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!

A few weeks ago, I posted a discussion topic in MHEDA’s LinkedIn group asking group members to tell me some of the reasons that customers keep them awake at night. A bit of a tongue-in-cheek phrasing, sure, but it was meant to coincide with the Second Quarter issue of The MHEDA Journal, all about customers and customer-related issues, which itself coincides with MHEDA’s Annual Convention.

Group members responded with some interesting perspectives. Reasons for losing sleep provided by the group included concerns about communication, finances, bidding procedures, service issues and more. One member responded simply, “Customers don’t listen.” Often, this is probably true, but what are some specific scenarios that cause problems?

Financial capability was an important issue. As one respondent noted, “When a major account experiences financial difficulties – our risk increases.” Another person added to that, saying, “Things could be sailing along fine, and then suddenly your customer loses a large account and they no longer need half the service you’re providing, and perhaps half the equipment, yet your business planning counts on this. I don’t own a multi-million dollar dealership with dozens of employees counting on my guidance, but I managed high enough in the corporate ranks to witness it and actually feel it in meetings. So I guess my final answer as to what keeps distributors awake is ‘the unknown.’”

But is it always the customer’s fault? Another unique viewpoint came from the member who wrote, “I believe that if you are staying awake at night because of an unhappy customer it is due to the fact that you did not present a clear explanation of the products, services, etc. being provided. You’ve assumed they thought it wasn’t included and they assumed it was, you need to take the time to present a complete scope of supply and not make any assumptions.”

These are only a few of the most compelling replies. I encourage you to take a look at the responses and chime in yourself. Here’s the link (you’ll need to be a member of the group to access it). I’d love to hear some more perspectives!

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.

I’ve been referencing the Second Quarter 2011 issue of The MHEDA Journal in this space for several weeks now, and I’m happy to report that it is now at the printer, ready for distribution by mail in mid-April and at MHEDA’s 56^th Annual Convention at the end of the month. (By the way, once again this year, I’ll be blogging and Tweeting live from the show, so I hope you follow the goings-on even if you’re unable to attend.)

 This issue is all about the Convention and, more specifically, the Convention theme of “The Customer Convention.” The magazine features articles all about customer-centric topics such as how customer service can put money in distributors’ pockets, handling customer complaints, when it’s OK to say no to a customer, partnering with the manufacturer to handle difficult customers, using social media to engage customers, customer survey best practices, encouraging customers to go green, and much more! There’s even an interview with an end-user customer, who describes what he looks for in a distributor partner.

I’m a little bit biased, but I think this is a tremendous issue. It will be available in print and its full online glory within the next week or so. I hope you enjoy it. On to the Third Quarter!

During our lengthy trip back from ProMat (let’s jut say we got to know Concourse B at O’Hare airport very well), my travel companions and I were chatting about all the interesting things we saw at the show. One of the topics that came up was how many exhibits displayed their end-users right there on the booth for everyone to see. I understand that, at a show where so many end-users attend, doing so is a good marketing ploy. An end-user sees the work you did for Company X and thinks, “Maybe that supplier can do the same for me.” I get that.

However, I also got to thinking about the other side of that strategy. If a competitor who is also at the show sees that you’re doing business with Company X, they might think, “I’ve been trying to get that business and now that I know who has it, that can help me develop a new strategy to get it.” I wonder, does that happen? Is that a valid concern? I’m not talking about going in and badmouthing the current provider, I doubt most of you would condone that, but I do wonder if there is some detriment to listing the customers.

Maybe it’s a testament to the strength of the provider’s relationship with the customer, so it’s nothing to worry about. What do you think? I’d love to hear thoughts from those of you who are in the industry, exhibitors or not. With MHEDA’s “Customer Convention” just around the corner, it seems like a relevant discussion. Leave a comment and let me know your opinion.

While the attendance at ProMat 2011 seemed to be a bit ligther today, that didn’t dampen the enthusiasm of those who were at the third day of the show. Exhibitors continued to rave about the number of quality leads they recieved at their booths. End-users from around the globe made the show worthwhile for a high number of MHEDA members who had their booths on display.

I spent the morning walking the show with Steve Guglielmo, visiting the distributors who had booths. We also took in a seminar about using lean practices to improve forklift operations.

One highlight of the afternoon was taking a few moments to wander the Automate 2011 show, which collocated with ProMat. There were several different kinds of robots on display, including ones that dealt blackjack, putted golf balls and drank from a water bottle. They were all pretty neat displays. Other, more-relevant-to-material-handling applications for the automated equipment were also shown off, including a robotic palletizer, high-speed scanning equipment and lots of cutting and welding uses. To be honest, I think a lot of the robot applciations, both in Automate and in ProMat, were more to show off what can be done with the technology rather than showcasing useful applications. One robotic truck we saw wouldn’t have eliminated any manpower, as it still required lift to place the itmes it picked on high shelves. Though, admittedly, it did look cool.

Regardless, though, if the booths at ProMat were any indication, automation and robotics will remain the waves of the future. As systems engineers continue to perfect these technologies, some unique products will surely be develoepd soon.

All in all, it was a productive show. I learned a lot, made a host of new contacts and re-connected with some members I’d met before. MHEDA Members, both suppliers and distributors, always have a lot of information to share. I’m glad I was there to soak it all in. See you in 2013!

MHEDA Past President Jim Bowes of Peach State Integrated Technologies visits MHEDA's booth at ProMat.

Day 2 of ProMat was another filled day. We took the shuttle over early to attend a press conference where TGW  Systems unveiled a new picking product. After that, the show opened up and it was another day of walking the aisles and meeting suppliers and distributors. I also attended a seminar on the future of robotic case picking with robotic industrial trucks. It was a good look at trends in distribution centers.

In my time walking the aisles, there was good traffic flow. Most exhibitors were very pleased with the amount of leads they’ve generated so far, far more than at the previous ProMat show two years ago. The beauty of a stronger economy, I guess. At MHEDA’s booth #1878, for example, they were able to sign up 5 new members, which is a lot considering that most attendees are end-users and not distributors. That’s not to diminish the presence of distributors here, as they were out in full force.

Perhaps the most informative part of the day was at MHIA’s State of the Industry press conference, where MHIA COO George Prest went through some material handling industry statistics and forecasts. New orders grew 18% in 2010 and are expected to grow 11-12% in 2011. Shipments rose by 6% in 2010 and are expected to grow 11-12% in 2011. Domestic demand grew 3.5% in 2010 and is expected to grow by the same 11-12% in 2011. Exports will be stronger than imports in 2011, according to the data.

Part of the MHIA presentation also included a short speech by Jock Menzies, president of the American Logistics Aid  Network (ALAN), about the industry’s help of the recent tragedy in Japan. He spoke of all the efforts of the peopel in our industry and others who helped out and compared the cleanup in Japan (a modern, financially rich country) to the recent efforts after disasters in Haiti and other poorer, less advanced countries. It was a striking contrast.

One other interesting fact: Did you know that “material handling” is called “intralogistics” in Europe? I didn’t. But two gentlemen promoting the CeMat show in Hannover, Germany, in May enlightened me to that fact.

All in all, it was another busy but fun day. Needless to say, my brain is almost as sore as my feet from all that’s going on. Stay tuned to live updates via Twitter by me @liftmoveandstor and my colleague, Steve Guglielmo (@MatHandlingEdge). We’ll be on the floor for a half day Wednesday before heading back to upstate New York. If I haven’t seen you yet, maybe we’ll see each other on the floor tomorrow!

So the first day of another ProMat is in the books, and it was a wild one. It started with a visit to MHEDA’s booth (#1878) to get our MHEDA Member ribbons and then to cover the ribbon-cutting ceremony. Then we headed upstairs from the show floor to help with Classroom Day. I didn’t take any students around on the show floor, but those who did had a good time helping new students learn the industry.

More than 250 students and faculty participated in Classroom Day at ProMat.

I attended a press conference put on by The Raymond Corporation, where they talked about working with a distributor to create a 1.1 million sq. ft. headquarters/distribution center for The Container Store. It was an interesting presentation, as Mike Coronado, director of the distribution center said the company has seen a 30% improvement in process time since the facility went live in 2004.

Then, it was back down to the show floor, where I made the rounds and met lots of MHEDA members. Several MHEDA distributors were wandering the aisles as well, including Past MHEDA Presidents Tim Hilton, CEO of Carolina Handling (Charlotte, NC); John Cosgrove, president of Atlantic Handling Systems (Fair Lawn, NJ); Mike Romano, CEO of Associated (Carol Stream, IL); Jim Bowes, president of Peach State Integrated Technologies (Norcross, GA); and current president Chuck Frank, president of AHS Inc. (Cincinnati, OH). That doesn’t even include all the other distributors and the 111 MHEDA members who are exhibiting at this year’s show. Each is sporting a “Proud Member of MHEDA” placard in their booths.

One thing I found interesting was the number of distributors who had exhibits. I always thought of it as a manufacturer thing to exhibit at shows like this, but I walked past exhibits for MHEDA distributors Siggins Corporation (North Kansas City, MO); Peach State Integrated Technologies (Norcross, GA); Vargo Companies (Hilliard, OH); W&H Systems (Carlstadt, NJ); PeakLogix (Midlothian, VA) and Kuecker Logistics Group (Belton, MO). (If you’re a MHEDA member distributor and I didn’t mention you, sorry…I haven’t made it through the whole show yet). I thought that was interesting. I never really thought of it, but it does make sense for distributors to have booths. There are a lot of end-users at this show, so why wouldn’t a distributor want to touch base with potential customers. Particularly if you’re not a territory-specific dealer, ProMat would be a great place to pick up sales leads. Why let a manufacturer get those leads and potentially hand them off to someone else? I have seen distributors exhibiting here before, but it definitely seemed to be more than in past years.

After walking the show for a while, I went back upstairs and watched MHEDA Executive Vice President Liz Richards give a presentation on MHEDA’s Gateway Program as part of MHIA’s Classroom Day. After that, it was back down on the floor to visit more booths and attend another press conference, where Gorbel introduced an aluminum gantry crane. Pretty interesting technology. Finally, I wrapped up the day in Vargo Companies’ seminar on lean distribution strategies. Kudos to the three gentlemen giving that presentation who did a nice job despite some technical difficulties with the sounds system.

MHEDA's Networking Reception was well-attended by members, prospects and guests.

Then it was upstairs to MHEDA’s Networking reception. It was a large crowd, and everyone had a good time. Attendees could place a business card in a bowl and win a prize, including a free Convention registration for the 2011 or 2012 MHEDA Convention. It was still going strong when we left at 6:00, and we just made it downstairs in time to catch the last shuttle.

It was nice to get on the bus and finally have a chance for an extended sit-down. My feet were starting to feel it. We closed the night with a visit to Hytrol Conveyor Company’s hospitality event at the Renaissance Hotel. Thanks to the Hytrol folks for a nice event.

It was a long day, but it was great to get around and see so many MHEDA members. The general consensus was that  the show was off to a good start. End-users appear to have money to spend again and they were out looking for equipment to spend it on. I’ll be back out there tomorrow, and I’d love to meet you if you’re out there! Don’t forget to follow my live tweets at www.twitter.com/liftmoveandstor. My colleague Steve Guglielmo is blogging and tweeting as well. Now it’s off to bed. See you tomorrow!

We flew into Chicago tonight for ProMat. We were delayed leaving by about an hour and it was a bit of a bumpy ride, but we made it without too much trouble. We checked in at the Fairmont Millennium Park Hotel, and it is really nice. The room is very nice and it will be a good place to call home for a few days. The show starts at 10:00 a.m. tomorrow, and it’ll be nice to get out on the floor and see the new technologies in the industry. This is my 4th ProMat, and I have no doubt it will be just as informative as the previous three have been. I never fail to learn something and go home with lots of article ideas for upcoming issues of The MHEDA Journal. My picture is to the left, so if you see me walking the aisles, feel free to say hello! I would love to meet you!

My colleague, Steve Guglielmo and I will be blogging and Tweeting (@liftmoveandstor and @MatHandlingEdge) live from the floor. See you at the show!

I was going through some built-up e-mail today when I came across my New York Times e-newsletter from Friday. Nevermind that I’m likely going to have to pay for it if I want to continue to receive it each day, this one contained an interesting editorial. Since the Supreme Court ruled in 1992 that retailers could be required to collect sales tax only in states where they had some physical presence, many businesses, particularly online retailers like Amazon.com, have not charged sales tax to consumers. Not only does this lower out-of-pocket cost for customers, it also keeps the states and municipalities in which it does business from collecting tax revenue. The point of the article is that in times when many states are in fiscal disarray, this rule makes no sense.

I tend to agree with that, but that’s not the issue I want to focus on. What got me thinking was that this rule, which I was unaware of, seems to put small businesses at a clear disadvantage. Most small businesses, including most MHEDA members, don’t have a physical presence in more than one state. That means that they are required to charge sales tax in their state, which online competitors based somewhere else wouldn’t have to do. Even if the small business in question transacted the sale over a website or e-store, it still would have a harder time competing with an out-of-state online competitor on price  because of its physical location tax requirement.

In this day and age when businesses are doing more search engine optimization to get their websites and businesses noticed outside their traditional geographic footprint, this is an issue that is often being overlooked. The Times article in question mentions several lawsuits in play regarding this rule. Several states have passed laws requiring sales tax be collected, so this situation will certainly come to a head soon. What do you think? Is this an issue that should be talked about more often? What does it mean for distributors going forward?