MHI brings Industry together for ProMatDX
ProMatDX brought the manufacturing and supply chain industry together April 12 -16, with over 17,000 attendees learning, engaging, and discovering equipment and technology innovations to build supply chain resilience amid disruption. ProMatDX included 360 sponsor showcases, four keynotes, 106 seminars and 650 product demonstrations, 18 roundtables, 12 Live from ProMatDX sessions, and five daily recaps, all with a big focus on automation and emerging technology solutions. All in all, the ProMatDX had 778,927 total interactions during the week and the event lives on as all content is now available on-demand until September 15, 2021. Attendees included key decision-makers in virtually all manufacturing and supply chain industries, including most of the Fortune 1000 and Top 100 Retailers. ProMatDX attendees represented 124 countries and six continents. “The success of ProMatDX is proof of not only the strength of our industry but of the value that ProMat continues to deliver as a best-in-class supply chain event experience for manufacturing and supply chain professionals,” says John Paxton, CEO of MHI. “MHI was dedicated to creating the best digital environment for sponsors to showcase their cutting-edge solutions to an industry that needs these solutions now more than ever.” According to registration data, 81 percent of attendees had buying authority, and 32 percent plan on spending $1 million or more over the next 18 months on equipment and systems. Other ProMatDX Highlights Other ProMatDX highlights included four keynotes on topics of supply chain innovation, resilience, and women in the supply chain. Keynotes also included a keynote panel discussing the findings of the 2021 MHI Annual Industry Report – “Innovation-Driven Resilience.” The topics of the top 10 seminars and product demonstrations by total views highlight the growing demand for automated and emerging tech solutions for supply chains. Top 10 ProMatDX Seminars A Guide to E-Commerce Order Fulfillment High Performing Returns, Order Fulfillment & Sortation Technologies Utilizing AMRs Fundamentals of Robotic Order Picking How to Leverage Robotics and Automation to Build a Successful Last Leg Fulfillment Operation Calculating the True Cost of Your Operations (and using it to justify change) The Future of Online Order Fulfillment Automation, Integration & Energy Systems A Practical Approach to Modernizing Your Warehouse When to use AMR vs. conveyor The robots have eyes! Why robot fulfillment applications depend on the latest sensor technology. Top 10 ProMatDX Product Demos Bolt the Power to Do More Drones For Automating Inventory Cycle Counting Geek+ Picking Robots – Goods-to-Person System Raymond Courier automated lift trucks Automated Solutions for Every Challenge – From Simple to Advanced End-of-Line Automation – Solutions to Improve Efficiency Dematic Flexible Mixed Case Fulfillment Solution The Business Case For Case Picking With AMRs Flexible Warehouse Automation – How Boston Dynamics is changing your idea of what robots can do Seegrid: Taking Your Entire AMR Fleet to the Next Level 2021 MHI Innovation Awards On April 12, MHI also announced the winners of the 2021 MHI Innovation Awards: Best New Product ThruWave, Inc. for ThruWave X2 mmWave Imaging System Best IT Innovation 4Front Engineered Solutions for 4SIGHT Connect Digital Gate Best Innovation of an Existing Product Packsize International LLC for Packsize X7 Automated In-line Packaging and Fulfillment Solution ProMatDX Challenge The ProMatDX Challenge winner of a $5,000 trip voucher and a $5,000 donation in their name to Feeding America was Chuck Boyer of Precision Planting. Overall, ProMatDX donated $10,000 to Feeding America in the names of the contest winners as well as our keynote panelists. ll ProMatDX sponsor showcases, seminars, and product demos are available on-demand through September 15, 2021, at promatshow.com. The next MHI-sponsored trade event will be MODEX 2022, March 28-31, 2022 in Atlanta’s Georgia World Congress Center. For more information on exhibiting at MODEX 2022, or to register as an attendee, visit modexshow.com. ProMat 2023 will be held at McCormick Place from March 20-23, 2023. “MHI is excited to once again deliver the unique value you can only get from face-to-face expositions at MODEX 2022,” says Daniel McKinnon, EVP of Exhibitions at MHI. “Plans are currently underway to deliver this world-class supply chain event next March in Atlanta, Georgia.”
Bonnie Michael named 2021 Recipient of the Edward A. Groobert Award for Legal Excellence from ELFA
The Equipment Leasing and Finance Association (ELFA) has awarded Bonnie Michael, Vice President Legal and Compliance USA for Volvo Financial Services, the Edward A. Groobert Award for Legal Excellence. ELFA Legal Committee Chair Lisa Moore, Senior Counsel at PNC Equipment Finance, LLC, presented the award to Bonnie on May 4 at ELFA Legal Forum LIVE! in recognition of her significant contributions to the association and the equipment finance industry. Bonnie has over two decades of experience representing equipment finance companies and the financial services industry. She joined Volvo Financial Services as General Counsel in 2010 and has led the USA legal team since then. In her current role, she monitors the broad spectrum of legal and regulatory areas impacting the company, providing day-to-day advice and guidance, and implementing changes as developments occur. A leader in her field who is conversant in a wide range of topics concerning equipment finance, Bonnie has contributed to ELFA and the equipment finance industry in a number of ways. She has served as an information resource for ELFA members regarding legal issues impacting the equipment finance industry. She has been a frequent speaker and participant in the ELFA Legal Forum and other industry events. In addition, she has contributed to ELFA’s Equipment Leasing & Finance magazine and the Equipment Leasing & Finance Foundation’s Journal of Equipment Lease Financing and led a team of ELFA volunteers in updating the Motor Vehicle State Survey on Financial Responsibility. Bonnie has served in a number of leadership roles within the association. She is a past member of the ELFA Legal Committee (2010–2012) and past Chair/Co-Chair of the ELFA Motor Vehicle Subcommittee (2010–2016). She also gives back to the industry by serving on the Board of Trustees for the Equipment Leasing & Financing Foundation (2015–present). In 2020, she was the Vice-Chair of the Foundation Board. She has served on the Foundation’s National Development Committee, Nominating Committee, and Editorial Review Board for the Journal of Equipment Lease Financing. As a respected industry thought leader, Bonnie has mentored many members of the industry legal community. She has invested time and leadership in serving as a resource to colleagues seeking guidance from her on a range of legal issues. Outside of ELFA, Bonnie has actively participated as an “observer” in the submissions to and meetings with the Uniform Commercial Code and Emerging Technologies Committee of the American Law Institute/Uniform Law Commission currently undertaking a review of the UCC to determine whether the Code or official comments should be revised or supplemented to reflect emerged and emerging technology. In addition to her legal responsibilities at Volvo Financial Services, Bonnie created and served as the initial Chair of the Community Involvement program in the U.S., which furthered her passion for giving back, and also created and served as the first Chair of the Engagement Committee in the U.S., helping to foster an even better workplace for all employees to enjoy. Bonnie holds a J.D. from Chicago-Kent College of Law and a Bachelor of Arts degree in journalism from the University of Wisconsin. About the Award The Edward A. Groobert Award for Legal Excellence is named for ELFA’s long-time Secretary and General Counsel Edward A. Groobert, who was active in the legal affairs of the association from the mid-1960s until his retirement in 2010.
EP 170: Insights into ESOP
In this episode, I was joined by Nathan Perkins of CSG Partners who focuses on ESOP. This is the latest in our partnership with Material Handling Wholesaler for the May 2021 issue. Nathan wrote the cover story entitled “Dealers at a Crossroads – Choosing the Right M&A Transaction” and we discuss how material handling dealers did throughout the pandemic and how they are now dealing with coming out of the pandemic. He also explains what an ESOP is and why this could be a good choice for a company. Key Takeaways Nathan and CSG Partners focus specifically on ESOP transactions and also work with a lot of material handling companies to help navigate this type of deal. ESOP stands for Employee Stock Ownership Plan which means that the employees take ownership in the company through the owner issuing stock. The owner can sell all or partial amounts of the stock and it is a way for them to get liquidity out of the company but still preserve the company as they know it. With the pandemic occurring over the last year, Nathan discusses how material handling dealers have done throughout the pandemic and they have fair pretty well according to him. Additionally, some have seen increases in business due to the increase in work throughout the warehousing and logistics space. Now as we come out of the pandemic these dealers are holding strong as well which is good news for the industry. We also discuss the driving factor behind the interest in mergers and acquisitions lately. Initially, my thought was due to the pandemic but Nathan explains that there is high interest right now so owners are trying to take advantage of that while there is a window of opportunity. Additionally, we discuss how many owners are getting to the age of retirement and also how there is a need for younger individuals to become interested in the space. With the supply chain coming to the forefront during the pandemic hopefully, we can get more interest from younger professionals in the supply chain space. Listen to the episode below and leave a comment if you have experience with an ESOP. The New Warehouse Podcast EP 170: Insights into ESOP
March 2021 Logistics Manager’s Index Report®
LMI® at 72.2 Growth is INCREASING AT AN INCREASING RATE for Inventory Costs, Warehousing Utilization, Warehousing Prices, Transportation Prices Growth is INCREASING AT A DECREASING RATE for Inventory Levels and Transportation Utilization Warehousing Capacity and Transportation Capacity are CONTRACTING A recent Wall Street Journal article, citing idled factories, shipping backlogs, and a lack of raw materials ran with the headline: “Everywhere You Look, the Global Supply Chain Is a Mess”[1]. The March 2021 reading of the LMI might support that conclusion, as we observe high prices, including record-high Warehousing Prices, tight capacity, and an overall LMI of 72.2, up (+0.8) which is the third-highest reading in the history of the index. This overall score is up significantly from March 2020’s reading of 58.9, and well above the all-time average of 62.9. There are a number of reasons for this growth, both internationally and domestically. The major logistics disruption, and story, over the last month, has of course been the 6-day blockage of the Suez Canal. The ramifications of the Ever Given blocking the Suez canal will continue to unfold over the next few months as carriers scramble to make up for lost time and shippers deal with delays. This is projected to cause major congestion at European ports, delaying the loading and unloading of ships as they come into port[2]. One method to do this will be to use “blank sailings” as empty containers head back to Asia so they can be refilled quickly[3]. Doing so will save time, but will also hurt European exporters. Something similar has been happening with American exports to Asia, as carriers are hurrying back to Asia and skipping a stop at Oakland to fill up with relatively low-margin goods like U.S. agricultural products[4]. The disruption in the Suez only exacerbates the continued slowness in west coast U.S. ports, where container volumes moving through the port of Los Angeles continue to increase, with an expected 130,000 and 150,000 TEU’s expected in the first two weeks of April[5]. The continued congestion in California may be a factor in Maersk to adding new routes connecting Asia and the east coast of the U.S.[6]. The result of all of this is that container rates are up 195% year over year for U.S./Asia routes and up 418% for some Asia/Europe routes[7]. The transportation capacity issues are not only limited to sea freight. According to FreightWaves, tender rejection rates have been over 25% since February 18th. This has led to increased spot-market rates and dwindling compliance[8]. Class 8 truck orders are at record highs, with just over 40,000 units ordered in March. Unfortunately, the backlog of ordered yet unproduced trucks is likely to remain high due in part to the shortage in semiconductors[9]. Ironically, the lack of capacity in the logistics market is hurting semiconductor production, which in turn is hurting the ability to bring new capacity into the logistics market, creating a negative feedback look that, in the short term, will be tough to break. On top of all of this, the U.S. economy is widely expected to boom over the next year. Millions of Americans are being vaccinated every day, and many have received stimulus checks over the last month. This could create a “two-speed recovery” in which more advanced economies come back relatively quickly, while third-world nations are restored at a much slower rate (due to lack of vaccine availability, and the movement of capital outflows to places where there is a vaccine), leading to uneven logistics demand. This is expected to put even further strain on supply chains as the burgeoning – some would even say pent-up – U.S. consumer demand is unleashed throughout the year[10]. Evidence of the U.S. waking from its recent economic malaise is observed in the 916,00 jobs in March. This growth is likely to continue as the labor market is still down by 8.4 million jobs from February 2020[11] and there is still a long way to go towards full recovery. The combination of increasing demand, and increasingly restricted supply will likely continue to be an issue going forward, as respondents are not optimistic about rapid increases in available capacity. Researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP) issued this report today. Results Overview The LMI score is a combination of eight unique components that make up the logistics industry, including inventory levels and costs, warehousing capacity, utilization, and prices, and transportation capacity, utilization, and prices. The LMI is calculated using a diffusion index, in which any reading above 50 percent indicates that logistics is expanding; a reading below 50 percent is indicative of a shrinking logistics industry. The latest results of the LMI summarize the responses of supply chain professionals collected in March 2021. As we have seen for most of the last year, March’s LMI displays continued, expansion in the logistics industry. Overall, the LMI is up (+0.8) from February’s reading of 71.4. March’s score is the third-highest in the history of the index. This high score is largely fueled by increasing costs and tightening capacities across the board. Warehouse Prices are up (+2.5) to 81.5, the highest level they have reached in the history of the index. This is notable as, of the price metrics we measure, Warehousing Prices have been the most steady and least prone to high-high’s and low-low’s. This is at least partially due to the fact that many warehouse contracts are multiyear agreements, and do not shift as dynamically as inventory or transportation costs. This high reading indicates two things: 1) Warehouse capacity has been steadily constrained for most of the last year, and the lack of supply is catching up to pricing; 2) Because of increased demand for last-mile delivery and similar services, firms are continually seeking more warehouse space and may be forced to pursue space at higher, spot-market prices. Warehousing Capacity continues to contract, although at a slightly slower (+0.9)
The CX
The primary task in the distribution business is to care for the customer and meet their needs. This is an indisputable fact. A wise man once told me that “NOTHING happens until something is SOLD”. Selling, however, used to be a much simpler process. In days past, the customer purchased equipment. It was our job to demonstrate to the customer that our brand, its capabilities, and our support team were the best fit for their needs. If we could prove that…. we usually got the order. Things are not so simple anymore. Our transactions with clients are no longer so one-dimensional. Where in the past the customer was looking to simply purchase equipment, both the customer’s needs and our offerings have now evolved. It used to be that we had customer “presentation opportunities”. This was our singular opportunity to create our best “pitch” and gain an advantage. Over the years, our customers tired of the “pitch”. They no longer want sales presentations. In fact, they no longer want to purchase equipment. This started the industrial movement away from self-sufficiency, and toward core-competency. An example: If my customer bakes cookies for a living, they naturally want to devote all of their time, energy, creativity, and attention toward baking cookies. Everything else involved (packaging, storing, and shipping the product) is NOT BAKING. These may be necessary functions, but they are not the core competency. Customers discovered that there are other organizations that have a core competency that involves these functions….so, “let’s partner with them to do that…so we can bake cookies”. This is where the 3PL business was born. Manufacturers wanted every square inch of their plant floor dedicated to manufacturing. That desire to focus on core competency gave rise to an entire industry. Even the 3PL business has a point of focus, and (surprise) it’s not about forklifts. Their core competency is getting the products delivered to their final destination as cost-effectively as possible. They want to invest their time, energy, creativity, and attention to material flow, logistics, and transportation. Once again, they want SOMEONE ELSE to care for the equipment fleet. The evolution in our customer base toward core-competency has shifted our primary encounter with customers away from “selling equipment” and toward “building advisory relationships”. In order for the dealership to secure repeat customers today, they have to do more than represent a good OEM, have a sales story to tell, and train their techs. They have to expand their discovery methods to truly craft customer solutions that are SPECIFIC to the objectives of each individual customer. They have to design relevant and accurate fleet reporting, then, schedule regular meetings where real-time data can lead to meaningful fleet decisions. Relationship selling requires constant visitation, ongoing discovery, and a focus on continuous improvement. No more pitch-and-close. No more one-and-done. We are no longer hired to provide equipment, and bill repairs by the hour. This is a much deeper offering, that will require us to satisfy a new set of expectations. The new standards will include: Optimized solutions Accurate operational reporting Specific actionable advice Ability to adapt to real-time change Ongoing communication Trackable cost reduction This means consultative partnering can’t be reserved in the purview of the sales department. As I am fond of saying…” the customer couldn’t care less about our departments”. He wants our solutions to be seamless, efficient, almost invisible, yet so valuable that the fleet nearly “pays for itself”. Every customer-facing department and employee has to understand what is at stake, and how the expectations have changed. The new B2B buzzword today is the “Customer Experience”. You may have seen the new acronyms float through your Linked-In feed. The “CX” (customer experience). The “ICX” (interactive customer experience). What is the CX? The CX is simply a model for customer interaction that not only engages customers with products but also establishes an emotional connection with them. It uses a hierarchy of connections that starts with providing data, moves into actively resolving primary needs, then continuously resolving ongoing needs in a way that engenders customer confidence on a long-term basis. The CX informs customer interaction at every level, and every customer-facing employee is trained to support the objectives of the CX. Is building a CX platform really necessary in our business? The short answer is YES. The reason is that our customer’s needs have so drastically changed, that we need a way to orient our resources and ensure that our practices actually support the new expectations. Some organizations have an entire team, including senior executives, that actively and continuously manage the CX. I’m not talking about computer companies or clothing stores. I’m talking about forklift dealerships. One notable example was created by Associated Integrated Supply Chain Solutions, out of Chicago. Shari Altergott served as their VP of Customer Experience and crafted a CX solution that resonated so well, that she started her own firm to help other organizations replicate CX success. Her company – The CX Edge, now assists dealers (and others) with focused customer interactions that are consistent with the goals of their CX objectives. When asked about the Material Handling Industry’s adoption of CX initiatives Shari had this to say: “While the Customer Experience is nothing new to this industry, in fact, many MH companies have grown their business through deeply personal relationships with clients. However, some have been slow to embrace how buyers and these relationships have changed over the last 20 years. We need to begin to look at the Customer Experience as a measurable strategy with goals and investments instead of an ideology.” Many of you already have an active CX. Many of you do not. Like it or not…this is the new business model. Expanded discovery, customized solutions, and the investment of time and attention to ongoing customer requirements maybe feel awkward and unsettling. Each department will need to adopt new processes and re-think their customer contact practices. Next month, I will continue this series and suggest measures that each department can take,
Dealers at a Crossroads – Choosing the Right M&A Transaction
As we enter the later stages of the Coronavirus pandemic, equipment companies in material handling and related industries are seeing the light at the end of the tunnel. Some businesses have even flourished in the last few quarters. Buoyed by changing trends in consumer consumption, purchase behavior, and decentralized commerce – and further bolstered by the broader reopening of the country – the outlook for dealers is strong. Typically, after an adverse economic event, there is significant pent-up demand for business liquidity events. Our current moment is no exception. M&A activity is once again on the rise, and established owner-operators are asking themselves tough questions. “Do I have another market cycle in me?” “Is now the time to sell?” “What would life be like without my business?” This uncertainly doesn’t end once an owner opts to pursue a liquidity event. Instead, a whole new set of questions may arise. That’s because a sale process isn’t binary. Sellers have transaction options. Partial sales are possible, and even complete sales have differing sets of pros and cons, depending on the buyer. For the purposes of this article, we’ll explore four sale options: to a competitor, to a financial buyer such as private equity, to a manufacturer, and to an employee stock ownership plan (ESOP). Option 1 – Sale to Manufacturer The primary manufacturer will often have a right of first refusal or a contract with the dealer that complicates a sale to any other buyer. Pros Cons A transaction “on rails” Reduce due diligence and closing process Sale proceeds are fully taxable May trigger depreciation recapture Often a lower valuation than other transaction options Seller gives up all future participation in the growth of the business Option 2 – Sale to a Competitor When most owners think about a sale, this is the option that first comes to mind. A larger player or deep-pocketed upstart who wants to take over your customers and/or territory will offer to buy your dealership. Pros Cons Widely understood process The buyer understands your market’s dynamics That familiarity may facilitate a smooth transition for your customers and operations Sale proceeds are fully taxable May trigger depreciation recapture Employees, including long-tenured staff and top talent, won’t be retained For example, a buyer won’t need 2 CFOs Those employees who are let go will generally be left with hard feelings and little to show for their efforts Option 3 – Sale to Private Equity Most PE deals are a type of leveraged buyout. To complete an acquisition, a private equity firm will lever-up a company’s balance sheet with private debt. Once in charge, the PE firm may seek to professionalize operations and drive future efficiencies. Pros Cons Selling shareholders may receive a substantial portion of the purchase price upfront, potentially at a valuation premium PE buyers are often focused on growing and scaling a business, rather than completely absorbing it Structural and operational changes may support add-on acquisitions Sale proceeds are fully taxable May trigger depreciation recapture PE firms often have the final say in operational and M&A decisions Seller may be required to reinvest some of their sale proceeds in the new business structure Risk of using excessive leverage, amortized with after-tax dollars Option 4 – Sale to an ESOP Similar to a management buyout, a company finances the purchase of an owner’s stock. But in this instance, the buyer is an employee trust, rather than a management team. Pros Cons Sellers can defer or eliminate capital gains taxes on sale proceeds and maintain upside The company receives tax deductions equivalent to the sale value and can become a tax-free entity as a 100% S Corp ESOP Does not trigger a depreciation recapture event The Board of directors continues to oversee operations Employee trust cannot pay more than fair market value A highly structured deal process Regulatory oversight by the Department of Labor and Internal Revenue Service Outside lenders can often provide non-resource financing, but this may only cover a portion of the transaction (seller notes fund the remainder) There isn’t necessarily a right or wrong option for dealership owners who decide to move ahead with a sale. But there are “best fits” relative to a seller’s needs and goals. A well-reasoned decision can mean the difference between a positive transaction and a seller’s remorse. So, let’s review these options based on an owner’s priorities. Seeking a Complete Exit Owners that want to cash out and not look back should give serious consideration to a manufacturer or competitor sale. Both options will likely represent the cleanest of breaks – free of continuing management duties and most other ongoing entanglements. A sale to a manufacturer sometimes represents the express lane for some owners and the only option for other dealerships. If ease, time-to-close, and transactional simplicity are paramount – even at the potential expense of a decreased valuation – this may be a desirable option. Of course, both transactions are subject to capital gains taxes, as well as depreciation recapture, so a premium valuation can take on outsized importance. With that in mind, a strategic sale to a competitor may yield greater returns. Looking to Gradually Step Back If you are interested in paring back your day-to-day involvement while diversifying your personal portfolio, a private equity or ESOP sale may be right for you. Both can provide a partial liquidity event with potential upside. Ongoing “skin in the game” takes the form of rolled equity in a PE sale and retained stock and/or stock warrants in an employee stock ownership plan transaction. Dealerships seeking an infusion of outside talent could be well-served by a private equity buyer. These firms often specialize in industry-specific transactions and provide operational know-how and human capital to scale their portfolio companies. The common trade-off is a loss of independence. While selling shareholders may play a role in the restructured entity, day-to-day control is generally assumed by the PE firm. If a dealership already has the bench strength to facilitate a gradual leadership
Transitory Planning
We have been hearing the word “TRANSITORY” coming out of DC a lot lately. Transitory this and Transitory that to the point where I had to look it up to make sure what DC was inferring or talking about. TRANSITORY– Not permanent. Brief duration. Temporary. Not persistent. Interesting since DC uses the word TRANSITORY when discussing inflation, the value of the dollar, interest rates, unemployment numbers, and so on in response to Fed numbers which seem to indicate inflation, the value of the dollar, material costs, fuel costs, and interest rates are starting to head in the wrong direction. From what I have been reading that seems to be the case and after adding in Stimulus dollars and the Infrastructure dollars it kind of makes sense that we will have a lot of dollars trying to buy goods or invest in the market. Costs and interest rate increases seem to be real with the value of the dollar becoming more volatile than anticipated. You feel it every day. Gasoline prices, material costs to build and service your product lines, a slowdown in purchase delivery’s, a lack of chips, wage increases, projected tax increases including a “driving” tax (to pay for infrastructure bill) all have been increasing and show no signs of backing off even though DC says they are transitory and scheduled to reverse shortly. So, industry leaders have two choices to consider. Believe these “transitory” increases will soon return to normal with zero interest rates, 2% inflation, and reductions in your current costs of doing business. Or believe these cost and tax increases are here to stay to the point where planning for them to stay is required. I believe the latter course of action is the one to take even if you believe these financial metrics will reverse the course and not require any action to protect your balance sheet and income statement. But better to be prepared than find yourself behind the eight-ball a year from not unable to pay your bills or meet bank covenants. What makes this planning exciting are price changes dramatically moving up at unprecedented rates, making it almost impossible to bid jobs unless they have a Cost-Plus adjustment to capture price increases incurred to protect your margins. With this type of activity taking place annual budgets may be a think of the past for a while. You may be better off using 13-week budgets and cash flows to capture what is taking place currently. Then slowly move back to a more formal budget process once your cost structure and activity return to “normal”. Both balance sheets and income statements tend to deteriorate during times like these. Not only do we incur unplanned cost increases, but also delays in finishing a job, or delays in delivering new and used units. And let us not forget that your rental costs will increase as well. In short, costs are jumping around and mostly increasing while at the same time billing gets delayed, both of which causing reduced profits and cash flow. Bottom line: less cash in the bank and higher inventory cost levels requiring additional financing and interest costs. Let us recap the impact on your Balance Sheet. Cash- down A/R- Down because of delayed billing and up from price increases Inventories- Higher, which may cause a problem once prices settle down Rental Fleet- Costs higher Fixed Assets- Cost increases with a higher cost to operate A/P- higher Accrued expense- higher Notes payable-higher. Equity- most likely takes a hit. How about the income statement? Sales down due to delays. Up from price increases Higher Cost of Sales. Higher cost of inventory Higher labor costs due to extended time to complete job Travel costs higher- increased fuel costs Higher interest expense- higher rates and additional inventory to finance The actual cost to service rental units may be higher than the contract amount Higher-income taxes being discussed Bottom line- most likely takes a hit And even if cost transitions back to pre-pandemic levels dealers may wind up with inventory costs higher than normal on the books that get costed out at higher than anticipated costs which reduce margins. Needless to say, using annual budgets does not work under these circumstances. Shorter budget periods a must. In addition, cost and inventory controls are more important than ever because you do not want unit or parts costs on your books that destroy your normal expected margin rates. Transitory planning for short periods necessary for the balance of 21 and probably 22. Transitory revenue planning required to offset volatile cost activity. Hope you had a chance to read Part 1 of Job Shock. Part 2 now available.
Are you a sales leader or sales chaser?
I grew up in Haddonfield, New Jersey. We lived at the corner of the busiest intersection in town. I was 15 years old when we got a puppy named “Thing-a-ma-jig.” The cutest, friendliest mutt-puppy you ever saw. One morning, about a week later, I opened the front door to get the paper — and the puppy got loose. She started running as fast as she could — right for the traffic. I started chasing her — hopelessly for five blocks, across busy streets — my little dog was gone — I was panicked (and out of breath). I decided to run back home, and ask my dad to use the car and find the dog. I ran straight to my parent’s bedroom. “Dad — dad,” I panted, “The — dog’s — runaway — car — chase — it!” “OK son,” he said,” “Let’s jump in the car and find your puppy.” I turned to run out the door – took one step, and tripped over the dog. You see, as soon as I started to run the other way, the dog chased me! Chasing your prospects too hard? Trying to push too hard for the sale? Follow up with a thinly disguised: “Is the money ready? Can I come over and get the money?” Do you figure that the best way is to be assertive and tell him why your company and product (or service) are the greatest? Right? — Wrong, sales breath! Try the opposite approach. Try running the other way by being attractive through your value. Create the law of attraction, and — let the prospect chase you. It’s the best sales and follow-up technique you’ve ever experienced. And the easiest way to sell: let them buy. EARLY WARNING SIGNAL: No returned phone call. If prospects are not returning your call — whose fault is that? You’re chasing too hard. They’re running away. You couldn’t get their interest — you couldn’t get them (they aren’t interested enough) to chase you. Other tell-tale symptoms that the chase is going the wrong way: You are still cold calling (or direct emailing) to get prospects. You’re uncomfortable about calling. You are unprepared, or you have not established the needs of the prospect and are unsure of their status, or you don’t have much rapport with the prospect or some of each. You are having trouble making appointments Prospects just won’t decide and you keep hounding them. You’ve followed up a few times, and now you’re searching for a reason to call them — but you can’t think of one. The prospect is giving you a bunch of lame excuses. And worse, you are accepting them. If chasing people too hard makes them run away, why are you continuing to do it? The way I got my puppy-dog to come home was — I led the dog home. You can either lead the field or be in the field (some people are in the left-field). Your challenge is to lead your prospects so they will follow you — and turn into customers. Here’s the simple solution: (NOTE: I didn’t say easy, I said simple. There are no easy solutions.) Create a better market position for yourself. Are your prospects and customers reading about you – or getting the information they can use written by you — in their social media accounts? Are they gaining helpful information on your website? Have you recently spoken at their annual meeting? Or are you thinking “brochure,” “appointment,” and “product demo” or “corporate video?” Wrong thoughts. Those are competitive thoughts and lead to a dissertation by you and your competition as to who is better – and always lead to a battle over price. A battle that everyone who fights in it loses. To create the position, you seek: Getting qualified people to call you – you’d better get beyond the typical marketing materials. ASK YOURSELF: Where are people seeing you or talking about you? TELL YOURSELF: It takes time to create the position. REWARD YOURSELF: But once you do, people call you to buy, instead of you calling them to sell. The secret formula? The magic potion? Real simple… whatever you do with your outreach, always have a prime objective at your core. Here is the one that has worked for me: PRIME OBJECTIVE: Put yourself in front of people that can say “yes” to you and deliver value first. Jeffrey Gitomer is the author of twelve best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His real-world ideas and content are also available as online courses at www.GitomerLearningAcademy.com. For information about training and seminars visit www.Gitomer.com or email Jeffrey at salesman@gitomer.com or call him at 704 333-1112.
Welcome to ProMat DX
In these unprecedented times, supply chain solutions are more critical to business success than they have ever been. To answer this call, MHI created the ProMat Digital Experience (ProMatDX), a new digital event experience designed to power up manufacturing and supply chain professionals with critical access to the latest solutions they need now to improve resiliency and agility of their operations. ProMatDX combines the power of the connections, solution-sourcing, and education that only ProMat can deliver with the latest digital event technology in a five-day event that will be the most important week of 2021 for the manufacturing and supply chain industry—April 12-16. Attending ProMatDX is your unrivaled opportunity in 2021 to find solutions, get reliable information, solid advice, and connect with your peers and the industry’s leading solution providers. The manufacturing and supply chain infrastructure investments you make as a result of your attendance at ProMatDX will build resiliency into your operations and differentiate your company for many years to come. ProMatDX is where the brightest minds in manufacturing and supply chain gather to discuss the trends of today and the challenges of tomorrow. They come to ProMat to power up their supply chain with the trends and innovations that will take their supply chain to the next level of success. At ProMatDX you will find the largest and broadest array of manufacturing and supply chain solutions on a state-of-the-art digital event platform, including: Sponsor Showcases and Product Demonstrations: ProMatDX will feature sponsor showcases from leading material handling, logistics, and supply chain solution providers from the United States and around the world. By attending, you will see new ideas and technologies in action during product demos featuring live Q&A. Digital Seminars: ProMatDX will offer over 100 seminars on a variety of manufacturing and supply chain topics including. All sessions will feature live chat and interactive Q&A. AI Solution-Provider Matchmaking and Live Video Meetings: ProMatDX attendees can connect with solutions tailored to your specific needs with AI-matchmaking tailored to your specific needs. You can also request live video meetings to take a deeper dive with solution providers of your choice. April 12 Keynote Panel: Transformation in Action: Introducing The 2021 MHI Innovation Award Winners Join MHI CEO John Paxton as he introduces the winners of the 2021 MHI Innovation Awards for best new innovation, best IT innovation, and best innovation of an existing product. During this keynote, you will learn about these innovative solutions and how they can power up and innovate your supply chain. April 12 MHI Young Professionals Networking Session This session will focus on those new to our industry with interactive networking opportunities. April 13 Keynote: Beyond COVID-19: Building Supply Chain Resilience is the Key to Recovery and Preparing for Future Disruption Join American Logistics Aid Network’s Executive Director Kathy Fulton as she and a panel of supply chain and disaster response thought leaders explore lessons learned from the pandemic and how building long-term resiliency into the supply chain and logistics operations will be key to adapting and recovering when future disruption or disaster strikes. April 14 Keynote Panel: 2021 MHI Annual Industry Report Preview Innovation Driven Resilience: How technology helps supply chains respond, recover, and thrive even amid disruption This is your opportunity to be the first to have access to this new report on the supply chain trends and technologies that are transforming supply chains. Thomas Boykin of Deloitte will join MHI CEO John Paxton in presenting the report findings. They will be joined by a panel of manufacturing and supply chain thought leaders to discuss the real-world significance of the report findings. Moderators: John Paxton, CEO, MHI and Thomas Boykin, Supply Chain Specialist Leader, Deloitte Panelists: Randy V. Bradley, Assistant Professor of Information Systems and Supply Chain Management, Haslam College of Business, The University of Tennessee Annette Danek-Akey, Executive Vice President, Supply Chain, Penguin Random House April 15 Keynote Panel: Women in Supply Chain: Delivering Proven Success Strategies During this keynote, you’ll learn how strong supply chains are built upon resiliency. A panel of women supply chain leaders will share their career experiences and how they successfully implemented, measured, and showcased operational success and sometimes challenged the status quo. Get inspired, come away with techniques and ideas to take into action in your operations to develop the supply chain resiliency necessary in today’s world. Moderator: Sheila Benny, President – Optricity Corporation Panelists: Maike Sievers, Vice President Logistics/Supply Chain at Hibbett Sports Megan Smith, CEO, Symbia Logistics Erin Donnelly, Director Supply Chain Development at The Home Depot Chaneta Sullivan, Esq, Director, Safety, Quality & Compliance, Chick-fil-A Supply April 15 Women’s Networking RoundtablesThese sessions will focus on discussion of topics regarding women in supply chain in an interactive, roundtable-style environment. ProMatDX will also feature Daily Recap sessions with news from the ProMatDX show at the end of each day. ProMatDX will offer a Sneak Peek Week from April 5-9 where attendees can go to promatshow.com to plan their ProMat experience by adding sessions and product demos to their personal calendars, connecting with sponsors, and setting up video meetings with selected solution providers. As the industry powers up for the next level of success, we hope you will make plans today to attend ProMatDX. We look forward to seeing you April 12-16! Visit promatshow.com to learn more and register for free admission to ProMatDX.
Why we need to redefine Employee Engagement
If you Google “Employee Engagement” and look for images representing it, you’ll find groups of people in business attire smiling, high-fiving, laughing, or conducting some other staged behavior. While it may look a bit comical, somewhere in the recesses of our minds, we want to replicate this feeling with our own staff. We associated happiness with engagement, and often try to fill the void with a series of initiatives and activities to ‘engage’ people, from free pizza and bagels, holding off-site meetings, and giving out swag, to public recognition of high performers. We’ve all done these things at one point or another. However, does this really build employee engagement? With the current pandemic, many of these old methods are not possible to implement, and many companies are struggling to figure out how to connect with employees working remotely. The problem is, we’re defining ‘engagement’ in the wrong way, and hence, applying the wrong solutions. Organizations need to re-examine what engagement means and deliver a more valuable and relevant experience. This means making 4 mindset shifts: Shift #1: Going from creating happiness to creating purpose Instead of focusing on trying to improve the superficial ‘happiness’ of employees, increase each employee’s understanding and sense of purpose. Does each and every employee fully understand how they add value to the organization? Do they know how they can create positive change to impact a common goal? Is that goal something they can be proud of and would want to share with their friends and family? Shift #2: Going from seeing roles to seeing skills While everyone in a company has a role and scope of responsibility, each person brings to the table an often untapped background of skills and knowledge which can positively impact the organization outside of their role. If an accountant or HR administrator also has a passion and talent for photography, can this skill be capitalized on and create value for the company, and provide an opportunity for them to contribute above and beyond their traditional role? Shift #3: Going from managing tactics to managing outcomes With the change to remote work, managers don’t have the luxury of checking in on employees as easily as before, or do they? One major insurance company is actually tracking the mouse movements of their remote employees – if their mouse isn’t moving on the screen consistently, they’ll receive a notification from their superior and have to explain why. Is the measure of success really about mouse movements, or how many claims get processed within a 12 hour period? Are you focusing on helping employees accomplish objectives or micromanaging implementation? Shift #4: Going from acknowledgment to trust While we want to recognize employees for going above and beyond in their roles, trust goes much farther. When an employee is trusted as a professional, and to do their job thoroughly and accurately, it builds confidence and reflects the organization’s faith they have in their staff. Do you exhibit trust with your employees, providing them the tools and latitude to execute their jobs independently, without excessive oversight? Employee engagement is often defined as the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work. To create this passion and commitment requires a genuine dedication to helping your employees succeed and grow, not just creating superficial, short-term happiness. About the Author Andrea Olson is a speaker, author, behavioral scientist, and customer-centricity expert. As the CEO of Pragmadik, she helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. Andrea is the author of The Customer Mission: Why it’s time to cut the $*&% and get back to the business of understanding customers and No Disruptions: The future for mid-market manufacturing. She is a 4-time ADDY® award winner and host of the popular Customer Mission podcast. Her thoughts have been continually featured in news sources such as Chief Executive Magazine, Entrepreneur Magazine, The Financial Brand, Industry Week, and more. Andrea is a sought-after keynote speaker at conferences and corporate events throughout the world. She is a visiting lecturer and Director of the Startup Business Incubator at the University of Iowa’s Tippie College of Business, a TEDx presenter, and TEDx speaker coach. She is also a mentor at the University of Iowa Venture School. More information is also available on www.pragmadik.com and www.andreabelkolson.com.
Registration now open for PTDA Virtual Canadian Conference
Registration is now open for the PTDA Virtual Canadian Conference, to be held June 9-10, 2021. This conference brings key decision-makers of the Canadian power transmission/motion control (PT/MC) industry together for business networking and education. The virtual conference includes informal and formal networking opportunities. The informal networking events are set in a virtual lounge that mimics a cocktail party environment. DM-IDEX (Distributor-Manufacturer Idea Exchange) provides distributor and manufacturer companies the opportunity to schedule one-on-one meetings in advance. Michael Bach, CEO of the Canadian Centre for Diversity and Inclusion will examine the business implications of diversity and inclusion. Andy Stumpf, a Naval veteran and former member of the U.S. elite SEAL Team 6, kicks off the second day by sharing how great leaders can elicit performance beyond what an individual considers possible. “We are excited to be back together this year to spend time focusing on the Canadian distribution market. It’s a great opportunity to discuss mutual business in one place as well as network with others in the industry,” said Ellie Girard, LUBRIPLATE® Lubricants Company. PTDA is a member-driven organization led by volunteers who work with their peers in the industry to develop relevant and timely content and programming. Using the expertise of several of the industry’s top executives, the programming for the Canadian Conference is specifically designed for Canadian distributors and manufacturers who sell power transmission/motion control products in Canada. With new sessions each year, the conference goal is to inform and educate with relevant and timely material.
ITA releases 2020 Forklift Sales figures with sales falling
Forklift sales in the North America market fell in 2020, according to figures just released by the Industrial Truck Association (ITA). The market decline can be partially attributed to the impact of COVID-19, with truck sales decreasing overall by 5.1% from the previous year. “The industrial truck industry had its third-best year on record in 2019, and the sales decrease in 2020 with COVID-19 was not unexpected,” says Jay Gusler, ITA chairman and executive vice president operations for Mitsubishi Logisnext Americas Group. “Our industry performed well throughout the pandemic, thanks to the essential nature of our products and the dedicated associates in our industry.” Total sales reached 230,134. Class 2 and Class 3 trucks saw a small increase from 2019 at 2.0% and 1.1% respectively. The remaining classes witnessed declines, with Class 5 seeing the largest decrease at 19.7%. Looking forward to 2021, the industry’s first-quarter results are healthy, according to the association. Meanwhile, ITA is looking forward to marking its 70th anniversary this year. Throughout the year, ITA will be posting facts and history from both the association and the forklift industry on social media. The 70th anniversary commemorates a major milestone for the industry. “ITA members have been instrumental in leading the way with enhanced safety, engineering practices, and market intelligence that has guided the industry well over the past seven decades and will continue that leadership role into the future,” says Brian Feehan, president of ITA.
JLG launches “Access Your World” experience
JLG Industries, Inc., an Oshkosh Corporation company and global manufacturer of mobile elevating work platforms (MEWPs) and telehandlers, announces the launch of “Access Your World,” an on-demand digital experience that showcases how JLG is Elevating Access in the areas of productivity, safety, and technology through virtual job sites. The virtual job sites feature JLG® products and services across multiple applications and stages of construction. “Customer interaction has changed in the wake of COVID-19, driving us to think differently about our approach to marketing,” says Jennifer Stiansen, director of marketing, JLG. “‘Access Your World’ is a unique, customer-focused virtual experience that allows visitors to explore and consume information about JLG products, services, and technologies, however and wherever they prefer.” In addition to featuring virtual job sites, the “Access Your World” event offers equipment owners and end-users the opportunity to view virtual walk-around videos, download product information and apps, view 3D hydraulic schematics, order parts, sign up for training, schedule meetings and ask questions of JLG experts, offering a healthy mix of virtual and “person-to-person” interaction. Experience participants can also access resources, such as JLG’s #DirectAccess, JLG Financial, JLG Gear, and the JLG dealer locator, from within the environment. This highly interactive and dynamic experience will evolve over the next six months to include additional job sites that feature a variety of products and content for users to explore. “This virtual environment was not designed to be a stop-and-go solution; rather, a start-and-grow experience that provides visitors the flexibility to attend, navigate and absorb content at any time, from anywhere, at their own pace,” concludes Stiansen. Register and enter JLG’s “Access Your World” experience today at JLG (virtualevents-hub.com).
ALAN opens nominations for 2021 Humanitarian Logistics Awards Awards honor extraordinary Pro Bono Supply Chain efforts
As members of the logistics industry continue to go above and beyond to support COVID-19 and other disaster relief efforts, the American Logistics Aid Network (ALAN) has opened nominations for its fifth annual Humanitarian Logistics Awards. “Many humanitarian efforts couldn’t happen – or happen as well –without the generosity of the supply chain community,” said ALAN Executive Director Kathy Fulton. “These awards were created to shine a light on that generosity and honor some of our industry’s most unsung heroes.” Nominations (including self-nominations) can be made via ALAN’s website (https://www.alanaid.org/humanitarian-awards-nomination/) between now and June 30. Honorees will be announced next fall. ALAN’s Humanitarian Logistics Awards are open to any logistics professional, academic, organization, or department. They are awarded in four key categories, each of which can have multiple honorees: Outstanding Contribution To Disaster Logistics Employee Engagement Research And Academic Contributions Lifetime Achievement “While we’re familiar with the many ALAN-related philanthropic activities that have taken place, there are many others that we won’t be aware of – and able to honor – unless people take the time to let us know about them,” Fulton added. “That’s why we’re encouraging everyone to submit a nomination. We genuinely appreciate hearing about the amazing work that’s being done and look forward to recognizing that work in September.” Established in 2017, ALAN’s Humanitarian Logistics Awards recognize companies and individuals who exemplify the best that the supply chain has to offer by assuring that aid and comfort are rapidly delivered to communities in crisis. Previous award recipients have included Everstream Analytics, Uber Freight, Surge Transportation, Bergen Logistics, Hub Group, Western Union Foundation, Gary LeBlanc, Leah Beaulac, Dr. Gyöngyi Kovács , Philip J. Palin, Disaster Relief by Amazon, Dr. Nezih Altay, and MIT’s Humanitarian Supply Chain Lab. For a full list of rules and nomination criteria go to https://www.alanaid.org/wp-content/uploads/2018/06/ALAN-Award-Nomination-Information-2021.
Rockford Systems reopens Machine Safeguarding Seminars to In-Person Learning
The company also expands popular online seminar program to a monthly schedule in response to growing demand Rockford Systems, LLC. has announced plans to reopen its in-person Machine Safeguarding Seminars following the suspension of live learning during the COVID-19 pandemic. The first two-and-half day live seminar is scheduled to restart April 21-23 with additional seminars set for July 21-23 and October 20-22, all held at the company’s training center in Rockford, Illinois. The decision to reopen the seminars to live participation is based upon the company’s robust COVID-19 protocols and the widespread rollout of the COVID-19 vaccination. Matt Brenner, Vice President and General Manager for Rockford Systems, LLC said, “Training is a critical step in the plant safety lifecycle. Understanding safety regulation and being more aware of machine hazards is critical for manufacturing employees. Rockford Systems safeguarding seminar is a great source of baseline machine safety information.” Rockford Systems Machine Safeguarding seminars instruct professionals on managing a company’s risk profile and avoiding business disruption. Highly experienced instructors teach attendees how to interpret the performance language of OSHA 29 CFR, ANSI B-11, and NFPA-79 standards as each relates to specific machine applications and production requirements. Attendees receive extensive course materials, a guard opening scale, a grinder gauge, and lunch for two days. “We are very excited to offer live machine safeguarding training with appropriate measures consistent to protect the health of all attendees,” said Roger Harrison, Director of Training for Rockford Systems, LLC. “Our live seminars combine classroom discussion with demonstrations of machines under power, so attendees will again be able to have hands-on experience with a variety of machinery safeguarding systems. As American industry reopens, Rockford Systems wants to be part of the recovery.” COVID-19 Protocols Class sizes are restricted to comply with both current Illinois gathering tier mitigation requirements and to allow for greater than 6-foot social distancing between participants. The instructor will follow best safety practices including either a mask or a face shield while training. Attendees are required to have a daily forehead-scanner temperature check, wear masks while not eating or drinking, and limit their physical presence in the building to the training areas. All surfaces and equipment are sanitized daily. Attendees are free to use our GermBlock™ shields which limit airborne droplets resulting from coughing, sneezing, or speaking from reaching a nearby person, therefore helping to mitigate possible COVID-19 infection. Online Seminar Program Expanded During the COVID-19 pandemic, Rockford Systems switched to an online interactive platform for its machine safeguarding seminars that has proven highly popular with EHS managers, loss-control engineers, machine operators, and other professionals who appreciate its convenience, cost savings, and flexibility. Rockford Systems announced plans to continue the online seminar program that has been expanded to a monthly schedule in 2021. Online and in-person criteria are identical and continuously updated to include the latest machine safety standards. Unlike with the all-day live learning program, the online segments are two hours long per day for five days and are accessible from any Internet-connected device. Associated costs of attending the live seminar, such as airfare, hotels, and lost employee productivity due to being off-site, are also eliminated.
Job Shock: Solving the Pandemic & 2030 Employment Meltdown Part III: The Kids & Workers Are Not “All Right”
Many students and workers cannot accept the new reality that they are undereducated for many jobs in this decade’s labor market, let alone future ones! KNAPP has created a robot for warehouses with the dexterity to recognize and sort random items with 99 percent accuracy. Once such robots are put into operation, humans would continue to work alongside them, but the catch is that these workers will need a whole set of additional skills. “If this happens 50 years from now,” stated Pieter Abbeel, an artificial intelligence professor at the University of California, Berkeley, “there is plenty of time for the educational system to catch up to the job market.” The trouble with his prediction is that the COVID-19 pandemic has sped up companies’ plans to further automate workplaces today! Throughout the course of the COVID-19 pandemic, small business owners have consistently reported that the quality of labor was an important business problem. In a February 2021 National Federation of Independent Business survey, 56 percent of the respondents were trying to hire and 91 percent of these employers reported few or no qualified applicants for their job openings. This situation is the result of outdated regional education-to-employment systems across the United States. They have largely become broken pipelines with an inadequate flow of people qualified to fill local jobs. Unfortunately, this skills-jobs gap has persisted throughout the last two decades. As a labor economist, Kevin Hollenbeck wrote in 2013, “I am reminded of the adage about the frog in the pot. If you put a frog into a pot of boiling water, it will jump out. But if you put a frog in a pot of water and then slowly boil it, the consequences will be dire for the frog. . . . We (workers, employers, policymakers, and politicians) like that frog, have not been alarmed enough by the signals of a widening skills-jobs gap . . . to jump to action, and now we face the dire consequences in the form of a “talent cliff.” The COVID-19 pandemic has made this talent cliff steeper. The switch to remote schooling has meant that many students may be behind as much as a full grade level. Jobs go unfilled due to the lack of qualified applicants while more workers remain unemployed for six months or more and the labor-force participation decreases. Clearly, the kids and workers are not “all right.” Denial or wishful thinking will not change this job shock reality. Knowledge Shock The 2017 film “Hidden Figures” focuses on the lives of three African-American women who NASA hired because of their advanced math attainments. Through making important contributions to NASA’s space mission, these women overcame race and gender discrimination, earned the respect of their co-workers, and secured career advancement. These three women are unsung heroes of the U.S. space race against the Soviet Union. What was a major reason for their success? With the long-term help of their parents, each of the women overcame formidable barriers to obtaining the educational preparation that developed their mathematical talents. Education is a shared responsibility between parents and schools. Education should begin at home. Habits of learning should be instilled there. Parents can help a child learn-how-to-learn by fostering each child’s personal talents and interests. Unfortunately, America’s popular culture does not esteem educators or link educational attainment to success in life. Parents are the primary motivators of their children. If parents do not believe that doing well in school is very important, neither will their children. Many parents also believe that their local school is providing good education to their children. Regretfully this is often not the case. Education levels have not kept pace with skill demands in workplaces. There is ample evidence that K-12 education in the United States is not providing many students with the educational foundations needed for their future development. Every two years nationwide achievement tests are given to students in grades 4, 8, and 12. The National Assessment of Educational Progress (NAEP) commonly called the “Nation’s Report Card” is conducted by the U.S. Department of Education. Recent results have been nothing short of alarming. Students are ranked at four levels: below basic, basic, proficient (at grade level), and advanced (above grade level). The Grade 4 test results in 2019 were: 65 percent read below grade level, 26 percent were at grade level, and 9 percent were above grade level. Fourth grade is a crucial point for reading attainment because in the first three grades students are taught how to read, but by the fourth grade, they should have attained a level of reading proficiency that enables them to learn how to learn. At grade 12 in 2019, 37 percent received NAEP reading scores of proficient or above. However, 30 percent were at the below basic level which was larger than in any previous assessment year. In math, only 24 percent of high school seniors were at the proficient or above levels. Yet paradoxically the U.S. high school graduation rate has been rising. How can this be explained? Grade-level standards are being downgraded or bypassed. For instance, failing students are enrolled in special “credit recovery programs” that allow them to move on to the next grade or graduate with no or minimal academic standards for a passing grade. Clearly, all high school degrees are not equal! The NAEP scores indicate that a large proportion of U.S. students are not equipped with the basic educational foundation needed for success in post-secondary programs. About 67 percent of high school graduates attend higher educational institutions. After six years only about one-third complete a degree, certificate, or apprenticeship. Many of these students take either the SAT or ACT exams that are designed to access their readiness for higher learning. Between 1967 and 2017 overall test scores on these exams have declined. In 2019 only 37 percent of ACT takers and 45 percent of SAT takers tested fully ready for post-secondary programs. Most higher-educational institutions are compelled to offer remedial education for entering students.
EP 163: Waste in the Supply Chain
On this episode, I was joined by a very special guest who is a Global Supply Chain Management student at my Alma Mater, Rider University, and who I have been mentoring for the past academic year through my APICS chapter’s mentorship program. His name is Steven Evan and I am happy to report that as of this writing he has landed himself a full-time job for when he graduates this May. I brought Steven to the podcast because he wrote a very interesting thesis entitled “Too Much or Not Enough: Finding the Balance Between Waste and Shortages in the Supply Chain” which I thought was a great discussion to have. We talk about the thesis, waste in the supply chain, and also his take on learning in the current environment. Key Takeaways I always find it very interesting to talk to students since they are the future of our industry and essentially the world. In the past year, it has been even more interesting hearing how they have been dealing with learning in the pandemic because it is a vast difference from anything I ever experienced in my educational career. Steven shares how they have been able to adapt very well to the virtual environment and being connected with him for a large portion of that time it has certainly seemed like the supply chain department has really focused on still making the program quite engaging. The one thing that Steven misses is the site tours which I couldn’t agree more with because those are just fun. One thing that Steven shares is how he got interested in the supply chain which was actually from his time working in the produce section of a grocery store. He began to wonder how do these products get here and what goes into making sure there is enough there which lead him to discover the supply chain. For his thesis, he took this a step further and began to think about what happens with the waste that is generated in these produce departments. He developed this idea and started to explore waste and shortage issues in the supply chain. The most remarkable takeaway for me is that 40% of food waste in North America is due to the supply chain. This is crazy and we need to do better in the supply chain world. Through the thesis, Steven explores this and where the waste is actually occurring. In his research, he found that 7% of this waste is occurring on the distribution side of things. Many times in the warehouse, especially for food, the amount of inventory is a huge factor in creating waste. In many cases, it is a race against time to get the product out and to consumers before it passes the sell-by date. Optimizing this and understanding your forecasts as much as possible is the best way to reduce this. Listen to the episode below and let us know how you are reducing waste in the comments. EP 163: Waste in the Supply Chain
Job Shock Part II: Solving the pandemic & 2030 employment meltdown. What changed?
Would You Use a Videotape in a Blu-ray Disc Player? The days of semi-skilled blue-collar factory jobs are fast disappearing. These jobs once provided a 19-year-old high school graduate or drop-out with the wages and benefits needed to support a family with a middle-class standard of living. Thinking that working in low-skill manufacturing or service occupations will propel you into the middle-class today is as sensible as buying a videotape for a Blu-ray disc player. The decline of many types of U.S. manufacturing jobs was a hot political issue in both the 2016 and 2020 Presidential elections. The economic consequences of the closing of large manufacturing plants, particularly those making automobiles and large household appliances, have been especially severe. Many of these factories were located in smaller cities in which they were the central economic engines of their communities since the 1950s. They provided large numbers of assembly-line workers with well-paying, lower-skill blue-collar jobs. The growing prominence of electric vehicles has made such auto plants obsolete. The new technologies used in these vehicles mean that robotics is a central feature of their assembly lines. Such assembly lines depend on higher-skill workers who control, maintain, and repair the automated equipment. Manufacturing, in general, is undergoing a similar transition with jobs that support automated equipment growing dramatically. The December 2020 survey of the National Association of Manufacturers illustrates the rapid escalation of skills demanded in manufacturing. Even in the midst of the COVID-19 pandemic, respondents reported the “inability to attract and retain talent” as their top business challenge. The Manufacturing Institute has projected that 2.4 million manufacturing jobs will likely be unfilled over the next decade due to skill deficits. The Fourth Industrial Revolution is wiping out many types of middle-skill jobs. The COVID-19 pandemic has more severely affected middle-skill and low-skill workers. More individuals see both their financial well-being and social status threatened. This has helped to fuel the growth of populist movements that are latching on to conspiracy theories or finding other scapegoats to blame for their current jobless or low-paying job situations. They are placing the blame on the wrong targets. They should be directing their anger at inadequate or outmoded training and education systems that do not provide the skills needed for the jobs that are currently in demand. Demographic Time Bomb The United States and the world are facing a structural labor-market race between advancing technology, on the one hand, and demographics and education on the other. In the United States alone 79 million baby-boomers are retiring between 2010 and 2030. The U.S. Census Bureau projects that one in five Americans will be 65 or older in 2030 and by 2025 the number of retirees will be enough to populate 27 Floridas. While the US population is projected to grow to over 355 million in 2030, an increase of about 6 percent, the working-age population 18 to 64 is only projected to increase by 2 percent. Similar demographic shifts are also occurring in other nations in Europe and Asia. Birth rates are falling significantly in Italy, Germany, China, Japan, and South Korea to name a few. In these nations as in the United States, the working-age population is supporting an ever-growing number of retirees. This demographic shift increases the importance of raising worker productivity. In most nations, the current pace of education reform and worker retraining will be too little, too late. For example, in China, about 70 percent of the labor force remains unskilled as its huge rural population is relegated to inferior schools where most students receive no more than a junior high education. (Rozelle, Invisible China) The central premise of this “Job Shock” White Paper is that radical improvements in education and training programs are needed to obtain a global labor force that meets the Fourth Industrial Revolution’s technological demands. American businesses have become over-reliant on importing foreign talent. However, as the world-wide war for talent heats up, it will be virtually impossible for the United States to use this strategy to compensate for our chronic domestic talent shortages. This situation is likely to become more acute between 2020 and 2030. Lessons from the Past This is not the first time the United States has struggled with job shock. Beginning in the 1890s the spread of electric power led to mass production methods in factories and population shift from farms to cities. Factory technologies required workers with basic reading and math skills. To meet these expanded educational needs, compulsory tax-supported education gradually spread across the nation. The launch of Sputnik in 1957 triggered the Space Race between the United States and the Soviet Union. This spurred the growth of the American aeronautic and defense industries with a consequent rise of jobs and careers in STEM (science, technology, engineering, and mathematics) areas. Encouraged by federal funding, many initiatives sought to improve and expand STEM education and interest more students in pursuing careers in these areas. The 1970s saw the introduction of personal computers (PCs) in homes and businesses across the United States further expanding technical employment growth. The good news is that there is not a fixed number of jobs in the U.S. economy. These past disruptive job transitions provide evidence that personal attitudes toward jobs do change and that the American labor market is very elastic. The new job requirements of the 1970s sparked a nationwide impetus for improving reading, math, and science instruction in elementary and secondary schools. There also was tremendous growth in educational options at the college level, and U.S. businesses developed in-house training and education programs for new and incumbent workers. Today’s Job Demands The Space Race and computer technology revolution produced islands of educational excellence but did not lead to the general development and expansion of education programs across the United States. The current education-to-employment system lags far behind the rate of change in the skill demands of the U.S. labor economy. Two-thirds of occupations now require post-secondary education, while a high school education or less suffices for
PTDA Foundation accepting nominations for Inaugural Robert K. Callahan Future Leaders Award
The PTDA Foundation is now accepting nominations for the inaugural Robert (Bob) K. Callahan Future Leaders Award. This award will recognize a young leader who exhibits a true passion for and desire to grow within the power transmission/motion control industry. Bob Callahan was a 25+ year veteran of the PTDA Foundation Board of Trustees. He was passionate about the PTDA Foundation’s work in enabling PT/MC companies to recruit new employees and attain a sufficient, vibrant workforce. “Bob was always there to provide guidance and encouragement. He truly modeled the way and embraced tenacity, compassion, grace, and selflessness,” said Barb Ross, Garlock Sealing Technologies and award creation task force member. In recognition of Bob’s commitment to and passion for the advancement of new talent within the industry, the Robert K. Callahan Future Leaders Award was established. “The Robert K. Callahan Future Leaders Award is the essence of what Bob cared about the most−ensuring the industry supported the next generation of leaders and their ability to make a positive contribution to the power transmission industry,” said Tribby Warfield, award creation task force member. Nominations are now being accepted through June 11, 2021, and will be judged by the following criteria: Nominee must be 40 years old or younger and have been in the industry for at least five years Nominee must be employed by a PTDA member organization at the time of nomination and presentation Nominee must exemplify leadership and integrity in all business relationships Download the criteria and nomination form at ptda.org/CallahanAward. The Award will be presented at the PTDA Industry Summit in October.
The Lowdown on the Letdown: Why some people drop the ball and what to do about It
He didn’t get the shipments out – again! Makes me crazy. That guy never follows through. She said I’d get a promotion, so where is it? I’ve been waiting for three years. All talk and no action, that phrase describes that group in a nutshell. They pay lip service to teamwork, but they never pull their weight. From time to time, everyone misses a deadline, forgets an obligation, or fails to live up to meet a commitment. We’re human, and it happens. For most of us, failure is followed by an immediate effort to right the situation Problem solved, right? Not so fast. “Most of us” excludes a special cohort: those who chronically disappoint and routinely fail to meet their obligations. They say one thing and do another, they agree to deadlines they have no intention of meeting, and they commit to deliverables that will never materialize. If we’re lucky, once we identify members of this tribe, we can put a healthy distance between ourselves and them. If not, there are some proven strategies we can use to retake control, push for greater accountability, and regain control of our sanity. Accountability Strategy One: Confirm a Shared Understanding Be sure you and the other person have a shared understanding of your expectations. Do the fellowshipping your packages understand what’s required? If so, how do you know? Did he say “yes” in a way he’d hoped you would figure actually meant “no?” Did he agree because you are in a position of authority, and he didn’t want to disappoint you at the moment? Did he know that you meant today and not just sometime soon? Before taking other action, it’s important to make sure you and the other person have a shared understanding. Accountability Strategy Two: Look for Roadblocks Once you are sure that you and the other person have a similar grasp of the requirements, look for roadblocks. Is the promotion you’ve looked for no longer available because of circumstances outside of the promiser’s control? Does the person boxing shipments have someone else demanding his time? If you discover it’s the latter, your frustration is focused on a symptom and not the root cause of the problem. Take the time to do a little digging. You’ve got to focus your effort on changing the underlying belief and make a case for your point of view. Accountability Strategy Three: Break Steps in Smaller Pieces Even with a shared understanding and no obvious roadblocks, sometimes people don’t follow through because they get overwhelmed. When this happens, it may make sense to break the task into smaller pieces. Bobby, how many packages do you think you can have ready by 1:00? Great, I’ll check in with you then to see where we are. It’s important that we meet our shipping deadlines because our customers count on us to live up to our promises. When we meet this afternoon, we can see where you are. How does that sound? Accountability Strategy Four: Make Use of Upfront Contracts If there are no roadblocks preventing the other person from following through and small steps aren’t solving the problem, it’s time to explore up-front-contract language. If you can get these shipments out by 3:00 today, I can mark your work as complete. If your team can meet the deadlines we’ve agreed to, we will have what we need to move the project to the engineering team. The pattern is simple, “if you/your team can, then I/we will.” If you can clean the odd-numbered rooms, I can take care of the evens. That should split the work fairly. Accountability Strategy Five: Add the Next Step If the upfront contract doesn’t yield results, it’s time to add an else component. If you can get these shipments out by 3:00 today, I can mark your work as complete. If I’m unable to do that, we can set up a meeting with Brian to let him know that we’re notifying customers that their packages will arrive late. If your team can meet the deadlines we’ve agreed to, we will have what we need to move the project to the engineering team. If we can’t move forward, we’ll have to escalate the schedule change to senior leadership, so they are aware of the schedule slip. Accountability Strategy Six: Consider Cutting Your Losses (If You Can) From time to time, you may encounter a customer, colleague, or someone else who fails to follow through no matter what you do. When that happens, you may decide to cut your losses. Matt, when we spoke about arriving by 9:00, I explained that if you could make that happen regularly, you could continue your employment. For the last two weeks, you’ve arrived after 9:00 more than half the time. For that reason, we’re going to let you go. Accountability Strategy Seven: Take Back Control What if you’re not in a position to fire someone or walk away from a relationship? In these situations, it’s important to realize you are making a choice. I’m not getting the promotion. I know this. I’m going to continue to work here because it’s close to my house, and the schedule is flexible. Jane is chronically late, and she’s the owner’s daughter. Although I’ve brought the issue to his attention, he’s chosen not to act. I need a job, and this is the one I have now. I choose to work around this instead of walking out the door and having nothing. And that’s the lowdown on the letdown. Few people enjoy disappointment or appreciate someone who chronically drops the ball. Sometimes better communication can fix the problem, sometimes upfront contracts paired with consequences can make things right, and if all else fails a little positive self-talk can help if no other solution does the trick. About the Author: Kate Zabriskie is the president of Business Training Works, Inc., a Maryland-based talent development firm. She and her team help businesses establish customer service strategies and train their people to live up