Getting a Lift
As quality becomes a standard feature in the lift truck industry, the focus turns to added value and service.
By Bridget McCrea -- Industrial Distribution, 2/1/1998
1997 was a record year for the fork lift industry, and 1998 promises to be even better. By increasing North American production from 85,000 units (1983-1993), to 120,000 units (1994-1997), the industry has realized a 40 percent growth."The industry is larger than it's ever been," says Kevin Reardon, vice president of sales and marketing at Clark Material Handling Co. in Lexington, Ky. "It's due in part to the strong economy, and also because of low interest rates and a pent-up demand."
While the picture may be rosy, it's also evident that this unexpected surge in the forklift industry has left manufacturers with a new problem - a backlog of orders and a pool of unhappy distributors.
"1997 was the largest market in the history of the industry - both at the factory and at the retail level," says Frank Schafer, president of Hyster Co., in Danville, Ill. "Many manufacturers are realigning their production practices in an effort to gain internal efficiencies in inventory, and to reduce cycle times."
According to Bob Bilka, internal combustion product manager at Komatsu Forklift USA Inc. in Covington, Ga., poor lead times can be attributed to rapid industry growth: "When most manufacturers forecast the year, they never thought that the market would stay as strong as it has."
In addition to the nation's booming economy, another factor contributing to increased lift truck demand is improved product quality. "In that respect, customers know that many trucks on the market will do the job," explains Keith Allmandinger, director of marketing and product support for Nissan Forklift in Marengo, Ill. "So they turn their focus to manufacturers who provide the most added value, the best parts and service support."
The flood of fork lifts on the market, and their relative similarity, has led to the emergence of a very discerning consumer who expects competitive prices for dependable machines that can handle the workload. "Customers expect practical and functional machine designs at modest prices," says Colin Larsen, president of Blue Giant USA Corp. in Pell City, Ala. "They want trucks that do more than their predecessors for less money."
Most industry players feel that customer knowledge plays an integral role in brand selection. "There are customers who remain brand-sensitive," says Don Chance, president of Yale Materials Handling Corp. in Flemington, N.J. "Typically, this is because a company's operators are comfortable using a specific brand, or they're unwilling to expose the company to the risk of change."
Joe Planicka, national sales manager for Kalmar AC Inc., in Dublin, Ohio, adds: "The end user usually determines the brand because of an advertised price, a certain preference or past usage."
"There is very little difference between brands," says Arthur Erickson, president of Erickson's Fork Lifts Inc., a distributor in Albany, Ga. "When a manufacturer extols their own products, they're also doing it for the competition." Planicka concurs: "If you put fork lifts from five different manufacturers next to each other, you'll see they're all the same. The differences are minor, with maybe one of them having a different ergonomics package."
Ergonomics could be the deciding factor. Gone are the days when a driver plopped himself down on a threadbare seat for a day of stacking pallets. "We make roomy operator compartments," says Reardon, adding, "In the past, everything was bolted down, and maintenance was a real pain. Today, our forklifts have pop-up hoods, color coded wiring and schematics drawings under the hood."
Selling more
While manufacturers have realized a healthy sales growth over the past few years, some have also noticed customers are not keeping trucks as long as they used to. This is attributed to an effort to keep maintenance costs in check. "While some customers may find product interchangeable between brands, quality and reliability remain key when selecting a vendor," explains Chance. "Lift truck vendors will need to offer more services to customers as reliability of product becomes more of a constant."
He adds that customers are shifting from an ownership/maintenance focus to a fleet management focus. To satisfy customers' concerns, he advises lift truck suppliers establish a "team selling" approach. "Yale has found it is best to build a relationship with a customer by offering solutions to material handling problems," says Chance. "This works better than the old 'ours is better than theirs' way of selling."
"Flexible financing offers seem to be the most effective selling tools," says Erickson. "Skipping payments, accepting large down payments; customers like a variety of options." Leasing has also become very popular.
Manufacturers and dealers agree that getting their trucks in front of the customer is most important. "The best thing we can do to make the sale is to demonstrate the product," says Mickey Akins, owner and president of AF Enterprises, a dealer based in Texarkana, Texas.
"Buyers are becoming more sophisticated; their list of wants has become more defined," adds Reardon. "Years ago you could get by simply faxing a quote to get an order. Today, the most effective way is to bring the equipment to the customer's location and demo it."
It's no big secret that manufacturers need distributors, and vice versa. Both parties also have high expectations of each other. Support, quality and competitive pricing are key issues on the distributor's end. "We want good lead times and we need manufacturers to be more 'new product oriented' by filling the voids in their product offerings," says Robert Hull, president of Hull Lift Truck Inc. in Elkhart, Ind. "The fuller their line is, the less dependent we are on a second supplier."
Dennis Christensen, president of Accurate Forklift, Inc., in Santa Rosa, Calif., says, "The dealer should expect the manufacturer to be responsive to 'real world' input distributors can provide. Open and honest communication from the manufacturer as well as dealer development and organizational team building are essential for any network to grow and prosper."
"Lift truck manufacturers need distributors who are constantly striving to deliver superior customer service," says Chance. "They look for distributors who want to be the best in their primary markets."
Another key concern for manufacturers is the care and feeding of end users. "We want our customers to be served with the most professional and geographically comprehensive lift truck dealerships in the marketplace," says Schafer.
"We want coverage," states Planicka. "Many distributors carry multiple brands, and our problem is getting 'share of mind' for our product.
And Mark Rossler, marketing manager for Baker Material Handling Corp. in Summerville, N.C., agrees: "We want a total commitment to our product lines. There are an awful lot of manufacturers in the industry and not enough distribution outlets," says Rossler, who's been with Baker for 20 years, and remembers when all distributors had "clean lines."
Cooperating for profit
Not every manufacturer and distributor sees eye to eye, but that doesn't lessen the need for cooperation between the two parties.
"Dealers and manufacturers work together to add value for their customers," says Allmandinger. "Added value can come in the form of financial merchandising, maintenance and service packages, additional warranties, guaranteed parts availability, and special product modifications and customizations." While industry experts express a diverse array of views, all seem to agree that customers want a quality product at a fair price from a dealer who can offer excellent support and added value. Couple those elements with an effective support network between manufacturer and distributor, and you end up with a winning combination in this increasingly competitive industry.
EDITOR'S NOTE: Bridget McCrea is a freelance writer who lives in Florida. She can be reached at 813-446-9536.
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