The Mheda Journal

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!

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!

Earlier this week, a couple of my colleagues and I made a visit to the site of one of our business partners. I don’t know how many of you are aware of how the process works here at Data Key Communications: We produce all the content that you read in The MHEDA Journal, The MHEDA Journal Online, The MHEDA Connection and wikiMHEDA, then the tasks of printing, binding and shipping for the quarterly print magazine gets outsourced to a local vendor.

We took a trip to see some new advanced technology that they use to print our materials. It was a fascinating trip, and while I was there I was reminded of something that Chuck Waddle, vice president of business development at Hytrol Conveyor Company, wrote for the upcoming issue of The MHEDA Journal. In an article about manufacturer-distributor partnerships, he says, “Visits to the facility are good opportunities for integration partners and customers to see examples of manufacturing capabilities and metrics, ranging anywhere from design and production to delivery and service.” While I intuitively knew this was a valid point, it really hit home for me as we wandered the press room. It’s particularly interesting, I think, because our relationship with our printer is not the typical manufacturer-distributor relationship of which Waddle wrote. Site visits can be helpful in a broad array of situations for multiple reasons.

For employees at a firm, visiting a vendor (or customer) site is a good way to learn more about how their job fits into the big picture of the finished product. It helps to know more about the often faceless names at the other end of a phone line. It helps to see how things work beyond the scope of one’s own desk. For employees of the hosting firm, the same benefits apply, and it fosters a sense of camaraderie with your own staff and the visiting company.

While I understand travel budgets are limited, it can be beneficial for employees to get out and see “beyond the cube,” for lack of a better term. Leave me a comment and let me know your best story about a field trip to a vendor or customer site.

For the last seven years of working with distributors in the material handling industry, one of the axioms that has become abundantly clear is the importance of a strong manufacturer-distributor relationship. One of the most clearly articulated explanations of this was expressed in a MHEDA Journal article by Sam Grooms, “It’s Like A Marriage.”

“The partnership between distributor and manufacturer is similar to a marriage,” Grooms wrote. “Not like the ‘throw-away, Hollywood type’ of marriage, but it is rather like a bond that we both intend to take to the grave. Because of that, it is necessary to give very careful consideration to the material handling partnerships we form.” Later in the article, he writes, “When manufacturer/distributor relationships are not hitting peak performance levels, it is normally a result of one major fundamental shortcoming: communication. Similarly, if you don’t talk to your spouse, kids, friends or anyone else important in your life, your relationship is going to suffer.”

Well, I’ve talked to enough material handling people to know that the industry part of what he says is true. Neither party gets maximum results without keeping the other in the loop.

And now I’m about to find out exactly how true the rest of it is. On Saturday, October 30, I will be getting married. Thanks to everyone for their well wishes. I’ll be out of the office for a few days (and trying not to tell anyone where I’m going, haha), but next week I’ll be back at “peak performance level” and ready to jump back into our First Quarter 2011 issue with both feet.

I bet Sam never thought he’d be quoted on wedding advice. Talk to everyone soon!

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.

It seems like there has been a lot of merger & acquisition activity over the last 12-18 months in the material handling industry. A down economy often spurs such activity, as more struggling companies are ripe acquisition targets. So that part isn’t a surprise.

In the next issue of The MHEDA Journal, we will analyze a couple of recent industry acquisitions from both a manufacturer’s and distributor’s perspective. Among the questions we will answer is, How can you merge differing company cultures following an acquisition?

A distributor who I spoke to yesterday had an interesting take on that question. I’m withholding his name for now because he asked me to, but that doesn’t diminish the quality of his response. He said, in part, “You need to find an existing culture that has some fundamental similarities so broad imposition is not required.  Secondly, make the obvious changes in operations, expense and staffing immediately but do not change just to change.  Allow everyone to become acquainted developing relationships and trust in the future.  Utilize people from all your company departments to work with their counterparts and encourage everyone to ask questions concerning anything. Finally, allow things to settle for a bit after initial change. The single biggest piece of advice is that nothing is as easy as it looks and it will take time to raise performance to match your goals.  Given that make sure you are adequately capitalized to give yourself the time it will take.  It also takes a lot of mental and physical energy and be prepared for the drag on you and your staff.”

I’m certainly no expert on the topic, so I’d love to hear any feedback you have about how to blend cultures following a merger. One of my loyal readers, Josh Smith of AK Material Handling, proposed this question: “Regarding the recent and future acquisitions of manufacturers, how do you think they will impact on the relationships that manufacturers have with distributors?” So, what do you think?

Now that the big website launch is past, it’s time to turn my attention to the Fourth Quarter issue of the magazine. In years past, the Fall issue has been a salute to sales. This year is no different, as we once again will be publishing a host of Sales Success Stories. These short pieces highlight a unique sale made by a distributor to an end-user with support from the manufacturer. These vignettes are written from the distributor’s perspective, walking through the intricacies of the sale—where the lead came from, how the product solution meets the customer need, dimensions, customer reaction and more. Read some examples from 2009, and if you think you have something that you’d like to share, I’d love to hear about it.

The distributor involved must be a MHEDA member, and the sale must have taken place within the last nine months (installed since October 2009). Otherwise, those are the only rules! I know our membership is involved in all kinds of unique things, so let me know and get your name in the magazine!

The Third Quarter issue of The MHEDA Journal is now at the printer! It’s been a long process of getting this issue together, but it’s also been a lot of fun. As in years past, we used our Summer issue to salute those MHEDA Members who received recognition from manufacturers. This year, though, we took it a step further by actuallyinterviewing 12 of those dealers and finding out how they were able to achieve such lofty goals despite what we all know was an economic stinker of a year in 2009. While all admit that the revenue wasn’t as high as years past, they still were able to make some sales and maintain profitability. I think many distibutors will find their strategies compelling.

Also in this issue are two safety articles. We haven’t covered safety from these angles before, and I really enjoyed learning a little more about the inner workings of a distributorship when it comes to making safety policy. Thanks to Wisconsin Lift Truck and Associated Material Handling for their help.

This is just a sampling of what’s in store in this issue. There are a few surprises, too, that I don’t want to spoil here just yet, but I’ll be looking forward to hear your reactions once you see the magazine on July 15! (For a sneak peek of one of the surprises, see today’s issue of MHEDA Edge.)

For the next issue of The MHEDA Journal, we’re focusing on distributors who were honored with Top Dealer awards by their manufacturers. In the past, we’ve simply published the list of honorees and highlighted the MHEDA Members in boldface. This year, we’re taking it a step further. We’re reaching out to the members listed by the manufacturers to find out their secrets.

Obviously, 2009 was a down year for the industry, so how were these dealers able to achieve what passed for success in such an environment? A couple of the distributors I’ve already talked to said, I think only half-jokingly, some form of, “We just didn’t do as bad as everybody else” and that’s their secret.

Even if that is the honest answer, the reasons why they didn’t do as bad as everyone else can still serve as a learning tool for the rest of us. If limiting the damage is considered success, then how did you do it?

Over the next few weeks, as I talk to more and more people, I’ll be sharing some of these distributor secrets. For now, I’ll just mention that we’ve actually gotten a wide range of brilliant strategies, ranging from making more customer visits by sales managers, to doing more product demonstrations, to enhancing Web presence. I’m sure you’ll find a nugget you can use from one of these top dealers in the July issue of The MHEDA Journal. Stay tuned!

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!