Suppliers recall the lessons of the past as they forge forward.
Those of us who have parents or grandparents who grew up in the Great Depression can recognize the telltale habits of frugality or a penchant for saving more than they spend. It took just a few generations for the behaviors learned during a very dire period in our history to fade away. More recently, we can point to a period in which spending was rampant, most of us enjoying sales that were at record highs, and there were no forecasted rainy days to save for.
In this year’s forecast, despite the sales growth of 2011 and regardless of projections for growth based on the reasonable projections of one’s customers, most suppliers are hesitant to declare 2012 as a year to celebrate record-breaking growth. Even those who experienced record growth in 2011 remain hesitant to predict similar highs in 2012. Most point to the influences of Europe or Asia and proceed to discuss how Main Street is no longer isolated from the global economies thousands of miles away. Many point to the government and discuss whether or not our elected officials can save us from the damages done over the past decade. Others point to inventory shortages and not being able to count on the raw materials they need to keep up with possible demand.
With continued high unemployment and stalled manufacturing, suppliers point to the market niches that appear stronger in 2012: a recovered automotive industry and the satellite industries that flourish in their orbit, a retail industry that seems to be on the upswing, and the tried and true sectors that we can always count on—health care, food and beverage. As long as we provide the tools needed for increasingly automated workplaces, we will thrive and even begin to enjoy record sales. At the very least, we can welcome moderate (and in some cases more than moderate) sales growth, while remaining prepared for possible hard times.
Like the generations before us, we cannot forget the lessons of the recent economic downturn. We, like our customers, are not going on a hiring or spending binge. Many in our industry (like our customers) are sitting on a pile of cash and will continue to spend frugally, based on a well-thought-out return on investment. And like our grandparents before us, we will not soon forget the lessons that helped us to survive the most recent economic downturn.
More Forecast From Aftermarket
Employers are demanding increased efficiencies and productivity. That means the usage of trucks and all material handling equipment will increase. As usage increases, we can count on sales increases for the aftermarket.
When it comes to recycled lead acid and scrap batteries, Ben Levitt, principal, Regency Metals (Charleston, SC), expects to continue fighting to get more sales. Expecting to maintain 2011 numbers, Levitt will add to his sales force to place more attention on the Midwest.
“The ability to respond to our customers as quickly as possible is a key to our projected sales increase of 3-5%,” says Keith Miller, U.S. sales manager at Cascade (Portland, OR). He explains, “Customers want things now; if they do not want something until tomorrow, they will not call us until tomorrow.” Miller points to an old motto of one of the airlines, “We earn our wings every day.” He says that the motto reflects his approach to his business.
Describing himself as a real customer-focused kind of guy, Ronnie Keene, vice president of sales and marketing, Bolzoni Auramo (Homewood, IL), says that most companies deliver a good product. “It is customer satisfaction that will support our 5% sales increase.” During the 2nd Quarter, the company will introduce a single/double pallet handler designed to provide greater visibility.
The number of large orders is up, according to Jeff Long, vice president of sales and service, EnerSys (Reading, PA), and will support a sales uptick of 5-7%. Long says, “Customers are looking for remote data management tools that help them to manage usage and cost of use, even from a remote location.” The company is placing a greater emphasis on upgraded service management systems that will enhance their response to customer requirements and is installing those systems at service centers across the country.
The national account business, supplemented by general replacement business, will drive a 5-10% sales increase, according to Brian Faust, general manager, Douglas Battery (Winston-Salem, NC). He explains, “End-users have delayed purchases as long as they could by repairing batteries. Now they are in a position where they must consider replacement.” Faust also points to the challenge of keeping up with demand and notes that product must be available within reasonable lead times in order to continue to capture more of that increased replacement business.
Maintaining the differentiation between the Hawker PowerSource (Ooltewah, TN) product line and the products marketed by other EnerSys companies may very well be the greatest challenge for Dean Portney, vice president of sales and marketing. Confident in his dealer organization, he forecasts a sales increase of 5-10%. He says, “The marketplace is constantly evolving, and that makes the need to quickly adapt to change even more important.”
New products for the remanufacturing side of Flight Systems Industrial Products’ (Carlisle, PA) business and additional EIM-related programs will contribute to a 10% sales increase, according to Barry Bowman, president. Bowman says, “We will add at least three new OEM programs, most probably within the first half of the year.” Bowman cautions that it is all about customer satisfaction. “Everything is easier if the customer is 100% satisfied.”
An overall stabilization of the economy will lend itself to a 10% jump in sales, says Dirk von Holt, vice president of sales and marketing, TVH Parts Company (Olathe, KS). In order to assure every customer in the contiguous U.S. of one-day ground delivery, the company plans to open a new distribution center on the Texas/Louisiana border at mid-year.
“The movement by end-users to a greater reliance on high frequency charging technology and the use of wireless technology to manage their data is still driving growth,” says Jim Keyser, business manager, Ametek Prestolite Power (Troy, OH). Last month’s move to a new 7,500 sq. ft. Sales and Technical Center will help to increase efficiencies while growing sales by an additional 15%. He notes, “It’s a good news/bad news thing. The good news is sales continue to go through the roof. The bad news is everyone in our industry is having trouble getting materials to support the sales volume. Customers have a need, and whoever can fill that need will get the business.”
More From Trucks
Most truck manufacturers point to Latin America as the hot spot for growth. And most truck manufacturers predict modest growth, all pointing to increased market share as a part of their 2012 forecast.
A major, key initiative for James J. Radous III, vice president of sales and marketing, Nissan Forklift (Marengo, IL), is the capturing of market share. The company will target specific SIC Codes like meat processing, trucking and bottling. Radous will be introducing an expanded Class 3 offering to round out his electric line, and will launch a Class 2 order picker during the 1st Quarter.
A recently introduced reach truck and the launch of a new 8,000-10,000 pounds hydrostatic diesel truck will help to support Komatsu USA’s (Rolling Meadow, IL) 2-3% sales growth, says Akira Yamakawa, president. Yamakawa says, “Defining the value of the product and communicating that value to the customer who would like to buy on price continues to be a challenge.” An example of the value Yamakawa can present to the end-user is a soon-to-be-launched GPS system that will not only communicate the location of the truck, but will also monitor the condition and performance of the truck from a remote location.
A combination of loosening purse strings and pent-up demand will support a 5% sales increase, says Dennis Rober, president, Tilt-or-Lift (Maumee, OH). He says that reaching out and touching his established customers is the best way to tap into potential new sales. Rober adds, “By staying in contact and providing something as routine as annual check-ups, we can recognize when equipment needs to be replaced or when—as business improves—additional equipment is required.”
Citing Latin America as a major contributor to 2012’s forecasted sales increase of 10-15%, Kent Eudy, vice president of sales and marketing, Mitsubishi Caterpillar Forklift America (Houston, TX), says his partnership with Jungheinrich Lift Truck Corp. has resulted in the co-design of products that will be made in the U.S., the first being introduced during the 1st Quarter. The first of the joint venture’s new products is a Class 3 walkie rider. A four-wheel, sit down counterbalance electric truck, built in Houston, will be launched during the 3rd Quarter.
More From Marketing
Whether selling used equipment online or utilizing catalogs, distributors are utilizing the tools available to them, some more cautiously than others. All remain watchful for signs of what is to come.
While half of the market seems to be still reducing the advertising done to sell used equipment, the other half is aggressively increasing their online advertising budgets, assuring Art Arellano, president, elifttruck.com (Tinley Park, IL), of a fairly flat year. To help his customers stay current, he is offering them free widgets that are tied to inventory. By mid-year, Arellano plans to bring currently outsourced programming functions in-house. He says, “My job is to keep up with the new technologies that allow our dealers and customers to be more effective in marketing their equipment.”
New business will account for a 15% sales increase, believes Mike Smith, general manager, Products For Industry (Milwaukee, WI). The company plans to launch a cutting-edge web-based offering that will include marketing tools, various metrics and the ability to edit catalogs within the first half of this year. Two additional salespeople will be making house calls, calling on distributors to provide training on the use of catalogs as a sales aid.
More From Technology
Increased productivity are magical words in 2012. In order to increase their productivity, distributors are investing in new systems that will allow them to do more with less.
A 23% increase in sales in 2012 was booked prior to beginning the new year, says Randy McIntyre, president, DIS (Bellingham, WA). A new product to be introduced during the 1st quarter will allow distributors to invoice their customers electronically as part of a Customer Accounts Online package. McIntyre says, “We’re finding that process management software can provide a lot of solutions, but we still need to be face to face before we know which tools to utilize.”
As Ron Rogers, president, EBS (Houston, TX), reviews already booked business for 2012, he forecasts a 50% increase in sales. He says, “The distributors that we do business with have figured out how to survive. They have seen the bottom and now they’re starting to see some sales growth.” A combination of reduced headcount and a still-large population of older business systems are major factors when trying to forecast possible pent-up demand and its impact on productivity. During the 1st Quarter, the company will launch a web portal designed to allow the distributor’s end-user customer to monitor fleet data.
More From Storage & Handling
The exit of two manufacturers from the storage & handling industry created more activity for virtually everyone who survived the most recent economic downturn.
Pete Foley, vice president, Storage Masters (Binghamton, NY), says that his 2011 sales were more than 90% ahead of his 2010 sales. Expecting to increase those numbers by an additional 15% in 2012, Foley says the increased sales activity is just a sign that the economy is getting better. He also notes, “We recently became a stocking dealer for Republic Steel, so now we have clip shelving, rivet lock and lockers, which allow us to serve a broader base of customers.” Foley says that he is a problem solver, adding, “It’s not just having a product on hand that can quickly be shipped to the distributor; it’s a matter of being able to help that distributor solve his customers’ problem with the right product.”
Claiming two record-breaking years in a row, Tim True, vice president of sales and marketing, Borroughs Corporation (Kalamazoo, MI), forecasts a 20% increase in sales. True says, “It’s coming from, believe it or not, the automotive industry. They seem to have recovered very well and are acting on a lot of pent-up demand.” When talking about the partnership between his company and the distribution channel, he adds, “The distributor continues to look for competitive pricing, but it’s just as important to demonstrate reliability.
More From General Lines
Sales operations are going back to grassroots, face-to-face marketing, training and sales efforts. As suppliers network with each other and with their customers, it’s a win-win situation.
“Multi-national companies want their offshore operations to utilize the same drum handling equipment used in the states,” says Nate Andrews, vice president, Morse Mfg Co. (East Syracuse, NY). Expecting sales to increase by 4%, Andrews and another MHEDA member will jointly introduce a more ergonomic drum handler during the 3rd Quarter.
Bonnie DesJardin, president and CEO, Jesco Industries (Litchfield, MI), is forecasting a 15-20% sales increase and says that new products are supporting growth in 2012. The company will launch at least six new products this year. She says, “Specials are paving the way to the creation of new products.” An economy-style guard rail is launching this month, and a new pivot hopper will be introduced by the end of this quarter.
As the oldest air door manufacturer in the U.S., Mike Farber’s greatest challenge is to expand his market. The vice president of marketing for Berner International (New Castle, PA), expects his sales to increase by 25% by spending even more time on the road with an expanded rep force. With an emphasis on the Southwest and the Mountain States, he says, “We need to help the distributor and his customer to focus on what our product does in order to demonstrate the value associated with our products.”
More From Engineered Systems
As warehouses and manufacturing plants take advantage of a jobless recovery, they are making investments in capital equipment that will help them to thrive.
End-users are being forced to invest in their companies again, and those end-users will help to drive a projected sales growth of at least 10%, says Charlie Parks, vice president of sales and engineering, Roach Conveyors (Truman, AR). Parks exclaims, “Big retailers are spending money on their warehousing operations and on distribution. But we must still work our way back to previous sales volumes.”