning to be done from the trials of 2010. What did you learn in 2010? The answers are many.

• Efficiency. While distributors hated to cut personnel, they often found themselves surprised at how productive they were able to remain even with fewer people. Some took the opportunity to upgrade internal computer systems to help employees perform. “Doing more with less” is a bit of a cliché, but it sums up how distributors are approached 2010 and will continue to operate in 2011. However, many cautioned that they must remain strict about their procedures and processes, even when the economy rebounds, to avoid the excess personnel issues that were a problem during the downturn.
• The importance of training. Distributors found that by having better educated personnel, they were able to meet customers’ needs more completely. Customers were asking more questions than ever, so a better trained workforce was needed to respond. Also, as staffs got smaller, it was important to cross-train employees to fill knowledge gaps and be able to achieve the productivity and efficiency gains mentioned above.
• Marketing/social media. Competition is fierce, and the companies that customers know the best are the ones they will call on. More often than I can remember, distributors are looking at improved marketing techniques, dedicated website redevelopment, e-commerce, social media tools, etc.
• Customers want more for less. While distributors are cutting back, their customers are doing the same thing. They want to cut costs anywhere possible, thus there was a big push to electric trucks to cut energy costs and lower cost-of-ownership products. Distributors are diversifying their services to be able to provide more for customers, including consulting, installation, maintenance and contractor services.

How about you? What did you learn?

It’s that time of year again! We at The MHEDA Journal are in the process of contacting distributors and suppliers for comments for our annual Industry Forecast article that appears in the First Quarter issue. It’s a lot of work every year, but it’s always one of my favorte articles to put together. We usually try to talk to at least 50 members on the distributor side, and it’s always interesting to hear the different perspectives from distributors of different product lines or in different parts of the country.

We’re about halfway through on the distributor side, and some interesting trends are already starting to take shape. First, it’s clear that optimism has returned to material handling distributors.  In 2009, only 32% predicted a sales increase. Last year, that number was up to about 68%. So far, early returns look like that number will be even higher this year. The amount of optimism is still a work in progress, though, so stay tuned for further updates on that.

Among the issues and challenges MHEDA distributors see are the always-present high health care costs, managing growth and bank failures/lending issues.

I don’t want to spoil too much, and there’s still a lot of information to gather but we’re off to a good start. Any MHEDA members out there who have not yet been interviewed and would be willing to take part, feel free to contact me here or by e-mail at editor [AT] TheMhedaJournal.org. It looks like 2011 is going to be an interesting year, and I’d love to hear what you have to say!

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….

The First Quarter issue of The MHEDA Journal is now available online at www.TheMhedaJournal.org. It is being mailed out to subscribers today. As I’ve been telling you for a while, this issue is our annual industry forecast issue, featuring commentary from distributors, suppliers and other industry associations about their expectations for 2010. This special “10 issue” for 2010 features a series of Top 10 Lists to bring in the new year.

Check it out today!

On this last day of 2009, let me say a quick thank you to all who have contributed material and/or left feedback for this space. I appreciate it.

2009 was a busy year in material handling, despite the economic slowdown that greatly impacted the industry. A somewhat bleak outlook from many at the start of the year had many material handlers playing it safe, and trying to Powerfully Position themselves to survive the downturn.

One way many companies found was to learn and master new technologies and new marketing platforms. These companies decided that Braving the Digital World with Twitter, LinkedIn, YouTube, e-commerce sites, wikiMHEDA, software solutions and more was a path to success.

The year wasn’t all bad, as many distributors and manufacturers strengthened their partnerships with each other and wrote their own Sales Success Stories.

Philosopher Friedrich Nietzsche said, “That which does not kill us makes us stronger.” Many MHEDA members will attest that 2009 was one of those years. 2009, and the ’00s decade for that matter, is over (and many people are not shedding any tears about that, I’m sure).

Have a Happy New Year holiday and celebrate responsibly. See you in 2010!

Good news for all you fans of The MHEDA Journal out there: the next issue is at the printer and will be mailed out in mid-January! This issue is our Annual Industry Forecast issue, and we went straight to the source again this year: We talked to more than 50 distributors and 70 suppliers to find out how the industry is really going to take shape in 2010. We also have viewpoints from the presidents of the Industrial Truck Association and the Conveyor Equipment Manufacturers Association, and a forecast from the Material Handling Industry of America.

Complete with quotes, charts, graphs, and more, this year’s forecast is definitely worth a read. Uncertainty in the economy is starting to clear up a bit, so MHEDA members are renewed with optimism for 2010. About 68% of distributors forecast a sales increase next year.

Keep reading in this space up until the publish date (January 15) for more specific details.

Last year at this time, MHEDA distributors were in much the same boat as they are now. They wanted to be optimistic about where business would be next year, but they were hesitant. That’s much the same this year. In our annual Industry Forecast that will be mailed out in print on January 15, 68% of MHEDA member distributors interviewed anticipate a sales increase in 2010. Reasons ranged from product diversity to increased marketing to “It can’t get much worse.”

That’s slightly more than double last year’s rate, when MHEDA members were bracing for the downturn and only 32% were anticipating increases.

For more information on the 2010 forecast, read The MHEDA Journal Online on January 15.