by Clyde E. Witt, executive editor
Each year the editors of Material Handling Management solicit names of Material Handling Equipment Distributors Association (MHEDA) members who demonstrate exceptional skill and enterprise in adding value to clients’ businesses. We review the list of candidates and select one company we feel best exemplifies the term value-added. This year’s winner is Wisconsin Lift Truck of Brookfield, Wisconsin.
It might seem hard to believe that a person can start a business in a rental garage and, in 40 short years, grow that business to more than $100 million in annual revenues. That’s precisely what Otto Wolter, president and CEO, Wisconsin Lift Truck, has done.
Wolter’s formula for success is a simple one: work hard, start young, work hard, follow your beliefs, work hard and don’t look back. He’s also quick to add, hire the right people — and work hard.
Now that he has achieved more than a modicum of success, Wolter, with a sparkle in his eye, says he’s cutting back on the hard-work regimen so he has to come to the office only six days a week instead of seven.
Wisconsin Lift Truck (WLT) has consistently been recognized as one of the state’s leading companies. In the past two years, its expansion has included a new corporate headquarters building in Brookfield (expanded to include a branch of the distributorship), new buildings in other regions of Wisconsin and Illinois, and several start-up companies, acquisitions and consolidations. All this activity has elevated the company to 49th on the list of Largest Wisconsin Area Private Companies.
Asked why he has stuck with lift trucks at a time when other distributors are divesting themselves of lift truck lines, Wolter is quick to respond, “It’s the only thing I know!”
On a more serious note, Wolter says he’s been taking a long, hard look at the lift truck business. Selling trucks is becoming more of a commodity-type transaction. “Trucks do take a lot more energy to sell,” he adds, “with a lot more expenses and dwindling margins.” Today’s market has been price-sensitive for seven or eight years, he notes, bucking the usual economic cycles of shorter, rather than longer periods.
What this type of economy has done, says Wolter, is force people to continuously find ways to be more efficient if they want to survive. “We look at our business almost on a weekly basis to find those opportunities,” he says.
Jerry Weidmann, COO, has been with the company for 10 years. He’s charged with getting the company onto the cutting edge of technology and applying that knowledge to the lift truck business. “Any piece of material handling equipment can become a commodity,” explains Weidmann, “but what adds value in being a distributor is the ability to examine the flow of the customer’s products and use that information, with your knowledge, to select the right equipment.”
He adds that WLT now makes an initial study that includes (what he terms) initial resource assessments as well as safety factors. “We look at all the resources available to move material,” he says. “It might be the lift truck fleet, conveyors, storage systems or other non-wheel-oriented methods.” The survey his people complete identifies the objectives of the customer and compares those objectives with best-of-class operations.
Weidmann has launched an initiative to restructure the company’s branches, as well as the corporate headquarters, to support the resource program. He adds that typically, when they do a fleet assessment for a client, they find that fewer pieces of material handling equipment (than the client is currently using) are required. “We find alternative methods of storage and conveyance. Re-slotting the warehouse, for example, might help the client decide not to invest in a new building,” says Weidmann.
Weidmann adds that while assisting the client to shrink or shift the amount or kinds of equipment required, value to the distributor can be added by shifting the client’s source of equipment. If you can provide the solutions for the client, you can acquire the client’s loyalty and business, he says. “The objective is not to just sell more of what you offer, but the right mix of what you offer for the client’s material handling needs.”
Another area WLT has found profitable is information-for-the-customer gathering. Every time the distributor’s technicians do a service job, the hours and points of abuse on equipment are noted. This information is then given back to the client’s supervisors. That information can, in turn, be used by WLT to assist its sales staff in gaining knowledge and making recommendations.
This might seem like a simple, even obvious thing to do, but Weidmann says it has required a complete redesign of WLT’s parts and service program. Because the company handles many lift truck lines, its parts department is staggering in size. The computerized inventory is valued at more than $2.5 million and accounts for an estimated 60 percent of the company’s profits. WLT carries OEM parts for all the lines of trucks it handles, plus parts for virtually all other major lift truck brands.
It currently has a fleet of more than 130 service vans on the road, and more than 50 of its 500 employees take pride in the fact that they have 20 or more years of service with the company. To ensure customers that parts will always be available, particularly in times of greatest need, the company has its own power generators for back-up if public power is not available.
Material handling in the information age
WLT’s customer assessment program has been in operation for about four years. While any client is naturally sensitive to how it does business, key to success of the program has been personal contact with the client. The program’s greatest asset is the fact that WLT sees what the customer is doing and applies that knowledge to what it knows to be the norm. That’s where the value can be added.
“Quite often,” explains Weidmann, “the eventual strategy the client employs is a combination of our assessment, coupled with what the client knows about its own operation.”
Changing with the times
Wolter says the biggest change he has seen since his start in the industry is how customers have cut budgets to the point where the things WLT does are things the client no longer has staff to do. “It used to be,” he says, “every company I dealt with had a material handling engineer and an assist staff. Now, those positions are gone, and the customer has no idea of the cost-per-hour to run a lift truck, for example.”
Wolter suggests that distributorships like his have become specialists. And while he might not know how to make castings in a foundry, for example, he does know how to assess, recommend and maintain lift trucks for an estimated 95 percent of the companies WLT visits.
WLT has come a long way since Otto Wolter began his career behind the parts counter of a Clark distributorship at age 16. Is there still a future for small- to mid-size distributors? Wolter thinks so — if they are run efficiently.
“The small distributor can still compete on lift truck sales,” says Wolter, “even though base-pricing might be different. When you get into big deals, price is not always a factor. It depends on the talent they [the small distributors] have and how hard they work.”
He adds, the lines they handle are also critical. There will always be entrepreneurs who leave a big company to start on their own. “We’ve grown primarily through gains in market share or remaining steady in declining economies,” says Wolter.
WLT has long advertised — and it reflects Wolter’s business philosophy — that WLT is “The Source.” He says this means having the products an account needs, when he needs them. This includes niche products as well, which might require you to take on other lines to round out your company’s product portfolio. Adding product lines brings more value to the customer. That value might be in the form of less maintenance or selling features on a piece of equipment other manufacturers don’t offer.
Currently, the heart of WLT’s business is lift truck leasing, fleet management and parts sales. Customers are interested in getting out of the lift truck business because they don’t have the staff to maintain vehicles or stock parts. “They have peaks and valleys in their business,” says Wolter, “and they’d like to be flexible. It’s a matter of putting together what the client needs with what we offer to come to an agreement.”
Weidmann says one of the things the company is focusing on in 2002 is better use of its assessment strategy and the meetings customer service reps have with accounts. Those meetings will more often be an assessment of customer needs than a follow-up on a specific sale.
“If our reps have a broader knowledge of the products available,” says Weidmann, “and a broader awareness of customer needs, the products and services they bring to the customer will have more value.” He says the approach is to take what has been thought of as the traditional sales process and turn it into a consultative sales process.
Keeping pace with technology
How can a distributor keep pace with changing technology? Weidmann and Wolter agree, a big investment has to be made if you want to be efficient and profitable. WLT has four full-time programmers to automate manual processes so it can increase business without adding staff.
Wolter says distributing material handling equipment might seem like a commodity business with lots of technology, but it’s still humans who do the buying. “It’s still about how you present your program and whether the client likes you.” He adds that there’s always a way to do something better. It’s a matter of constantly analyzing what you’re doing.
Asked if Web sites are of value to a distributor, Wolter says currently Web sites are more valuable for identification of the business than anything else.
The Web has proven valuable for WLT’s lift truck operator training program. The company has led the country in driver training programs. It was the first distributorship to offer a national program. Weidmann says the company has trained more than 40,000 operators and 4,000 trainers since it established its Corporate Training Division in 1990.
Taking on the challenges of the lift truck business is what has given WLT its strength. Wolter explains that if you are a large distributor and have one major supplier affiliation, you could possibly be headed for trouble. In his experience, Wolter has represented manufacturers that have had labor disputes, for example, and he was left with no product to sell.
There are always changes in management of manufacturers, and their business philosophies, Wolter says. “If the manufacturers can’t deliver trucks or parts on time — for whatever the reason — the result is lost orders.”
What he seeks is the perfect distributorship/manufacturer partnership that features on-time delivery of trucks and parts, coupled with field representation and innovation on the part of the manufacturer. The end result would be no lost orders.
That would be a big order, but it’s the thing that has given WLT strength, and in the process, enables it to add value to its customers for 40 years. MHM
For More Information
Wisconsin Lift Truck represents a full line of material handling equipment — more than 40 companies. Some of its major lines are:
Cascade Corp., cascorp.com;
Caterpillar Inc., cat-lift.com;
Drexel Industries LLC, drexeltrucks.com;
Eagle Picher, eaglepicherindustries.com;
E-Z Go, ezgo.textron.com;
Genie Industries, genielift.com;
Komatsu Forklift (USA) Inc. komatsuforkliftusa.com;
Minuteman Powerboss, minutemanintl.com;
Mitsubishi Forklift Trucks, mit-lift.com;
Nissan Forklift Corp., nissanforklift.com;
Riggers Manufacturing, riggers.com;
Schaeff Inc., schaeff.com;
Taylor Machine; taylorbigred.com;
Trackmobile Inc., trackmobile.com
UpRight Inc., upright.com.