Chris Aiello Cheers to a New Year!
I hope that everyone reading this is coming off a great 2022 and is ready to come out of the gate firing on all cylinders in 2023. As I write this article, topics such as inflation, interest rates, economic outlook, supply chain, automation, technology, competition for talent, and electrification of the North American forklift fleet remain at the top of mind for many lift truck dealers. These topics and their impact on our industry could be a column each on its own. However, to kick off this New Year edition, I wanted to briefly touch on some of these topics.
Supply Chain
The hidden cost of variability in the supply chain was the topic of my column in the October edition. There I posed a few questions: What is your dealership doing to diversify your offerings? Are the various departments within your dealership working together to optimize purchases of inventory and products from your suppliers?
A few trends continue to prevail on the supply chain topic. Labor shortages and disruptions are still a factor throughout the supply chain. China is sticking to the zero-tolerance COVID-19 policy, which has the potential for disruptions when their ports shut down for COVID reasons. Ocean freight rates are trending down; however, some are stating that this trend could be due to the early shipment of Christmas retail goods. There is likely to be continued pressure on certain products, especially those with electronics as there have yet to be signs of improvement in chips or electronic components availability.
Variability in the supply chain will continue to be a thing in 2023 and your procurement teams will continue to have to determine which products and commodities it makes sense to apply just-in-time inventory practices to vs just in case. Businesses must continue to remain vigilant in anticipating supply chain disruptions and have alternative options ready in advance to avoid not only a negative impact on their revenue stream but also prevent negative customer experience.
Automation
It was great to see in-person trade shows thriving and back to pre-pandemic or higher attendance in 2022. I attended last year’s MODEX show in person and it was evident that automation was one of the top themes. Labor shortages continue to be a trend with our industry’s target customers such as warehouses, fulfillment centers, big box stores, etc. These warehousing companies are implementing automation, robotics, and artificial intelligence to not only attract and retain a younger generation but also to fill the voids of shortage of labor in warehousing facilities.
Many lift truck dealers in our industry have added systems and automation solutions to meet the needs of their customers over the past years, especially as they needed to have additional products to sell. Smart warehousing and automation will continue to advance in our industry and there will be plenty of opportunities to sell parts and service this type of equipment as well. The need for additional technicians on your service team will certainly play into the ability to provide aftermarket service on these systems.
Competition for Talent
The labor shortage and competition for talent, especially for your service technician workforce has been a hot topic for many years now and remains as such. As I mentioned in my previous paragraph, if you are looking to add the service opportunities that come with the boom in smart warehousing and automation, then you will either look to add additional service technicians or invest in training your existing technician force. As a growing number of service technicians are retiring or nearing retirement, dealers and independent service providers continue to face a shortage of technicians.
The competition for talent is certainly not limited to your service technician staff. The competition for parts professionals, sales staff, office personnel, and management will continue to be fierce. You will want to be sure to keep your finger on the pulse of the retaining, recruiting, and development of your workforce. Be mindful of what businesses are doing in not only this industry or adjacent industries; keep up with what businesses are doing across various types of industries.
Electrification
Many businesses now have dedicated departments and positions for Environmental, Social, and Governance. Some may be instituting corporate policies around environmental issues such as air pollution, greenhouse gas emissions, and compliance with government environmental regulations. For example, according to a recent article on the Rental Equipment Register website, “Sunbelt Rentals will be expanding its electric on-road fleet with an order of 700 Ford F-150 Lightning trucks. The purchase of the trucks will contribute to the goal Sunbelt Rentals set to reduce greenhouse gas (GHG) emission intensity by 35 percent by 2030.”
Just this past year, the California Air Resources Board, passed legislation that will require all new cars sold in the state by 2035 to be free of greenhouse gas emissions such as carbon dioxide. If you visit the California Air Resources Board website, you will read there they are trying to “accelerate the transition to zero-emission to meet the state’s air quality and greenhouse gas reduction goals. They are currently developing a measure that would drive the greater deployment of zero-emission forklifts within fleets throughout the state; one of several near-term actions intended to facilitate further zero-emission equipment penetration in the off-road sector. This measure is scheduled for Board consideration in 2023.”
If the trend in automotive does mirror itself into the off-road equipment sector such as the forklift industry, what will the impact be on your business and your market? Manufacturers and new equipment sales aside, the service of electric forklifts is different than the service of internal combustion or gas-powered forklifts. Everything from the diagnostics to the parts consumption are factors that will have an impact on your service departments. Electrification in the forklift industry electrified equipment and fleets, will be hot topics in 2023.
Technology
As I wrote in my November column, B2C customer experience and shift of buying behavior to the ease of online transactions is now an expectation of your customers and prospective customers in the B2B world. The same expectation will hold true for the younger generation of the workforce and those entering the workforce for the business systems they have to use at your business. Many dealers and manufacturers are already in the process or have recently upgraded their business systems to accommodate for future-proofing their operations. Considerations for upgrading your business system also include the ability to be compatible with complementary software or technology like mobile service technology solutions or CRM platforms.
As discussed in my November column, if you are looking to deploy an e-commerce site, will your site interface with your ERP business system? If you are operating on an older business system, this could potentially create limitations for those looking to interface their site with their system. Talk with your ERP provider; see what resources they have available to assist with integrating your business system with these types of solutions and a potential e-commerce platform if that is within your strategy.
The coming year will bring many opportunities; I hope you and your business are successful in all you do in the coming year. Cheers!
About the Author:
Chris Aiello is the Business Development Manager at TVH Parts Co. He has been in the equipment business for 16-plus years as a service manager, quality assurance manager, and business development manager. Chris now manages a national outside sales team selling replacement parts and accessories in various equipment markets such as material handling, equipment rental, and construction/earthmoving dealerships.
