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Defining MHEDA’s 2020 Material Handling Business Trends

MHEDA’s Chairman of the Board and CEO discuss the changes to next year’s Material Handling Business Trends and how they will shape the industry for the foreseeable future.

By Mike Vaughan, Liz Richards and Steve Guglielmo

Every year, the MHEDA Board of Directors releases their list of Material Handling Business Trends that will be shaping the material handling industry in the upcoming year. These lists deal with trends in the economy, customer behavior, technology and much more. These trends have been instrumental in not only organizational planning but also shape MHEDA’s educational events and editorial for The MHEDA Journal for the entire year. This year’s planning process included not only the MHEDA Executive Committee, but also members of the MHEDA MBOA, continuing a trend that began last year. We were able to sit down with 2019 MHEDA Chairman of the Board Mike Vaughan and MHEDA CEO Liz Richards to discuss the planning process and the final result. The full list of 2020 Material Handling Business Trends can be found on mheda.org as well as page 37.

The MHEDA Journal: Can you take readers behind the scenes for what the planning process of the Material Handling Business Trends looks like? Did you start with last year’s or start from scratch? How was the wording fine tuned? How did you arrive at the ideal number of trends?

Liz Richards: First we begin by asking the MHEDA Board of Directors and Manufacturers Board of Advisors to share the long-term and shortterm trends they see affecting their businesses and how customer demands are changing. We organize these responses into “buckets” as many of them share similar perspectives. Those that are mentioned most often are the trends we capture first and we build upon these. We don’t review the previous year’s trends until we have thoroughly discussed and considered the factors shared by the board but typically, there are trends mentioned the year before that are still critical today and will be in the foreseeable future.

Trends affect members differently depending on their industry segment (industrial truck, storage & handling, systems integration) and we make sure we have all segments represented when we discuss and define each trend during MHEDA’s summer Executive Committee (EC) Meeting. The EC meeting is when we kick off MHEDA’s annual strategic process which is high-level and purely strategic in nature. The trends provide us with a roadmap for planning the upcoming year of MHEDA’s programming and service to the membership. There is no ideal number of trends but typically we end up with 10-12 trends.

Mike Vaughan: The EC has employed the same strategic planning tool for several years. Annually the process of determining the MHBT starts with the Executive Committee meeting. In preparation for this meeting board members and the MBOA are polled to find out both the most pressing business challenges as well as the long term trends we see impacting the business/industry. The responses are boiled down to common themes and organized such that we can identify the most pressing of issues and whether certain trends are more relevant to one industry segment than another. There is significant discussion on these key trends because we are hoping to accomplish many goals within each trend, including being definitive on a sense of urgency and also, if possible, identify what the membership should be considering.

Generally we do not revisit the prior year MHBT until we have fully completed the current year analysis.

We are mindful of the number of trends to ensure that it’s manageable.

TMJ: MHEDA has been producing these Material Handling Business Trends for more than a decade. How has the process changed? For Mike, how has it changed just in the time you’ve been on the EC?

LR: This year, we took a step back and in addition to developing the trends for members to consider, we looked at the future of MHEDA. Prior to the EC meeting, we convened a group of members including current and former board members, past presidents and MHEDA staff to participate in a focus group meeting. In advance of that meeting, we surveyed members to ask some pointed questions about MHEDA today and how MHEDA might evolve based on industry demands, competitive forces, new generations entering the workforce, etc. Members provided very comprehensive and thoughtful feedback which laid the groundwork for the focus group meeting. A number of recommendations resulted from the meeting that were considered by the EC as part of the annual planning process. In addition to a recommended change to MHEDA’s Mission Statement and the defining of a Vision Statement, the MHEDA board will be developing value propositions for each industry segment as they differ depending on a member’s business. The bottom line is MHEDA wants to provide value to every member to ensure their success in the marketplace and to be the premier association in North America.

MV: With the advent of the Strategic planning process some 20 years ago the Executive Committee brought relevance and consistency to annual program planning by starting the process with evaluation of Internal/External factors impacting the industry and ultimately the MHBT. From my experience the process changed early in my EC year by not revisiting the prior year trends until we have completed the analysis of current year surveys. In addition, this year we also sought insight from a focus group meeting we organized in June. We felt that additional industry insight might be helpful as we also evaluate MHEDA’s ability to stay ahead of a rapidly changing industry.

TMJ: How can MHEDA members use these trends in their own strategic planning? How does Liftech use them?

LR: Every member should be using these trends as part of their own strategic planning process by bringing together their key managers and stakeholders to consider each trend and discuss how their organization will address them. Every trend should be viewed not only as a challenge but as an opportunity and one great idea can transform a business.

MV: Members can benefit greatly by using the MHBT to extend their vision of key elements impacting their businesses. We are hoping that members can use the trends to step outside of the day to day activities and think ahead to plan/develop initiatives to address challenges in their early stages before it’s too late and possibly catches the member off guard. We know that many members are using the MHBT in exactly this manner because the office gets inquiries each summer about the status of the newly developed MHBT.

Liftech first starts by sharing the MHBT with the 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 thoughout 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.

TMJ: Many trends are reoccurring issues from year to year. How do you balance “current” trends from things that you feel might become trends a few years down the line, even if they’re not happening right now?

LR: That’s a tough one as we have no crystal ball but it was quite a few years ago when it was clear that customers were demanding single sourcing and delivering automated solutions was going to provide a competitive edge. MHEDA board members have always had a heightened awareness of the trends and many of them expanded their businesses through acquisitions or got more involved in automation when that trend was first defined. Have you ever watched the show on the History Channel called The Men Who Build America? It’s about the great capitalists, Vanderbilt, Rockefeller, Carnegie, JP Morgan, etc. and it demonstrates how these visionaries recognized a trend and built their empires around it. Fascinating.

MV: Certainly the degree of reoccurance plays a role, because at some point the issue has been front and center long enough. This is the point at which it moves off the list and is included in the important trends that can’t be ignored. As mentioned before, we rely heavily on the survey results to determine how front and center the issues are on board member and MBOA minds. Within the discussion includes evaluation on whether “we can feel” that members are acting or we don’t feel it’s being addressed by members. If we can’t feel a sense of urgency from the membership we will continue to include the trend and evaluate the wording of the trend to better communicate its importance.

TMJ: Last year, for the first time, there were the non-numbered noted trends, that had been long-term trends but continued to be relevant. How do you determine when a trend is so ubiquitous that it doesn’t merit its own trend but is still worthy of inclusion?

LR: I’d say the biggest one is the cost of health care insurance. It’s critical but it’s the cost of doing business today. We continue to hold out hope that some administration will eventually enable a national trade association (i.e. MHEDA) the opportunity to provide an Association Health Plan without state regulations holding us back.

MV: It really gets back to how consistently it’s been discussed. And we can get a sense that the larger percentage of the membership has been actively involved with addressing the trends. Issues like health insurance continues to be very important to the membership however many members have taken steps to address it.

TMJ: For the past couple of years there has been a MBOA presence at the EC meeting, which continued this year. How beneficial has that been in the planning process? How have you seen that unique perspective improve the quality of the trends?

LR: Having the MBOA involved has been a great benefit in MHEDA’s Strategic Planning Process and in our overall governance. The main reason we formed the MBOA is because they have insight to and feedback from distributors from all across the country – both members and non-members – and they provide a perspective that we might not have considered. The MBOA also provides the EC with a Market Conditions Report defining the trends and customer demands that they have identified.

MV: The MBOA plays a very important role in the process. They bring perspectives that may not be part of members’ day-to-day discussions. We rely heavily on the MBOA for market and economic trends. There are times we can get trapped in our “distributor/consultant mindset” and it is extremely beneficial to get advice and take our blinders off.

TMJ: How has the wide cross-section of industry segments represented among the EC help enhance these trends?

LR: The business models of a system integrator, storage & handling distributor and lift truck dealer are all very different. As an example, the sales cycle can be much longer for an integrator. Skill sets required vary. The major asset for an integrator is their people versus a lift truck dealer with major investments in forklifts and parts inventory. Contractual relationships with manufacturers are much different. These diverse business models factor into our definitions of trends and many times, programming ideas evolve from these discussions.

MV: What we have found, by segmenting the survey results by industry segment input, is that we can identify trends that more heavily impact one segment versus the other. In addition, the Board nomination process works very hard to achieve industry segment diversity so that we get as complete an industry perspective as possible. And this transitions to diversity within the EC which is critical to the trend development.

TMJ: Any other important details readers should know?

LR: We welcome conversation from members who want to dive deeper into these trends and strongly encourage everyone to utilize these in their own planning process. And certainly let us know if there are others we should have considered!