MHEDA Distributors On Transformation

Warehousing products have helped Ken Turnmyre transform his business into a one-stop material handling shop.

“As we watched a lot of material handling manufacturing businesses leave the area over the last few years, we saw an opportunity. Those businesses left standing became much larger as they blended their products with ones they brought in from offshore. As a result, we've become more than just a Class I, IV and V supplier to these customers. Vesco Toyotalift is there with them from the time they start unloading the containers until they put product into their narrow aisle systems and ship it to the customer. We are very in tune with appropriate warehouse equipment, like narrow aisle electric trucks.

“Everything that we sell today has some kind of high technology on board, be it a microprocessor, a computer or the Toyota SAS system, all requiring a high level of skill. We focus much effort on training our associates, and we, as well as our customers, have started to reap the benefits of this investment. It makes a big difference in service. Our technicians are constantly updated, and all are enrolled in an e-learning program with Toyota.

“Vesco Toyotalift is in the solution business. Whether it be offering new products, maintaining 24-hour service, training associates, or recognizing that most customers don't want ownership...they want utilization, we continue to update our products and services to respond to their needs.”

Ken Turnmyre, President
Vesco Toyotalift
Hickory, NC

Continuous economic changes mean businesses must constantly reinvent themselves, and Peter Greenthal has explored new ways to market products to customers since 9/11.

“For the last five years, I've owned Mifran Boman Corporation, a 59-year-old business. The most evolutionary time for the company was after 9/11. The economy changes required us to find new ways to market products to our customers and to approach a very tentative buying public.

“The playing field is still moving and it isn't easy to tell where business will go in the future. It used to be that customers came in on their own; not a lot of effort was needed to lure them in. As buying habits changed, we've had to figure out how to attract customers differently.

“Our products have become more high-tech, so we look for new skills in our employees. Technicians must have a greater understanding of electronics than they had in years past, when all they had to know was how to run a gas engine. Salespeople must be computer-literate and able to use modern technology like cell phones, e-mail and the Internet to their advantage. As customers try to get more material into smaller and taller facilities, we all must be knowledgeable on products that will work under these requirements.

“Leaders today must be fluid, staying well-educated on what's going on in the industry and prepared to make changes to provide customers with solutions in more efficient ways. That's become very clear in today's business environment.”

Peter Greenthal, President
Mifran Boman Corporation
Los Angeles, CA

“Lift Truck Specialists was in tough financial straits when I purchased it last year. After putting in a lot of additional money and effort, we started to see a turnaround in the last few months. Not a broad transformation, but small things that show our efforts are paying off. We've gotten rid of some employees and hired those who really want to take care of our customers; our service calls have gradually increased; customers are happy; and word-of-mouth is enhancing our reputation.

“The previous owner built this business from his perspective as a good mechanic; he knew how to work forklifts and was very knowledgeable. While that's still very important today, success depends on other skills, like being able to read a profit and loss statement and decipher where corrections should go, where the marketing plan can be improved, and where more sales can be made.

“When customers are ready to buy equipment, have the money and the approval, we have to be ready. We've got to put the quote right there in front of them and find that equipment fast. We're looking at having our salespeople use their laptops to print out a quote for the customer the moment they make that sale.”

Todd Gibbs, President
Lift Truck Specialists
Longview, TX

“In the mid-90s, we made the decision to provide more technological solutions for customers. Prior to that, Warehouse Systems could be described as more focused on selling hardware. We realized that we had to reform what we were providing to customers.

Technology allows Tim Gorham Jr. to provide a wealth of knowledge and round-the-clock service to his customers.

“We now approach each sale with a base of knowledge. We do some analysis and up-front consulting so that we're able to really dive in to the customers' business and discover their needs. The customers we are most successful with are those whose businesses we know the ins and outs of, as well as their long-term goals. This has proven to be much better than quoting a conveyor or racking system. Most distributors today can provide equivalent sortation and conveyor equipment, and it's our goal to bring more knowledge to the game.

“Aftermarket support is more emphasized. We have a lot more customers who require round-the-clock service and access to our employees. Fortunately, technology allows us to accommodate them, and we've implemented a 24-hour call line for round-the-clock service.

“While technology is a big help, especially with automating estimating processes and AutoCAD, it also can be a hindrance. E-mail and voicemail make it harder to develop relationships with customers. The good news, though, is that technology also makes us try harder. We have to make a larger effort to ensure that we are contacting people directly, rather than dealing in messages.

“We must continue to transform because the future will see many things evolve, such as RFID and voice-activated systems. We're looking at focusing more on the technology and service sectors.”

Tim Gorham Jr., Vice President
Warehouse Systems
Northbrook, IL

“From its establishment in 1950 until the early 1970s, the main focus of RS Braswell Company was the sale, rental and service of new and used forklifts. The course of the business changed when we took on the Bobcat line of construction equipment, which has become a major part of our business plan. We added two locations, in Charlotte and Monroe, North Carolina, each of which sells only Bobcat and no forklifts. The main reason for this change in emphasis was simply a niche for the new Bobcat product. There was no line of equipment like that in the area at the time. It was new, so there was no guarantee that it would be a winner. Gradually, it just kept growing and looking better.

As the company focuses more on selling Bobcat construction equipment, RS Braswell Company's home office in Kannapolis, North Carolina, is the only one of its three branches that continues to sell forklifts.

“That success set the stage for our continued evolution. As products became more and more sophisticated, the importance of both employee experience and training has gained significance. As a result, we send our people to a number of training schools to help them learn how to deal with a greater variety of brands and models.

“The future will provide more opportunities for transformation, especially as businesses relocate to this region. We will need greater inventory to handle the additional business, along with more sales staff and mechanics. That's a good problem to have.”

Alton Thigpen, President
RS Braswell Company Inc.
Kannapolis, NC

“Like many lift truck dealers, Towlift has undergone a transformation in strategy since its founding in 1965. Back then, the sale of new lift trucks made up the bulk of our business. With today's intense emphasis on customer service, new lift truck sales make up less than 50 percent of our business. The other 50 percent is composed of rental, parts, service and fleet management, along with conveyor, racking, battery and charging systems.

Developing employees' thinking skills has been the key to Towlift's transformation under the leadership of President David Cannon.

“Business now is about “brainware,” not hand-eye coordination. We are in an industry notorious for focusing on electronics, product and physical equipment. Now we really need employees who can think and who can take ideas from concept to action. As a leader, it is my job to help people develop those brain skills and enhance the transition from the physical to the mental.

“To do that, we invest in training, both academic and technical. Owners who are interested in long-term payback must make training a priority.

“Today's service technicians require at least an acquaintance with a laptop. They must be able to interpret problems, diagnose solutions and communicate these solutions to customers. There is a lot to learn, and people must be willing to make that commitment and move forward. We probe away in interviews to find potential employees who are willing to learn and are not afraid to fail.

“The pace of change will increase geometrically, and distributors must be willing to keep up with that pace. Customers will want more, faster; suppliers will demand more. It's going to be more, more, more and faster, faster, faster. People will want costs and prices to come down. It's not going to be any easier.

“Do not be afraid to change. The companies that struggle in today's market are the ones that are not facing the forces of change, aren't flexible and aren't willing to try new things. We've learned that we must adapt to change fairly quickly to remain successful.”

David Cannon, President
Towlift Inc.
Cleveland, OH

Edward Otis provides information on maintenance, diagnostics and availability via e-mail, Web sites and faxes.

“Our company was founded in 1934 and has had its share of transformations over the last 70 years, but perhaps none as profound as when my grandfather turned over the ownership and management of E.D. Farrell Company completely to my father in 1974. Only about 15 percent of companies accomplish this successfully. My grandfather was more conservative toward the end of his tenure as president, but the transition was well structured so that my father was able to fully implement his new ideas and strategies to strengthen the company without crippling the business. He did a tremendous job eliminating debts and focusing the company.

“Like most companies, technology has transformed the way we do business. But one big reinvention occurred when we decided to expand our markets. We went from focusing on large manufacturing companies and warehouses to the retail and small commercial markets. We used to tell a salesperson to look for the smokestacks, then to go over there and ask them if they want to buy something!

“Today, our salespeople aren't just asking what the customer wants to buy, they are asking what the customer wants to know. We've become a source of information for the customer on things like truck maintenance, electrical and computer diagnostics, truck availability, Web sites, etc. We've also become a manager of their fleet of equipment and purchasing activity.

“E.D. Farrell operates three branches in a marketplace that other dealers may cover with just one dealership. We do this in order to remain focused on our customers, and it's paying off.”

Edward Otis, President
E.D. Farrell Company Inc.
West Seneca, NY

“The biggest transformation at The Bailey Company came in the early 1970s when we decided that the most important way to grow our company was with absolute service to the customer. Once we realized that, we began to offer total maintenance programs, which have grown to cover almost 3,000 trucks. We also noticed the potential of customer contact through preventive maintenance, and embarked on an aggressive plan to increase this offering. Now we have nearly 8,000 units under contract for preventive maintenance.

President Gordon Morrow (right) empowered regional managers, including Cumberland Regional Manager Bill Sweeney, to respond more quickly to customers.

“As a result of our increased focus on service, we've grown from one store in 1949 to 12 stores in three states. It was our objective to be no farther than one hour away from a potential need. By doing so, we've increased our service, rental and equipment sales.

“Leasing was not part of the action at all in the early days, but we saw a need for that service during the 1960s and began writing our own leases. That service has progressed through the decades, with half of all machines now placed with customers under some sort of a lease agreement. Leasing companies tend to operate on a yearly schedule, but the utility value of a truck is really measured in how many hours it works. We realized years ago that to ensure the quality of a customer's machine, we would lease them on an hourly basis of good service life.

“I believe that the key to longevity is continuing to assimilate to the changing market. Just last year, we established more regional contact with potential end-users by using regional general managers who are out in the territory, instead of a centralized group of officers at the main headquarters. Each manager is responsible for four stores, which puts the decision-making process much closer to the need and usually results in a faster response to any particular customer.”

Gordon Morrow, President
The Bailey Company Inc.
Nashville, TN

“I have seen many changes at K-Lift Service Co. since my stint as a forklift painter during high school. Things were different 34 years ago when my dad started the company. All that was required to do business was a handshake and our word. Today, our hand is more likely to have a firm grip on a PDA or a Nextel phone.

“Technology has transformed our company from the way we make decisions to the way we do business. A serviceman used to need only his tools to fix equipment; now he needs electronics to diagnose as well as repair.

“A big change came about eight years ago when we installed a state-of-the-art computer system throughout the company. Prior to that, much was done by hand. We have drawers of index cards to prove it. Our data are now in the computer, and we rely on it to interpret information, make changes and manage client relationships. It's good proof that we're really taking care of our customers.

“Technology has not only revived the way our company does business, it also has changed the way customers make purchases. People are more price conscious and many will buy equipment online. We must continue to push the service button and the added value of doing business with us.”

Jeff Griffin, Vice President Sales
K-Lift Service Co. Inc.
Salinas, CA

“Central Forklift Inc. started as a forklift repair company and that's what we still are. Our customer base has changed a lot. Being in the Northeast as an independent company amidst several high-end dealers, our business is very competitive. There used to be much more manufacturing going on in this region, but today there's very little. Warehouses close, move, or find new ways to distribute. We're constantly losing and gaining customers, and there is no guarantee that tomorrow an office isn't going to call up and tell us that it's closing everything and moving to Chicago. It's very important to keep abreast of what's happening—if somebody is moving out of a warehouse, we've got to find the next guy who's moving in there.

“Machines now come with a lot more computers in them, and we've had to become more technically capable to repair them. Salespeople still need to be out there in front of the customer, but now we're dealing with warehouse managers, not so much with the owners who may have appreciated us a little bit more. Everybody talks about how loyalty isn't what it used to be, and customers will go somewhere else just to save $20. Communication skills are essential now, and if you explain why, who and what, you usually can keep the customer. In today's environment, you really have to be on top of your game and revive your approach as needed.”

Robert Salimbene, President
Central Forklift Inc.
Piscataway, NJ

“The opportunities we pursue are very different today than they were 30 years ago, when Fredon Handling was founded. We've gradually transformed and revived as we responded to opportunities, which can be seen in the vendors we now have, our customers and the products we sell. What has not changed is that customers still want to be responded to...quickly. Of course, technology gives us the ability to communicate instantaneously and complete things faster.

“Among the biggest things we've had to respond to are the trends of modern consumerism. End-users are very self-reliant and believe they can purchase equipment without professional advice or assistance. Mail-order catalogues and online purchasing will continue to be challenges, as the Internet offers a convenient venue for manufacturers to take more business on a direct basis.

“We know that to retain our customers, we have to differentiate our services. Salespeople must establish a rapport with the customer, be of the highest integrity, and able to follow through on what they say; while installers are expected to be independent, able to make judgments on the job site, and handle a relationship with the customer without calling the office every time there's a slight issue.

“Revival and transformation come with being open to opportunities.”

Greg Wait, President
Fredon Handling Inc.
Jackson, MI

Rick Andrews does business on his cell phone and laptop computer, proving that technology has transformed Equipment For Industry since the “days of the smokestacks.”

“Equipment For Industry was already 30 years old when I bought it in 1985, and this year we're celebrating our 50th anniversary. It was the school of hard knocks in those early days. A salesman was given a catalogue and told, “There are the smokestacks, go!” Today, things have become more strategic as we look to hire experienced salespeople with some educational background. Finding them is a challenge. We're competing against other markets where people can walk into a sales position and start out making $50K to $75K a year. In the material handling industry, that's hard to do. Ideally, I would like to bring new people into the industry and train them on how our company does business, rather than hiring retreads.

“Years ago, dealer principals wore many different hats, and we did lots of things ourselves. Our transformation occurred with technology, which is enabling us to communicate better with suppliers, customers and even among our employees. As the company has grown, we've taken advantage of the benefits technology brings. One of those benefits is the ease of delegating work. Today's leaders should have the skills to recognize people within their companies who could take on different responsibilities.

“Technology has made a marked difference in a short period of time at our company, and I wouldn't guess as to where we will be ten years from now. Some things, however, have not changed. Back then we were out on the street making calls, and that's what we continually have to do today.”

Rick Andrews, President
Equipment For Industry Inc.
Cleveland, OH

“Most of us can remember those early days in business. You put everything, including your life savings, on the line, and you spent lots of long hours doing as much work as you could get done in any given day. You were young, naïve, and you made a lot of mistakes. You worked hard to develop relationships with customers and with vendors, taking years to put the whole package together. Sometimes you had second thoughts and asked yourself if you were doing the right thing. And then it happened.

Aloi Materials Handling's new facility, along with intense knowledge of the customer, has helped encourage repeat business and reinvigorate sales.

“Fifteen years ago, Aloi Materials Handling had a base of about 50 customers. I purchased the company three years earlier and was beginning to see that the hard work we had done during our first couple of years was starting to pay off. It was happening. The company was sewn at the seams, and our relationships with customers and vendors were working.

“We now have over 300 customers and a better grasp of what they require and how to help them. We're in a new facility and we have a successful reputation. We have a great set of employees that customers trust.

“We know that transformation is inevitable, and recently refocused with a new strategic plan. Due to downsizing, the bigger accounts aren't as lucrative as they used to be, and we're aggressively pursuing the B accounts. This strategy, combined with new product lines and more personal direction for our salespeople, has helped reinvigorate our sales.

“As companies continue to streamline, they'll be outsourcing to experts, and that will be a benefit for us. They will want to work with somebody who will take the ball and run with it, someone they don't have to babysit. They will look to outsource to a trusted partner. And we'll be there for them.”

John Skivington, President
Aloi Materials Handling Inc.
Rochester, NY

Michael Brumleve is preparing for more transformation as fuel cells and other technologies continue to change the material handling industry.

“Our company was established in 1947 as a Dempster dump truck dealer. The first transformation Cardinal Carryor experienced was in 1954 when we switched to the material handling business as a Linde/Baker dealer. By the 1960s, we were well established in the area as a Yale dealer and were approached by Clark in 1965 to take on its line. This was quite a change for us because at the time Clark constituted 40 percent to 50 percent of the forklift business. Taking on a line with such magnitude allowed us to quickly increase the size of our business and to reap the benefits of working with large companies like General Electric and Ford Motor Company, which had two plants in the area. In 1981, we became a Crown dealer, and today that is our primary line.

“Factories were drawn to our local strengths to represent their national vision. A dealer must always be prepared to move to the needs of both national and local market trends as they continue to evolve. Over the years, we've eliminated lines and added others. Now we are branching into other parts of the material handling business in addition to forklifts. We realize that our customers are looking for a single source of material handling solutions, and we must offer those options.

“To remain successful, it's important to analyze the trends in our industry. As a forklift dealer, I need to be aware of the next great thing for our customers' benefit. Some say it's fuel cells or AC power. Whatever it is, the material handling business will change in rapid succession, and there won't be time to mull it over before trends and advances can be integrated into our businesses. In today's market, service is the key, and it's necessary to make an informed decision quickly. Otherwise, the train will pass you by.”

Michael Brumleve, President/General Manager
Cardinal Carryor Inc.
Louisville, KY

“Bode Equipment Company was ten years old when I bought it in 1985, and since I came from outside the industry, I had a lot to learn.

“Previous owner Larry Bode handed me a box that was jam-packed with about 500 index cards. Each card had a different contact's name, address, phone number, the date of the last communication and what was talked about. He told me that the box was the lifeblood of the company and that I needed to keep it up to date because it was “the bible” of the business. Of course, that box has given way to computers, much like handwritten order forms have given way to computerized invoices.

“Companies must always revive and transform themselves. We cannot get stagnant. Two things we did recently to transform our business have had critical impact on our customers and our internal processes. The first was opening our own service department 19 months ago. This work had always been subcontracted. Right now, we have three technicians and a couple of trucks, and they're having a positive impact on our sales. We can totally service the sale and continue to be in touch with the customer after the sale is made.

“Recently, I announced to our employees that Bode Equipment Company was a 'family business.' While my wife and two sons have worked for the company, I'd never used those words before, because I was afraid of losing valuable employees. I mentioned that 80 percent of U.S. companies were family businesses, and that there would be no change to employees. I talked about continuity of purpose, and I mentioned that while they were looking at the present owner, they were also looking at the future owners, my sons. We continue to talk about the succession of the company at sales meetings, and I'm glad that employees, suppliers and customers are finding value in those words.”

Steve Fawcett, President
Bode Equipment Company
Londonderry, NH

“Everybody wants everything right now! Customers want immediate quotes and instant access. It's easier for them to comparison shop, or shop with no interaction at all via reverse auctions. Technology has transformed the way salespeople have to perform, plan their time and handle their customers. They've learned to schedule appointments because customers won't see them if they just stop in.

Dave Reder cites technology as the major driving force in his company, currently celebrating its 35th anniversary.

“Since I came on board to OKI Systems in 1980, technology has been the major driver of change in our business, which is celebrating its 35th anniversary this year. With highly sophisticated equipment, the need for high-level technical training has increased. And while sales and customer information databases are readily available on an on-time basis, and information flows quickly back and forth, it's important to guard against the temptation to do things quickly through e-mail and voicemail, rather than face to face. So much more comes at us during the course of a day, we have to be careful not to lose interaction with suppliers, customers and employees.

“New technologies will continue to transform our business. Right now, we're looking at VOIP an Internet phone system that permits us to transfer calls among our offices in seven states, as if we're transferring them to the next cube.

“There are many possibilities for centralization and streamlining. Paperwork will decrease, and technicians will be able to create an invoice right there at the customer's facility rather than writing it, bringing it back to the office and having someone enter it into the computer, printing an invoice and mailing it.”

Dave Reder, President & CEO
OKI Systems Limited
Cincinnati, OH

The Silver Service policy has reinforced 76-year-old Arnold Machinery Company's strong customer service over the past 20 years.

“Arnold Machinery Company went through a transition in 1985 when Al Richer purchased the company from the Arnold family. That is when we made a clear commitment to servicing the customer and establishing our brand, Silver Service, which has really been the engine of our growth.

“Since the institution of this commitment, we have focused on hiring only individuals who are customer-oriented. Our Silver Service policy empowers everybody in the company to make a decision to keep the customer happy right at the point of contact, whatever it takes as long as it is ethical. Anyone who cannot accept and adhere to this philosophy cannot work for our company.

“Another important objective of Silver Service is to ensure that associates have the opportunity to learn, especially in today's high-tech environment. With the emphasis on technology, you are in real trouble if you do not have proficient, trained and comfortable associates.

“Mergers and acquisitions of major companies have reduced the number of customers. And face it, businesses used to be locally owned and more 'community-involved.' While people worked for different companies, they all lived in the same community and had similar interests. They knew each other through interaction in sports and other social activities. But today, society is extremely mobile, making it more difficult to build lasting relationships. Therefore, we must sell Arnold Machinery Company and our brand, Silver Service, to the physical location, no matter who is managing it.

“We will continue to have mergers and acquisitions among our customers and our competitors in the distribution business. There will be fewer companies, but larger territories to be covered. Silver Service will ensure our future success.”

Russ Fleming, President & CEO
Arnold Machinery Company
Salt Lake City, UT

“I've been involved in this business for 27 years, so believe me when I say that day-to-day business is significantly different now than it was back then for Shipping Utilities. For one thing, there isn't the freedom that there used to be as far as customer pricing is concerned. That is often dictated today by the manufacturers, many of whom have also gone to the national account system.

Technicians in the service department of Shipping Utilities are thoroughly trained within their product line.

“Many material handling companies were started after World War II by people with a great work ethic and vision. The majority I've known or met over the years were not detail people; they were visionaries. Today, you have to pay attention to every little detail of the business, and there is so much more for an owner to understand about rentals, service, parts, new equipment and used equipment. I'd love to have the time to be the visionary that these guys were in the '40s and '50s, but there's hardly the time for that now.

“If you wanted to let an employee go 15 years ago, you simply let an employee go. You don't do that today, not without a host of memos and notes in the file. Unfortunately, as our society has become more litigious, employers must take extra steps to protect themselves. Another example of this is that we see very few, if any, deals consummated on a handshake anymore. All kinds of paperwork is required up front. Companies stretch out payment to small businesses like ours, so we have made accounts receivable into a major point of emphasis.

“Technicians require much more training within the product line, and it's getting to the point where a competitor's technicians cannot fix the truck because there are proprietary codes in them. Technicians cannot get in to fix the truck unless they are designated by the manufacturer to be there. Hopefully, this turn of events will be a positive for our company's service department.”

Mike Greenwood, President & CEO
Shipping Utilities Inc.
St. Louis, MO

“Delta Materials Handling has been a forklift dealer since 1960 when we were primarily a Clark dealer. Since then, we have taken on additional lines and have changed our focus on one product to a focus on finding the best available products and solutions for customers' needs.

Gregory Costa (left) reviews engineering drawings for a conveyor application with John Williams, president of ConveyorMan, Inc., for a customer's facility outside the United States.

“In 1986, we made the decision to actively pursue the allied end of our business by developing a separate department designated solely to warehouse products. At that time in the mid-South market, you were either a forklift dealer or an allied products dealer—no distributor had successfully combined both aspects into one business. We devoted much time and energy to developing this strategy, and it gave us a niche in the market because we could provide our customers with everything from forklifts to conveyor, rack and docking equipment, eliminating the need for multiple suppliers. Over the years, this part of our business has grown from one-quarter of a million dollars to more than 6 million dollars.

“Our managers must never stop learning about our competition and new markets. There will be fewer and fewer manufacturers and distributors as the acquisitions and consolidations continue. Delta Materials Handling represents manufacturers not only from the U.S., but also from Korea, Germany and Japan. Our managers have to understand the globalization of business.

“You don't wake up one day and reinvent your material handling business. Transitions are slow, and if you're paying attention, your business is always reviving itself and adapting to your customers' needs. The real driver for any transformation is what our customers are demanding from us.”

Gregory Costa, President/CEO
Delta Materials Handling Inc.
Memphis, TN