A working showroom, consignment program and plans for a national customer base keep this distributor connected to customers.
Atlas Equipment Company has been in business in North Kansas City, Missouri since 1941. Back then, the company bought and sold excess goods, as well as office furniture and some general equipment lines. In the last several years, Atlas has sharpened its focus on the provision of material handling systems that solve the challenges of proper workplace design, ergonomics, efficiency and cost reduction.
Improving workflow, increasing worker safety and having enough storage space are top priorities for most companies as they look for systems that are adequate for current usage as well as allow for future growth. Julie Duvall, Atlas vice president, realizes that manufacturing and distribution center managers are inundated with a multitude of other responsibilities. “They are barraged with the need to know all kinds of things, not only material handling requirements but OSHA regulations, employment law, harassment topics, etc. Many companies today are looking for an expert to guide them in making cost-effective decisions regarding their material handling needs,” says Duvall
Atlas partners with customers to provide assistance in making good selections that will last for the long term. With over 250 active vendors, Atlas is able to target the correct products for a full range of material handling situations.
The privately-held company maintains 150,000 square feet of warehouse and work space in three buildings, which provides some unique opportunities. “We are cashing in our assets,” says Duvall. One of these buildings houses a showroom which contains, among other things, a working manipulator, vacuum hoist, cantilever crane, a two-level catwalk mezzanine, workstations, flow rack, electric pallet jacks, stackers, scissors jacks and an in-plant office. Showroom displays are changed often to meet the company’s goal of offering the most current and best products available in the market.
Before Duvall was hired, she dropped by as a secret shopper to get a look at the showroom. “I walked in and thought, ‘This showroom doesn’t show me anything. What is this company about?’ It was very important that we get the showroom showing customers various available options.”
Representatives from a local company recently brought to Atlas 50 different kinds of boxes and asked to work with a vacuum lift. The two men stayed in the showroom for over two hours packing and lifting. Like most of the customers who visit the showroom before buying, they purchased the lift. “It’s not like buying a car, where you can go from one dealer to another dealer to look at automobiles,” notes Duvall.
Customers can come and see the quality of the product, see how it’s constructed, and actually use it. “We can’t simulate every single situation,” says Duvall, “but for those we can, it’s a different experience from looking at a picture in a catalogue and a lot better than getting a written proposal and saying, ‘there it is.'” Distributors often rely on the chance that a similar installation was done for another customer and a visit is scheduled to see the operation. “That’s fine and we do that, too,” says Duvall. “But the showroom and the fact that we will take a demo product to a customer’s site lets everyone see the potential of how that piece of equipment will work with the specific challenge the customer has.”
Atlas has assembled a fork-liftable in-plant office requiring no assembly. This is used at trade shows and taken to a prospective customer’s site. Often customers want to know how much sound insulation an in-plant office will provide. When Atlas’ fork-liftable office is set in place at the customer’s site, the customer can stand inside and hear the difference. A decibel rating and a meter help, but Duvall notes, “I can’t think of a better way to have a customer actually hear the difference and see how that office will work in their own environment. When they’re ready to purchase, they know exactly what they are getting.”
The working showroom at Atlas is proving itself. Most of the customers purchase what they are able to see and work with.
Website Will Expand Marketplace
The market is changing for Atlas, as more and more business takes place outside the local region. This growth has come about because of Atlas’ commitment to the Thomas Register. After reading Atlas’ ad in the Thomas Register, a Florida company called and asked for help with an unusual request. Storage was needed for metal products, and the requirement fell between the cracks of what the company could find locally. The only product available was for very heavy capacity or was physically too small. Atlas was able to find the rack and send it to the company.
Atlas is also working hard on the development of its website. When finished, it will contain the company’s newsletter and an online shopping cart. It will also provide links to manufacturers. “When I go online,” says Duvall. “I look for the company that has an online catalogue and a web link so I can go directly to it and view the product. Our potential customers will do the same thing.” Duvall knows that websites must clearly and strongly show what a company, its services and products are about. They must also be comprehensive.
Website development is time-consuming and Duvall believes it must be done well to be effective. “You must be really clear in your own head about what you are trying to convey to the creative people who put websites together. As I look around on the web, I see that companies have this and this, but not that, or there is a link missing, or there is some little snag that doesn’t quite work.” Duvall knows the importance of good marketing and comprehensive customer service and wants Atlas’ website to be right the first time out.
Ergonomics–A Good ROI
“Ergonomics accommodates the work to the worker, instead of the worker to the work,” says Duvall.
“Often a company is looking at a very quick return on investment. There are many products that can make a big difference in the workplace, and the costs can range from a few hundred dollars to $30,000.” Many of Atlas’ projects are the result of on-the-job injuries or a need for production improvements. “We see a lot of situations where companies use manual labor when they don’t need to, and they want to improve their production process.” says Duvall.
A local company that mixes chemicals requested help from Atlas. One of the chemicals in the mix was kept in a 50 lb. bag. A worker had to lift the bag, slit it and dump the contents into a hopper. Not only was this process time consuming, but was fraught with safety issues. At this company, a worker sustained serious injury while lifting and turning the bag. Atlas showed the company how to lift that bag with a $7,000 investment, decreasing the turning time from 20 minutes to 4 minutes. That worker is now freed up to do other things that improve productivity.
For companies trying to find a start, Atlas begins with simple things like improving the chairs people sit in or the mats they’re standing on, or using gloves to prevent carpal tunnel syndrome when handling machinery. “Comfort factors are a very good return on investment,” says Duvall.
Atlas actively participates in Ergonet, a group of companies in Kansas City that meets monthly to discuss topics of interest in ergonomics and improving workplace safety. The group is made up of safety engineers and warehouse manufacturing engineers as well as hospital administrators, rehabilitation specialists and others. “There are very interesting conversations among a group who approaches ergonomics from such varied perspectives,” says Duvall. In March, Atlas sponsored an Ergonet meeting on the topic of integrating conveyors into ergonomic workstations.
Atlas distributes an ergonomic newsletter published bi-monthly to assist customers with current trends, new regulations and improving the workplace in general. The company has also developed two seminars in conjunction with nationally known specialists in ergonomics, production management and facilities planning. “It is important to do this,” Duvall says, “and it is a good service to provide to our customer base.”
OSHA and Ergonomics
Duvall believes that OSHA will legislate ergonomics and set guidelines on lifting and repetitive motion. A series of public meetings are taking place throughout the United States to discuss the issue and get feedback. “OSHA may say something like two people cannot lift a 200 lb. box. There must be a mechanical means to lift that box. Already there are some guidelines on the books, and a case is pending in California.” Wise companies are already looking at ergonomics as a good return on investment, and it will continue to be an issue for most companies.
When dealing with ergonomics, Atlas has learned that there are two things customers most want to know: “How much will it cost?” and “How much will it save?” Duvall looks at a project and responds, “Here’s what’s happening now. This process takes two people and they’re working eight hours. If an investment of $15,000 enables one person to do that job more efficiently and reduces the risk of injury, it’s easy to see a return on investment.” One company was spending almost half a million dollars a year on carpal tunnel problems. After investing $15,000 in gloves, the actual drop in cases and medical claims was five per month, which is a return on investment of 100 to 1. “We can show companies how to make those improvements.”
This is what Atlas is about, trying to help customers do the right thing.
Not Your Normal Thrift Shop
“Consignment is a win/win and win situation,” says Duvall. “Everyone’s happy. We remove the product from the customer’s building so they aren’t storing it. We bring it to our warehouse, inventory it and assign it a part number. It’s their property. As we sell it, we pay them, just like we would a vendor.”
Duvall came up with the idea of consignment because she did not want to tie up the profit dollars from one job in used product that may or may not even be sellable. Atlas is also responding to the demand for one-stop shopping. Atlas inventories one and a half million dollars worth of used equipment.
Product must be decent and safe and in good condition. “Because of safety issues and insurance risks, we will not sell anything that is damaged,” says Duvall. When the product is inventoried, anything that is not in great condition is eliminated from the agreement. Atlas wants to know who the product was originally bought from.
When people buy used material, the traditional payment is metal scrap rates, which are pretty low. With consignment, the customer is told what the resale value is in the marketplace and receives 50 percent of what the product was sold for. “This is a good return on that product,” admits Duvall.
When a customer closed its Kansas City distribution center and moved to Tennessee–the result of a consolidation and buyout–a lot of rack in good condition was left behind. At the time of purchase, the customer paid $90,000 just for the wire deck in the building. Selling it used at a scrap metal rate would have resulted in very little for the customer. Atlas sold all of the rack over a period of six months and the customer received 50 percent of what it was sold for.
Another segment of the used marketplace includes companies in need of a small amount of unusual equipment–the small machine shop that needs five bays of pallet rack to be used as shelving to store metal pieces. Duvall points out that “consignment offers a place for unusual rack for those kinds of customers.”
“Often people, especially at major companies, think that used is really a good deal,” says Duvall, “and we think some portions of the market are a good deal. Used conveyor, for instance, is still a very good value. However, some portions of the market are not a good deal.” Duvall does not think shelving is a good deal. “There is no way to beat the price on new shelving.”
A company that bought shelving—sight unseen—off the Internet saved 5 percent off Atlas’ new price. The company manager called Atlas and asked for advice before making the purchase. Duvall suggested it would be worth the couple of hundred dollars for a plane ticket to look at the product and make sure he was getting a decent product. He declined her advice. Of course, five months later, the gentleman called back. It took him four months to put the shelving together, and he couldn’t find replacement parts. “One of the disadvantages of buying used is that you can’t readily go out and get more,” Duvall acknowledges, “so we talk to customers about industry-specific rack. Buy standard size so that when you want more, it’s readily available.”
Used pallet racks are not a good deal either, since Atlas buys pallet rack in large quantities, and the price is very competitive. Duvall says, “I’ve asked customers, ‘Could you spend $2 more for a brand new upright? It’s new, it hasn’t been run into and it smells good!'” This amounts to another good return on investment for the customer.
A Different Perspective
Prior to being named vice president of Atlas Equipment Company, Duvall worked in the electronics industry for 12 years, then operated her own business. The owner of Atlas asked her to consider the position. Duvall knew nothing about the company, wasn’t interested in a job, but maintains a high level of curiosity. She decided to come to Atlas on what she describes as a “secret shopping mission.” She visited the showroom and asked for a quote on shelving and its installation. From that first visit, she knew that the company had challenges.
So how did working for Thomas and Betts, a Fortune 500 company, and then being the owner of a small business, prepare her for the material handling industry? Duvall responds very seriously, “The rules of business apply, no matter where you are. Working for a different company, even a different industry, gave me a whole other realm of experience. There are advantages to having a different perspective.”
Duvall is not that concerned about one of the most-talked-about trends taking place in the material handling industry. “Consolidations are already happening in this industry, like they happened in the electronics industry 10 years ago. Back then, hundreds of manufacturers made connectors, and there were thousands of small, local distributors. Once the manufacturers in the electronics industry consolidated, the distributor network started to consolidate. Big distributors bought other big distributors, becoming huge distributors; then they swallowed up some smaller distributors. Now the electronics industry has a true nationwide distributor base. Large distributors have branches in major cities, unlike material handling. Few material handling distributors are nationwide, certainly not with facilities.”
New ideas and new ways of doing things come with challenges. “One of the fun things about being here is that we are in the process of forming a company in an industry that is changing. We can make the company into whatever we want it to be.” And what Atlas wants to be is a company known for its service to customers, its accessibility, its creative responses to a changing market and its desire to do the right thing for customers.
Customers often call to complement Atlas on a job well done. “Those kinds of calls are wonderful,” says Duvall. “I’d much rather hear them than have somebody call with a $25,000 order–almost! But it’s the same kind of feeling–WOW! If customers can tell us they’re happy with our services, that’s a thrill. But if they can tell somebody else, I know we have really done the right thing.”
From training delivery people on how to work with customers (the driver always makes a sales presentation when delivering) to improving manufacturer-supplied assembly directions, Atlas Equipment Company is on the right road. With a history of more than 50 years, the company has a strong foundation. As Atlas looks to the future of the material handling industry, it is not shying away from the challenges. Duvall is delighted about the possibilities, and knows, “We are generating new opportunities. Customers tell us we are doing something right.”