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MHEDA President Takes A New View
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| Employee input was used to design TriFactor’s 16,000 sq. ft. headquarters in Lakeland, Florida. |
The name TriFactor was chosen because it reflects the company's main mission of doing business, according to Phelan. “TriFactor has a solution system as our main product. This system keeps us focused on how to help a customer with the three factors that most impact a company—revenues, cost of operations and profit. We want to keep our customers' customers happy by helping them grow their bottom line. If our customer can't support sales growth, they will have unhappy customers, and that's not acceptable.”
TriFactor goes about its mission a bit differently than other companies, rejecting the three-bid process by focusing on clients who value a partnering relationship. “After 30-plus years in the business, I have learned that the person who is responsible for the system will make sure the company he or she trusts the most will get the project one way or another,” Phelan explains. “So why waste time with two other bidders when you could be focusing your efforts on developing a better solution?”
Instead, TriFactor recommends that customers evaluate potential solution providers and then pick their partner and negotiate how to work together. “That cuts the time it takes to get a system implemented by months,” Phelan continues. “When you consider a $2 million system with a 36-month ROI, each month is worth in excess of $55,000.”
TriFactor Slotting System
Once TriFactor has been selected, the customer supplies it with relevant information on each SKU, such as dimensions, weight, units sold and other details. TriFactor employees take those numbers and determine the best form of storage for each SKU that will result in the most efficient way to pick orders. Cost-benefit analysis takes into account where the products are currently located and calculates how long the payback period will be. Installations are typically designed by TriFactor's in-house engineering staff and incorporate a variety of material handling equipment, including conveyors, storage products and software. Although TriFactor does not sell lift trucks, it will recommend the type of equipment that should be considered.
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TriFactor's unique approach of doing business allows for customers across many industries, including health care, pharmaceuticals, ophthalmic and medical devices, food and beverage, and retail. “We take the unique factors associated with each customer and incorporate them into our process,” Phelan says. “Obviously, much of our business is associated with distribution centers, but in addition, there are applications for our solutions in the picking of components to be sent to the manufacturing floor.”
In The Beginning...
Even before the name change, the company had been through an eventful history since its inception in the 1970s by Jack Thompson. The company mainly sold cranes and hoists, along with some conveyor products. In the mid-1980s, OKI Systems' Gary Thompson met Jack Thompson (no relation) at a MHEDA function. Gary bought Jack's company and later incorporated it into the systems entity that Gary and some partners were already in the process of creating in Cincinnati, Ohio. “As a lift truck dealer, OKI only had a certain area in which to operate,” Phelan says. “If they were selling systems outside their lift truck territory, it was viewed as trying to steal lift truck business. So they just came to the conclusion that they had to create a separate systems company.”
In 1984, Gary Thompson asked Jack Phelan, one of his salespeople in Cincinnati, to move to Florida to run the Lakeland branch of Advanced Handling Systems. Phelan and his wife Ilene purchased the company in 1993, and “have been off and running ever since.” Phelan feels very fortunate to have had Gary Thompson, who served as MHEDA President in 1982, as a mentor. “It seems that every time we were faced with a decision, the words that consistently came out of Gary's mouth were ‘What is fair?' When you know the guiding principle is fairness, it makes it easier to accept whatever decision is made,” he says.
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Phelan, in turn, serves as a mentor to his son JJ, who is being groomed to take over TriFactor. “For all practical purposes, JJ runs the day-to-day operations of the company,” Phelan says. “He comes to me with questions from time to time, and I give him my advice. But he is free to make his own decisions.”
During Jack Phelan's tenure, the company has transitioned from cranes and hoists to becoming a full-fledged integrator of engineered conveyor systems. Phelan recalls some of the initial technology changes that helped define the company. “We went from having one computer that only performed accounting functions to having a network and every employee having a computer. Our first portable computer was a Kaypro, a DOS-based machine that must have weighed 50 pounds,” he says. In 1985, the company's engineers went from a drawing board to AutoCAD. “We were one of the industry's first integrators using AutoCAD with version 2.13. We had a 24-inch monitor even back then, and we were the subject of many tours just because of that technology.”
Providing The Right Tools
Phelan has never been afraid to adopt new technologies. The company has been equipped for videoconferencing since 2001, though Phelan acknowledges that it isn't as popular with customers as he would like it to be. “But other ideas, such as webcasting, have caught on and really have some traction,” he says. “We provide the latest in technology because we believe we need to give our employees the best possible tools to get the job done.” TriFactor has computer-based portals for customers to check on the status of a project, review drawings or get training on their equipment. Internally, a customer relationship management system allows the TriFactor staff to serve customers efficiently.
Phelan believes that technology will continue to evolve in material handling, particularly integrating software systems and voice-picking technology. As the work force demographics change, particularly in Florida, communication issues arise. “Not everybody can communicate in two languages, but voice technology allows for hiring people who speak a different language once the software is prepared,” he says. “People can be trained quickly, and I think that technology will have a big impact.”
A Fun Place To Work
TriFactor counts five managers with direct reports among its 36 employees, plus two additional managers who manage external functions and resources. Those people, as all TriFactor employees, must meet certain criteria for Phelan to hire them. “We try to hire for attitude and train for skills,” he says, adding that each job candidate must go through a series of tests for fit. “We try as much as possible to lay it on the line as far as what's associated with being an employee here,” he adds.
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Phelan gives all job applicants the Wonderlic Personnel Test, which indicates whether or not the person has the mental capabilities to do their job. Another test evaluates the emotional match with the job. Then, the final criterion is attitude. “Rather than experience, I'm more concerned about the right attitude and the right person, and one who's capable of learning.”
When AHS moved into a new 16,000 sq. ft. facility in 2001, management was certain to take everyone's ideas and preferences into account. “We've always believed in giving people the right tools to do their job better and service the customer better,” Phelan explains. “When we moved, everybody had input as to what they would like to have in the new building. Each discipline, from engineers to project managers, designed its own work area to work efficiently. We then took that furniture configuration and designed the building around it.”
That's just one example of how Phelan makes work fun for employees. The company holds regular cookouts for lunch, and JJ serves pancake breakfasts on Fridays. Phelan also arranged to have a local dry cleaner pick up laundry at the office, and for a person to come by and wash employees' cars.
During the course of the year, lunch events are held to celebrate different occasions, including the traditional Thanksgiving Turkey Bowl. “We create a bowling alley in the shop using one-liter water bottles. The ball is, of course, a frozen turkey,” Phelan explains. “The highest scores get turkeys—not the one used for the ball—for Thanksgiving and everyone enjoys a lunch as well.” In addition, TriFactor holds two Christmas parties every year, one for employees' children with a visit from Santa Claus, and another for adults featuring reindeer races and prizes for all.
An Eye Toward the Future
Now that Jack Phelan is preparing to turn the reins over to JJ, what does TriFactor's future hold? “I see our customers more as partners, and we want them to have the same feeling about us. What is good for them is also good for us,” Phelan says. “We now have companies committing to multi-year partnership agreements in which they will have us provide all of their solutions. Think of the savings they have not going through all of those purchasing exercises for every purchase. The big win for them is that more time is dedicated to creating better solutions.”
Although not the main reason for the new name, it’s clear that TriFactor could refer to something else—happy ownership, happy clients and happy employees. It’s a combination that doesn’t appear to be in jeopardy any time soon.
