Appointing Gijo George as its first ever Business Unit Director for Food and Beverage was part of a wider Hyster Company strategy to focus on a cultivating a deeper understanding of the unique challenges of key industry segments and help influence marketing initiatives and product development.
George is a seasoned supply chain veteran, bringing to his newly-created role not only 20 years of procurement leadership, but also a deep knowledge from a customer perspective – as a Hyster national account customer for 11 years. “I was a very active customer, too,” he asserts. “Pursuing innovative solutions for the business. Hyster approached me to join their marketing group because I had that customer perspective on the food and beverage side.”
The customer’s perspective
As a major cold storage and warehousing company with more than 170 global locations, the world’s largest cold chain solutions provider faced some very specialized material handling issues. Warehouses that operate at -20 degrees put material handling equipment under extreme stress: steel becomes brittle, batteries lose power, fluids become viscous.
“It was my job as a procurement professional to cultivate a strong supplier relationship. Hyster became one of the preferred suppliers at that time. Cold storage warehouses are among the most challenging warehouse environments, mainly due to condensation and the need for driver comfort,” he says, “and Hyster has become a serious competitor in the sub-zero space.”
A good example is the new Class III End Rider – designed with a variety of industry-exclusive and best-in-class ergonomic enhancements and productivity-enhancing Smart features to help operations boost labor efficiency and increase throughput in order picking, unloading and other warehouse tasks. It was awarded “2018 Product of the Year” by Material Handling Product News.
Hyster Company continues to apply its expertise and customer feedback from a broad global install base to develop innovative solutions that build on its reputation for strong, durable equipment while integrating intelligent software capabilities to help operations meet increasingly demanding productivity goals.
Total cost of ownership
As in any industry requiring capital investment in specialized equipment, there is a temptation, especially among smaller food and beverage operators, to make purchase decisions based solely on price. Gijo George is a passionate evangelist for the concept of total cost of ownership (TCO) that reveals the broader decisions facing a CPO.
“It’s our strategy to work very closely with our customers to help them manage their balance sheet.” For example, the emphasis on operator comfort addressed by the end rider can positively impact broader labor issues prevalent in many warehousing operations. Recruiting and retaining skilled labor is increasingly a challenge. With record low unemployment, labor has become a scarce and valuable resource. Some statistics show productivity falling by as much as 14% since 2013 and turnover rates around 30% have been recorded in ambient warehouses (60% in cold stores). Average onboarding costs for a skilled operator stand at around $10,000.
“Hyster is addressing the issue on two fronts: focusing on robust telematics solutions to measure performance and productivity while engineering ergonomic solutions to help improve operator comfort and reduce potential fatigue. We have some of the most comfortable platforms in the industry, designed to help minimize fatigue and absorb shock and vibration in a multitude of operating environments.”
Warehouses are not normally well-lit at the picking point. The new Hyster End Rider series of lift trucks have industry-exclusive LED platform lights to provide operator awareness in low light or congested areas and the LED fork lights offer in-trailer illumination, helping raise pedestrian awareness, can reduce product damage and help increase the bottom line.
The lift trucks also incorporate an ‘Intelligent’ suite of solutions providing improved productivity, load stability and ergonomics. An optional extended operator platform provides more usable foot space than the leading competitors, allowing operators to adjust stance to provide postural relief. The Ultra Cushion reduces shock and vibration to improve operator comfort and provide steady footing.
George involves the financial leadership to explain the real cost benefits of such equipment. Acquisition costs are balanced against operational costs, end-of-life costs and labor costs. “I aim to give the total picture; a better appreciation of the decision they are about to make - and for our current customers we point out that trucks become more expensive with every year that passes. They can consider minimal technology investments such as telemetry that can be added onto older trucks. This gives visibility into the way the truck is operating and the ability to measure and manage those costs. Our dedicated fleet management organization works as consultants and advisors to our accounts in order to streamline and manage those costs.”
Hyster sale teams are also equipped to support smaller customers that are not ready to invest in large-scale fleet enhancement. They may not realize that they can adopt the latest and most appropriate electric, lithium-ion, hydrogen fuel cell or gas-powered units without heavy capital investment. “We have designed pay-per-use models that make it economically feasible for a ten-truck customer to take advantage of a hydrogen fuel cell solution that would yield 20% to 30% power gain and 10% to 15% productivity gains just from not having to refuel so much and the resultant downtime.”
Gijo George spends a lot of his time traveling the North American market to learn at first hand what his customers in different industries really want. Its stakeholders, he has found, share the Hyster vision of an ecologically and economically sustainable end-to-end supply chain. “We deploy a number of strategies to collect customer feedback and identify their pain points. At the same time, as an organization with manufacturing facilities globally, we leverage the expertise and experience of our best suppliers and solicit opportunities to work with them to add value to the product.”
Cubes to lakes
Fluctuations in the U.S. and global steel economies are another factor that affects the thinking of equipment manufacturers. George maintains close contact with his financial, procurement and IT counterparts to focus on solutions that make best economic sense while optimizing lead times. “We utilize a lot of just-in-time data management and data mining tools, moving us from ‘data cubes’ to data lakes which can swallow the input costs, global price indices, tariffs, tax information and the like, to enable the best solutions and the best decision making across the business.”
By focusing on the food and beverage customers, Gijo George sits at the heart of the business. After all, this fast evolving, population-driven sector will never decline, and Hyster is positioned as a key player in its development. A characteristic of operations in this space is that they have purchased piecemeal in the past, ending up with a stable of equipment from different suppliers. “Over time our customers acquired different brands of equipment. Another aspect of my job is to help them understand how our brand is differentiated in the market and educate them on the TCO (total cost of ownership) that they would be returning to the business.”