Distribution headwinds

Improve productivity and reduce costs. Those are the deliverables promised my just about 100% of the ads you read regarding both warehouse space and manufacturing floors. The scary part is that these rewards result from robotics, a lower headcount, and a specific claim to reduce equipment Cap X by $200000 to $400000. Great results for the distribution centers and manufacturers, but not so great for the material handling dealers since those references to Cap-X spend probably represent what you are selling and renting, selling parts for and providing maintenance on.

If the distribution technology potential improvements are not enough to deal with, you now have the national retail entities offering distribution and delivery services for goods they did not sell. I had to study this for a bit, but it does make sense if a distributor wants to expand their warehouse locations to be closer to their customers, or just looking for a way to simplify their product delivery.

Amazon and Walmart are two of the national companies that move products to just about every city in the country. So why not add other goods to their delivery trucks to stock a local warehouse or deliver the product to the end user.

As of today, Amazon is just providing this service for companies selling products via Amazon. It is expected they will expand to non-sellers if this initial venture proves to be profitable.

Walmart will provide the service for any vendor where it makes sense to do so.

When you think about it these programs make sense if the seller’s goal is to improve logistics problems, allowing faster delivery times for less cost. A win-win.

Again, I would like to consider the impact of this type of program on the material handling business. And again, I arrive at potential negative impact.

Inventories currently stored, in a facility you now provide equipment and support to, may now be moved out of your territory or placed into a facility you do not do business with

Inventories may be relocated to various locations across the country where you do not do business.

New business coming into your territory may be under an Amazon or Walmart contract where they provide the material handling services.

I can see this type of service expanding at the expense of your bottom line.

Let’s face it, manufacturers and distributors want to sell and deliver faster, and will use methods to achieve those goals because when compared to their current process it costs less and adds to customer satisfaction.

The point here is the demand for material handling services in your territory could decline because the robots are moving and counting the inventory, or building product in a robotic production line, or because there is less inventory to work with because it has been moved out of the territory.

So how does Material Handling Management deal with this situation?

• Be a source for the technological improvements distributors and manufacturers need.

• Be a resource to maintain the new systems being installed.

• Partner up with independent professionals who can help prepare a plan of action and system selection.

• Educate customers about potential changes needed to remain competitive.

• Outsource to get what you need to put this plan into place.

Let’s assume these changes will take place. What else do you need to remain profitable and competitive?

• Prepare a budget reflecting slower unit sales and adjustments for parts and service.

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• Add new revenue sources once you have a plan in place to offer new services.

• Find and implement technology to reduce headcount and reduce costs.

• Further tune the budget to where GP margin can cover expenses, interest and taxes.

• Use these new metrics to become more competitive in your region.

• Add new business.

• Make customers want to work with YOU!

I have this type of conversation with dealers and rental companies on a regular basis. Most of the time the discussion revolves around exit planning, be it current or five- years off. What I tell them is do it NOW if they are a current seller, before the ---- hits the fan and you have a 10-year window before values improve to where they are today. If they want to stay another five years, I suggest they will have to make the improvements mentioned above to keep the value up, and if they can’t stomach the aggravation and cost, to execute the exit as soon as possible, because the alternative is the risk of lower values even though the technology improvements were made to stay competitive. Maybe there is something in between where you can get some money off the table and remain on board to help the company move forward.

None of this is easy to deal with. But industries go through cycles, with a need to make major adjustments to generate adequate free cash flow that covers the nut. But to try and push these changes through just working with your current personnel is very questionable. This is why I suggest outsourcing to determine the changes required, the solutions available and the time and cost to make conversions.

Lilia Mounsi Robotic Solutions Engineer Balyo

Lilia has been with BALYO since 2018. Originally, Lilia was a field engineer responsible for deploying BALYO robotic driverless forklifts at customer sites across Europe. Lilia's talent for solving complex problems in logistics and automation saw her quickly move to the European solutions team. In 2023 Lilia's scope broadened to Global Solutions Engineer. Lilia has 7 years of experience in robotics and holds a degree from the University of Technology of Compiègne in Paris.

Katie Yates Senior Distribution Manager Carolina Handling

As Senior Distribution Manager, Katie Yates manages Carolina Handling’s logistics and distribution teams including rental, renewed and new equipment installation technicians, transportation specialists, power management specialists, dock associates and logistics coordinators.

A native of Florida, Yates joined Carolina Handling in 2007 as a Rental Coordinator in the company’s Atlanta office, serving in various supervisory roles before being named Senior Distribution Manager in 2023. She is the recipient of Carolina Handling’s 2023 Pinnacle Award, the company’s highest honor.

Nikole Hoffman Production Lead / Graphic Design Material Handling Wholesaler

Hayley Chavarria Vice President of Portfolio Risk First Financial Equipment Leasing

Hayley Chavarria serves as the Vice President of Portfolio Risk at First Financial.

With over 35 years of experience in the field, Hayley is responsible for a range of critical duties within the organization. These include overseeing all activities in the portfolio department, managing residual risks, and enhancing lease profitability. Additionally, she is responsible for asset, lease, and customer portfolio reporting, asset valuations, and devising profitable end-of-lease strategies.

Elise Hardy Vice President of Sales First Financial Equipment Leasing

Elise Hardy has made remarkable strides in her career at First Financial Equipment Leasing. Her unwavering dedication and hard work have led to her securing top-notch clients and doubling the company's material handling transactions. Moreover, as the first female Salesperson of the Year for 2021, Elise has proven herself to be a reliable and trusted advisor in the industry. Her achievements speak volumes about her expertise and professionalism, and she consistently ranks among the company's top producers.

Nikole has worked with Wholesaler since August 2019. She performs all work necessary to produce print/electronic publications, e-newsletters and maintenance of the website. She ensures that all of our print and electronic products, cover designs, promotional materials, and customer ads are superior in design and reflect a professional image of our company and for our advertisers.

Sherriana KarimSalas Sales Forklift-International

After a hiatus I returned to Forklift International in early July. Just in the past few months I have seen this industry grow and shift immensely. I am happy that I get to connect with such great people through sales and discuss with them our amazing Marketplace platform. It is like "when you know something is terrific and you want to share it with the whole world because you know they would love it".

Michelle Butler Midwest Branch Manager

Flight Systems Industrial Products

Michelle Butler joined FSIP in December 2008 as a Customer Service Representative. She has since received several promotions that have ultimately landed her in Addison, IL, as our Branch Manager of our Midwest office. Her knowledge of our products and customer base has helped her succeed in managing this location and making sure our customers receive the best service possible.

Pam Jones General Manager Flight

Systems Industrial Products

Pam is celebrating 17 years with Flight Systems Industrial Products (FSIP). As General Manager, she is tasked with the oversight of the staff, operations, strategic planning, sales and marketing, finance, product development, and customer satisfaction. She is proud to lead and collaborate with a dedicated team of employees that work to excel in customer satisfaction and quality electronic solutions and services. She looks forward to what the future brings as FSIP continues to grow and evolve.

Jodi Morelock Marketing Manager Flight Systems Industrial Products

As one of the newest members of the FSIP team, Jodi Morelock has held the position of Marketing Manager since March of 2023. With over 15 years of experience in marketing and advertising, Jodi brings a fresh set of eyes to FSIP’s brand which is imperative to future business development. Her team supports the success of all departments with its marketing expertise.

Libby Allman VP Logistics Americas TVH

Libby Allman has been with TVH for just over a year but is a seasoned professional with a longstanding career in Supply Chain, Operations and Manufacturing. For over 20 years, Libby held leadership roles at Hallmark in Supply Chain (Manufacturing, Global Procurement and Distribution), IT and Corporate Lean. As VP Logistics Americas for TVH, she will further develop operations within the Americas region. She will be responsible for expanding and strengthening our operational footprint, leading our continued rapid growth and building a future-proof distribution structure to support continued success.

Reva Bily President West Point Rack

As president, Reva is involved in every aspect of West Point Rack, including configuring and pricing quotes, purchasing steel and, as she puts it, “doing whatever it takes to get the job done.” Her primary goal is “to support our dealers, satisfy their customers, earn trust and be the vendor of choice for rack products and racking systems.” www.MHWmag.com