View from the top

Forklift manufacturer’s Vice President reflects on ten years of change

For a strategic view on materials handling, Eureka’s Mark Nicholson has spoken to Hans Seijger, Vice President Marketing and Sales for Cat® Lift Trucks in the EAME region. What does he see as the most interesting and important trends over the last ten years?

Automation

Mr Seijger views technology as a big driver of change, noting that automation and integration are at the forefront of this industry’s advancement. The aim is to create a complete materials handling process in which every piece of equipment works together in the most efficient way possible. Data capture and exchange are keys to improvement, hence the fast development of aids such a barcodes, scanners and RFID tags.

“Labour costs and workforce sizes are falling as the need for driver-operated machines declines,” he says. “I believe there is still a lot more scope for AGVs (automated guided vehicles) and other automation in warehouses, and we will see the trend continue.

“Both manufacturers and customers are investing strategically in automated systems. As demand increases, economy of scale will make them more affordable. With a well-established and cutting-edge AGV design and manufacturing facility within our family, we at Cat Lift Trucks are well placed to go with that change.”

Recession and recovery

Ten years ago we saw the start of the latest recession. We are now well into the recovery phase, but things have changed. Today we have to deal with a very different world, which Mr Seijger feels has been largely shaped by the recession and its aftermath.

“Electric forklifts are taking over from IC engine, while warehouse trucks are replacing counterbalance. Green issues and safety regulations have become more of a consideration. And today’s warehouse industry has a greatly altered footprint.

“I’m happy that the market is currently so buoyant and positive, and that people are much more willing to invest. If managers are feeling stressed, it’s often over how to realise their projects faster and within budget. In addition, rapid business growth is causing strain throughout supply chains, with availability of products becoming an issue.”

It’s not just about purchase price

Making better profits is a goal of every business, but there is now much more to this than seeking lower-priced forklift trucks. Mr Seijger comments that after a period of intensifying pressure on purchase price the focus has changed direction.

“Customers are focusing more on forklift rental and looking for great all-in deals covering service, parts and even energy. They still want further savings, so we must develop solutions that do everything more efficiently. Improving distribution is a top priority, with a growing trend toward direct distribution, but we must work to upgrade the quality and value of all our services. We and our customers need to increase our investment in advanced technology and equipment to make this possible.”

Speaking of technological change, the potential of digital business platforms has been taken to a whole new level by some new players. Forklift truck rental is booming and the question of who will own trucks in the future has become an interesting one.

“Think of companies like Airbnb and Uber, and other pioneers of the ‘sharing economy’. In this revolutionary economic model, new entrants to a market can achieve huge success by giving customers access to other people’s assets. We all need to be aware of this trend and its potential impact on our businesses.”

Globalisation and consolidation

Cat Lift Trucks’ Vice President observes that globalisation is having a major impact on the operations of forklift truck manufacturers and their customers. One response from its ‘mother company’ has been to make strategic acquisitions, strengthening its ability to meet customer needs. Cat Lift Trucks is also extending into various markets and segments where its presence was previously small. Many of its customers are consolidating their businesses too, and trading across borders.

“To meet the needs of these growing companies, we need to develop processes and procedures that work across borders. They are attracted toward manufacturers and dealers who can take care of everything, so they can cross borders without complication and extra effort.

“Another outcome of our customers’ consolidations is that local dealers may lose direct access to them. To maintain the dealers’ market share, the manufacturer must fill the gap by bringing business to them from national and multinational companies.”

“You need to be quick in deciding which trends to follow and determining your position.”

A strong foundation

In 2017, the Cat Lift Trucks operation for Europe, Africa and the Middle East celebrates 25 years of serving customers from its base in Almere, The Netherlands. Mr Seijger has been impressed by the quality of its long-term relationships with dealers and by its handling of change.

“Global economic pressures required a substantial reshaping of the organisation’s manufacturing footprint in 2012, but the change was managed well and we have come out stronger. The dealers’ confidence in our relationship and its continuity, as shown by their very significant and continuing investment, is an extremely valuable asset. We have a very strong foundation. I should add that our prime responsibility is still the development of great new products that excite customer interest, and in that area we also continue to excel.”

Loving the challenge

When asked what worries him about modern materials handling, Mr Seijger says he sees no problems – only interesting challenges.

“I enjoy this dynamic environment and its challenges. I’m excited by the rapid technological development and its impact on distribution models, product development and organisational efficiency. It’s all fascinating to me.

“I especially like the fact that the pace of change is accelerating. That suits my personality. You need to be quick in deciding which trends to follow and determining your position – and very soon you have to review it because the world has changed again. I think that’s great.” •