By Hugh Patterson
The second in freelance writer Hugh Patterson’s series in which he discusses the state of the materials handling business with the leaders of New Zealand forklift companies.
 Darren Allen
“Reliability and a reputation for service built through 60 years are our significant strengths going into a tougher financial climate,” says the general manager of the Gough Group materials handling division, Darren Allen.
Newly in the driving seat at Gough, Darren has his focus firmly on service delivery and customer satisfaction. He excelled locally in operations management for 11 years with a Gough rival, and sees the move from area management to the general manager’s chair as an opportunity to refine leadership skills.
Darren admits to being highly competitive, alert to the actions of rivals in the industry, and intent on making sure that Gough performs around the clock. Since arriving in early March, he has reconstituted the long-established Hyster machinery seller – and its national sales and service force of 120 – for a campaign of expansion. With Hyster he has one of the world’s top lift truck brands. He refers to Worldwide Industrial Truck Association figures that show the brand ranks in the top six for overall sales in 2007, yet in New Zealand, Gough is not achieving similar heights.
Darren notes considerable growth in the local market between 2001 and 2007, and has figures to support this. Fork truck sales in 2001 were about 1050 units. In the years since, sales have either increased or held (2005) with around 2800 machines sold here last year, Darren says. While acknowledging that the volume of cash available for materials handling capital investment is likely to be a lot less over the next two years, he is confident that Gough can achieve larger share, especially in Auckland.
Darren saw as significant the arrival, the same week as he took over, of New Zealand’s most powerful container handler, the Hyster RS 46-41L CH, at Ports of Auckland. The giant machine has a two-stage telescoping boom that can pick full containers three deep and stack five high. It has a top lift of 46 tonnes at 1.87 metres.
“The goal,” this former British soldier says, “is growth achieved through good organisation, teamwork and reliable supply.” He and his team will identify solutions for the customer – “it’s a sense of being on the same wavelength as those guys” – and then deliver and support the machinery that will do the job.
“What I’ve been doing really is establishing the core values of the business,” Darren says. “I expect [everyone] to work hard, to set themselves personal goals within the business and to exceed them. I expect them to take ownership of their specific roles, and to work as a team.”
An inventory of available Hyster machines includes the 52 tonne capacity port container handlers through a comprehensive number of configurations for battery and IC machines to small warehouse aisle machinery and order pickers. “Every forklift has its own features and benefits,” Darren says. “Size, speed and strength are built into what your machine is … comfort is a given, and reliability and safety are paramount, but most important is the way that machine is backed up. It is the point of difference.”
Darren sees benefits in military experience because it suggests efficiency and the ability to perform in a team. “In this business, success comes with identifying the targets, following through and knowing how to support people. You’re either an expert at this or you’re not,” he says. “The essence is communication. That means letting people such as your key customers and staff know where you are in the market and keeping them up to date with developments.”
Darren’s ideal is to have “dynamic, focused industry experts” as his salesforce. He believes in a strong work life balance – he’s a family man, a father of sons, and an amateur golfer who plays on a very good handicap. In May he took out the prize for the longest drive at the inaugural Ports of Auckland charity golf tourney.
He is a boss who will pick up the tab for team building and customer relations. “It’s about making the time to run the business well,” he says.
 Tony Emtage
“The Chinese will overcome the faults in their forklifts and be making quality machines in five years,” predicts Centra Forklifts director Tony Emtage. The New Zealand dealer for Japanese-made Mitsubishi and Australian-made Sumi material handlers is also informed by 15 years as CEO of an international wholesale and distribution company manufacturing in China and Southeast Asia. It has made Tony a student of lift truck technology and cost control.
“You have to understand … [that] conservatively speaking there are more than 50 manufacturers of forklifts in China,” Tony says. “All believe that they make a world-class product.” He says that most days bring him one or more emails from a forklift manufacturer in China, usually south of Shanghai, wanting Centra to represent them. Typically, they claim their trucks observe the production values of leading Japanese brands such as Mitsubishi or Nissan on such components as power trains.
“If you investigate, you find claims that can’t be justified,” Tony says. “But clients who don’t know the industry often choose to buy on price.” He notes that China increased sales by 42 percent to Europe alone during the past year. “This is now also the case with premium Japanese lead brands which have extended delivery dates for Oceania dealers so their trucks are more costly to stock.”
Tony thinks that those who quibble over the price difference between machines from Japan and China are naïve. “Decisions made for these companies are by bean counters who lack practical experience. They ask, ‘Why should I pay $40,000 to $50,000 for a Mitsubishi or a Toyota when I can buy Chinese and pay $20,000?’ We actually have brought some machines [over] … to check their products out, and a fault may be as basic as using inferior steel for fork tynes … It looks the same, feels the same, but it’s not the same. So therefore you have possible damage and possible litigation going forward.”
As a former buyer of forklifts who has been in charge at Centra for 24 months, Tony is aware of the limitations of those assessing a ‘request for price’ without practical forklift knowledge. “A bean counter wouldn’t know what the hell goes on once you bring a truck into a warehouse and all the problems that occur afterwards, be it poor servicing, poorly specified, or if the operator wasn’t trained properly.”
The levels of practical knowledge were highlighted when Tony presented a recent buyer of Mitsubishi trucks with Australian-sourced, fleet-assessment software. “I said, ‘That package will give you all you ever want to know about trucks in your fleet, such as the cost per hour, from a maintenance point of view and if you’re reducing the value of the asset.’ He said, ‘Tony, it never entered my head. I don’t know the costs or when our current trucks are coming off lease.’ Costs and contracts are the necessary evils. Really, bean counters should stay away [from purchasing decisions]. They should look at the operating costs thereafter and the support thereafter,” Tony says.
He says companies find assessment hard when they don’t have the infrastructure, experience or staff to dig deep into the cost of forklift usage, maintenance and efficiency. “Only after purchase do they find out the shortcomings and high repair costs. A $10,000 ‘saving’ could prove to be a loss in the end, since few calculate actual service costs or likely residual value, and the client can be powerless after a bargain buy.
They can’t say, ‘You’re doing a lousy job, we’ll get our service elsewhere.’ Some larger companies are flogging off trucks [in New Zealand] because they have to. Therefore they have larger and bigger fleets to maintain and have difficulty servicing them. That’s what those looking for a provider have to be very, very wary of.”
Tony considers the prices for premium brands to be generally similar “though larger companies set prices based on their buy power to bind you into their service”. Sometimes Centra will walk away when the opposition offers a steep discount. “We’re not into forced selling techniques. We won’t drop our pants just to get the sale.”
Tony’s aim, in the light of 24 months as director, is to provide superior service through their offering of fleet cost-management with its industry-specific software. The company is expanding facilities at its Mangere Bridge site to cater for expected growth in service contracts. Current service clients include Air New Zealand, Carter Holt Harvey, New Zealand Steel and Ports of Auckland.
Tony believes the local lift truck supply industry is at the cusp of change, with two companies now dominant, and many key people in 12 to 15 smaller companies nearing retirement. “We are a potential buyer of those smaller companies,” Tony Emtage says.
Hugh Patterson can be contacted via email: hugh@writewords.co.nz. To contact Darren Allen, email: darren.allen@ggh.co.nz;
or for Tony Emtage, email:
tony.emtage@centrafork.co.nz |
