Bottom Line Garry Bartecki
Name your top three challenges for 2018 Before we get into a discussion about 2018 ….I have to say that the November issue of Material Handling Wholesaler was one to the TOP THREE since I have been involved with this publication. The cover story about warehouse technology driving costs down, Dave Baiocchi’s discussion of how procedures can lead to greater efficiency, and the columns covering a “manager checklist”…“how people do fail” and even my suggestion of the benefits of having outsiders help you analyze your business results…basically provides each and every one of you a discussion agenda for your next two or three management meetings and perhaps even helps you zero in on your Top Three Challenges for 2018. IF YOU DID NOT READ THE NOVEMBER ISSUE….STOP WHAT YOU ARE DOING, GO FIND IT AND READ IT!
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The lead article is what got me thinking about 2018 and beyond, especially in terms of how warehouse technology can both increase revenues and decrease cost, and how that same premise should apply to dealers who supply warehouse related products to their customers. The way I see it is if a business can both increase revenues and reduce costs…..they can most likely become a more competitive alternative in the marketplace, increase their top line and take market share. Which of course means you will eventually have to deal with them by meeting their pricing and lowering your profits if you have not reduced your costs to offset the pricing differential. And the world goes round and round. I personally believe that this scenario will play out as noted above because too many companies are doing exactly what I suggested….finding ways to reduce costs via technology, system upgrades, and internal audits to reduce “manpower” requirements related to clerical tasks. Improvements are all there for the taking, but will require some time and money to make things happen. What I worry about are dealers who are thinking about transitioning out of the business, recognize their shortcomings, but refuse to correct them because they don’t want to spend the money. Twenty years ago you could get away with that. But now, with the current rate of business change brought on by the IofT, the “put your head in the sand” approach will cost you because your operating results will generate a lower company value compared to what it could have been if required improvements were made to improve the bottom line. This is easy to understand…if other dealers on the sale block have both increased market share and reduced costs because of improvements they have made…which company will receive a higher value multiple…..yours or theirs….I think you know the answer. So, let’s assume you want to take action to improve both top line and bottom line results. Here is a plan to consider.
Published on Nov 7, 2017