Ask Your Board – Material Handling Business Trends

November 3, 2019

“How does your company use the annual MHEDA Material Handling Business Trends when doing your strategic planning for the next year?” – Asked by Lindsay R. Boors, Controller at Pennwest Toyota Lift in Mount Pleasant, PA Michael Vaughan, CFO, Liftech Equipment Companies, Inc., E. Syracuse, NY Liftech first starts by sharing the MHBT with our Senior Executive team, each with a responsibility of a specific element of the business. It gives me the opportunity to share the input that was evaluated and answer questions that the group may have. Within that discussion we can then evaluate whether we have initiatives in place or planning needs to begin to address. In addition, as I travel throughout the branches and attend local meetings, it gives me an opportunity to share this valuable insight and paint a picture for what the future may look like. This is tremendously important to help employees understand why actions/initiatives that have historically produced results may no longer be effective. Doug Carson, VP- Marketing & Sales, Fallsway Equipment Company, Akron, OH At Fallsway, we kick off our strategic planning process in the November timeframe with a meeting attended by all managers. One of the primary focuses is a review and discussion of the current Material Handling Business Trends. We ask all managers to consider the trends while putting their plan together for the coming year and consider how they can work with other departments to best address the related opportunities and challenges. Ted Springer, President, Springer Equipment Company, Birmingham, AL MHEDA’s Material Handling Business Trends are one of the most important tools we use during our strategic planning sessions with our staff. We begin the process by reviewing the Business Trends in advance of our planning meetings and ask two questions: 1) How are the trends affecting us? and 2) How are we addressing them? Each staff member will rank the trends in the order they feel affects their department or their role as a staff manager. As labor shortages and margin pressure remain a constant, many of the Material Handling Business Trends change each year. We always work to identify one or more of the trends that present an opportunity for our business in the coming year. For example, MHEDA’s 2019 Material Handling Business Trend number 5, “Automated solutions are increasingly in demand and members need to identify and add the resources and relationships necessary (products/people/technologies) to address these sales and service opportunities.” This year we worked to identify and add the resources for this trend and developed a relationship that will pay off for years to come. Our 2020 strategic business plan will involve the same proactive approach to our market. Utilizing MHEDA’s Material Handling Business Trends allows us to think outside the box and ensures the future success of our company family members and our dealership! Thomas Albero, President & CEO, Alliance Material Handling, Inc. Jessup, MD As soon as the MHEDA Material Handling Business Trends are released, I forward them to our leadership team. Typically, these trends are discussed amongst the leadership team in a variety of settings – Our weekly L10 meetings, offsite quarterly management sessions and individual department meetings. We also have a twoday offsite management retreat where we spend the majority of the time discussing strategic planning for the next year. We adopted the Entrepreneurial Operating System (EOS) methodology for strategic planning and goal setting. We spend a lot of time on what is called the Vision/Traction Organizer (VTO). A key section of VTO is setting goals (Rocks) and understanding what Issues we face that may create a challenge for us in reaching these goals. It is at this time that we brainstorm on all potential issues. The MHEDA Material Handling Business Trends are a great resource to start these conversations. Throughout the year we look at the MHEDA programs that are being offered. Many of these programs specifically address the Material Handling Business Trends. We then determine who is the best person in our company to participate in the program and have that individual present a summary of what they learned to the Leadership team in our weekly L10 meeting. John L. Gelsimino, President, All Lift Service Co Inc. Willoughby, OH I personally look forward to the MHEDA Material Handling Business Trends each year. Often the items on the list are the exact same issues that we are actively dealing with or considering. This list helps me prioritize where our resources and energy are spent in the coming year. I take much joy in reading a trend and mentally thinking “Check That Box – We Have That Covered!” In our most recent sales meeting, we reviewed the list of trends and spent some time discussing each one and how well we were addressing these as an organization. To not use and discuss the MHEDA Material Handling Business Trends as a part of the strategic planning process just wouldn’t make sense to me. This list of trends also makes for great MHEDA-NET topics of conversation. Be sure to use this list when planning your groups topics to discuss. Todd Maxwell, COO, RMH Systems, Waukee, IA At RMH Systems, we create an annual action plan that is developed in the fall of each year prior to the budget process. The action plan will highlight the areas that we need to focus on for the upcoming year. When developing the action plan, we will go through each of the Material Handling Business Trends to determine if it will impact our business. For the business trends that will impact our business, the management team will discuss the most likely impact it will have and then what actions we can take to address it. The Material Handling Business Trends ensure that we address issues and opportunities now and not when they are presented to us in our markets. I would encourage all members to add the review of the MHEDA Material Handling Business Trends to their strategic planning process. Just the discussion of each trend amongst your management team will enhance your planning process. Connie Costner, President, Mathand, Woodstock, GA We use the Material Handling Business Trends as a means to future-proof our business. These business trends are prepared through the insight of many people, in many aspects of material handling, across many states. We can look at these business trends to first evaluate whether they apply to Storage and Handling and then how the trends could potentially affect our business in the coming year. For example, Business Trend number 5, “Automated solutions are increasingly in demand and members need to identify and add the resources and relationships necessary (products/people/technologies) to address these sales and service opportunities.” As a company, we look at this trend and evaluate how automation can be used in our business internally, and also externally with our customers. Internally, we consider our processes, the software we use and the functions our employees complete. We involve employees across teams to determine if we are performing manual processes that can be replaced by an automated process to be more efficient and accurate. Externally, we have been strategically working with material handling automation vendors to partner with them to introduce their products to our customer base. We are preparing employees for training in the area of automation equipment and having our equipment installers trained for the installation, maintenance, and repair of automated equipment. Overall, I believe the business trends help us to more strategically plan for the future of our business. Jeff Darling, VP Operations, Washington Liftruck, Inc. Seattle, WA As a management team, we individually and collectively review these business trends prior to forecasting for the coming year(s). This insight from MHEDA always encapsulates those major factors that impact our ability to do business every day and in the future. At times, we lose focus of these extraneous factors. As the old adage says, “we can’t see the forest for the trees.” The insight provided by this synopsis of these impacts on our industry and individual businesses, will allow us to maximize business opportunities regardless of the economic climate. May 2020 be a GREAT year for you and your company! Gregory Brown, President, W.W. Cannon, LLC, Dallas, TX Material Handling Business Trends are evaluated and discussed during a yearly Strategic Planning Meeting. Those material handling business trends that we conclude will have the most impact are prioritized and a committee is formed to create action items to address those trends. If management and the committee agree that those action items should be incorporated into the business model, target dates are set to implement. Hal Ingram, DVP, Gregory Poole Equipment Company, Raleigh, NC At Gregory Poole, we begin the Strategic Planning Process doing a Situational Analysis with various departmental team members, encompassing all aspects of the business, to contribute their thoughts and expertise on the following topics:

• Economic factors – such as impacts of tariffs on globally sourced products
• Environmental factors – such as oil/coal vs. solar/ electric
• Internal Issues – such as retirement of a portion of the workforce
• Technology – what hurdles will we need to overcome with business systems, CRM, etc.
• Regulatory – what new standards with which we must be compliant in order to service key customers
• Customer expectations – what they expect from a first-class provider
• Partner expectations – are the goals set agreed upon and realistic
• Competitive considerations – new products, new markets, new overseas players

Next, we prioritize what we feel are the 3 to 7 most important statements in each category above. Then, we have a detailed session on Critical Assumptions for the upcoming year. During these sessions we are committed to open and fearless communication in which all concerns are addressed, and all participants are allowed to present supporting data so that we can make business decisions based on group input, dialog, debate and consensus. Examples might be:

• Is the economy expected to grow or retract?
• How will tariffs on globally sourced products will affect your business?
• What will interest rates do?
• Will you continue to partner with the same OEM suppliers?
• What key things must happen for success to occur?

Now is where the MHEDA Business Trends are used to bring value. Compare your organization’s Critical Assumptions with the MHEDA Business Trends. Do they align? Does a review of the MHEDA Business Trends cause more Critical Assumptions to be added or changed? With the information you now have, your team has plenty to consider to determine what is most important to work on in the upcoming year. From a governance standpoint, it is imperative to go back and review the agreed upon Critical Assumptions from the previous year’s planning and answer these questions:

• What did we not anticipate? (Labor force availability, succession planning, etc.)
• What went well? (Tactics and strategic decisions based on proactive planning)
• What adjustments should have been made? (What were the impacts on the business)
• What are the “So What’s”? (You were right, but did not really affect anything)

In summary, the MHEDA Material Handling Business Trends are a key aspect of how we plan for the upcoming year by benchmarking our own strategic initiatives with those of the industry at large. For the most part the MHEDA Material Handling Business Trends are very accurate and have helped us greatly in charting the course for success in the upcoming years. Nate Storey, VP of Operations Storage Solutions, Inc. Westfield, IN At Storage Solutions, Inc. we use the annual MHEDA Material Handling Business Trends to help us stop, continue or change our course on the strategic pathways we have put into place. Our 4 pathways are: People, Internal Processes, Customer & Financial. We use the business trends to help us determine what types of internal projects within these 4 pathways we should focus on for the next year. A few examples of the projects we have done or are working on are: looking at who and what kind of roles we should be hiring. We realized a few years ago that having an established onboarding process was critical to getting new hires up to productivity quickly. We have created a new division within SSI to provide automated solutions to customers with those needs. We are anticipating an economic softening in our industry and are therefore looking at how we can ensure that we continue to capture our market share in a downturn. The Material Handling Business Trends provide us with thought provoking content that we can use to help our company succeed into the future. Tim Hoj, Chief Executive Officer, Hoj Innovations, Salt Lake City, UT Ours may be a little informal. However, we reference the collective trends list and review in an executive meeting. Our COO will do a preliminary review of how our company is addressing the topics listed in the trends to determine if these are currently on our radar as an area of focus and or improvement. It is comforting that much of the list is already a focus, as a validation of direction and sometimes there is a surprise area of focus that has slipped by that will require us to start addressing the market or research for a specific area of focus. We find the trends useful in helping to focus our areas of attention. Jim MacGregor, Vice President of Operations, Toyota Forklifts of Atlanta Lawrenceville, GA At Toyota Forklifts of Atlanta, we calendar a multi-day Strategic Planning Meeting to be held in the Fall each year. At that meeting Corporate Departmental Managers and the Executive Team review and discuss market trends, current economic conditions and economic forecasts from reliable sources. At the forefront is the Annual “Material Handling Business Trends” from MHEDA. Understanding that MHEDA offers this to its members as a free service is reassuring as industry experts are weighing in on what members endure each business day. Topics are broad and address much more than economic trends. Many other topics can significantly impact our ability to sustain and grow. Managing multi-generational workforces seems to be at the top of everyone’s current challenges, but MHEDA is always there to put a spotlight on the topics affecting us all, reassuring us that we are not the only company faced with similar challenges. Whether its Global Trade and Tariffs, consolidations and acquisitions, the impact on third party providers, to strategies intended to retain our workforce talent. Solid strategies have ensued from the Strategic Planning Meetings such as a new and improved “On Boarding Process,” a Technician Apprentice Program and more. MHEDA’s Material Handling Business Trends showed last year that all of those topics were increasingly important and reassured us that we were focusing on the right issues at the right time. This annual analysis has served us well for years and will always be a part of our Strategic Planning moving forward.