Bringing New Life to Old Equipment

By Leslie Langnau, Senior Technical Editor.

In a 24/7 world, retrofitting offers material handling managers a way to deal with the challenges of aging equipment and new productivity demands.

Age hits all material handling equipment. Wear and tear cut into productivity. Newer technologies outperform older features. And vendors stop stocking replacement parts, pushing equipment into retirement.

But age is not the only reason to upgrade equipment. As businesses embrace business model after business model, retrofitting can be a great way to upgrade equipment functions at low cost. Often, for a fraction ol the cost of new, you can add flexibility and improve the performance of your systems, lengthen operating life, as well as reduce maintenance needs.

Despite the benefits of retrofitting, though, it's not always a simple process. "Contractors are performing 'open-heart surgery' on someone's functioning, productive, mission-critical system," said Mike Kotecki, senior vice president, material handling integration at HK Systems, "while they're trying to get their job done. There's no tolerance for failure."

To keep the disruption to a minimum and gain the most benefits, there are several steps managers and engineers can take.

Out with the old?

Whether you've decided to retrofit or even buy new, it's important to consider your objectives. For example, how long is the system expected to last? Is the retrofit to help control specific costs. like maintenance?

"You also need to determine whether you will be handling the same types of items in five years," said Bill Craig, systems engineering manager for material handling solutions, Lockheed Martin. "Also, look at how well the current system meets the needs it was meant to satisfy. What's changed in the functions now required? For example, if you expect the need for throughput to increase by 20 percent, you can probably accommodate this with a retrofit. If throughput needs are higher, then you may want to buy new or add a parallel system."

 "Software should almost always be bought new," says Stafford Sterner, vice president of marketing at SJF Material Handling Equipment.

"There's always upgrade potential with software." agreed Dan Labell, president of Westfalia. "The WMS algorithms can be improved, for example, grouping certain retrieval missions for better throughput. Plus, there's a lot of smarts that you can add to software that older systems may not have. Some of this newer technology runs in the background and really isn't noticeable. But, what you will see is greater flexibility in programming, such as using wireless communications to program PLCs. That's functionality that didn't exist before."

"In today's world," added Sterner, "everything has a maximum life cycle of five years, including your business. The focus on how you run and do your business is in continual change. In five years, your present system isn't going to be what you want; your business model will change; the product and how you handle it will change; the way you bar code it, track it and inventory it, are all going to change. Don't get locked into trying to find a long-term, cure-all solution, because material handling is becoming an evolving process.

"And if you see things changing significantly," continued Sterner, "retrofit may not be the solution."

Another key factor is order profiles. "Profiles dictate the type of warehouse you should have and, thus, what can be retrofitted," said Paul O'Connell, president and CEO of Operations Concept. "Analyze your order profiles.

"It's crucial to keep up with SKU profile maintenance," O'Connell continued. "For a warehouse management system to work well, it has to know cube information: weight, dimension, height, and so on. This is especially important when 60 percent to 70 percent of goods come in from overseas and U.S. companies let foreign vendors put product into just about any box they can find. Thus, the vendor may have changed the pack quantity. The biggest mistake made today is to accept these boxes without inspection. Maintenance is the most important function with WMS software and people don't do it. In addition to SKU maintenance, you need to do location, equipment profile and people profile maintenance too.",

Once you've determined system objectives, it can be quite a project to choose among all the available component options. It's tempting to use new components just because they are new. "But those components may not be best for the application," said Kotecki.

Several companies can help you analyze whether you really need the latest components through a "modernization audit." They will cornpare the existing system with your objectives and either develop a design for retrofit and/or new, depending on available funds. The factors these audits can consider include internal rate of return or net present value, power consumption, laBOR issues, maintenance, insurance costs, OSHA issues, even tax consequences of accelerated depreciation. They can even give you an expected return on investment.

Some audits involve a simulation of the upgraded system, letting everyone see exactly what to expect from a retrofit. Others may be based on a program like Excel, which will provide speeds, through-puts, costs and other hard data.

Bit by bit

Whether you're refurbishing AS/RS systems, carousels or conveyors, there are common components that can give you the most bang for your buck.

"For example, upgrades in motors, positioning systems and controls can boost throughput of automated storage and retrieval systems by 20 percent to 25 percent," said Craig. "Carousel upgrades usually consist of replacing some controls and mechanical elements, but the throughput won't be as high as with other material handling equipment. That's because people manage the picks in these systems. Control upgrades, how- ever, will often make the system easier to maintain and will improve reliability."

"The software enhancements that have happened just in the past two years," said O'Connell, "have dramatically improved the efficiency of both mini-load and standard AS/RS systems. With these enhancements you'll get flexible picking, the ability to wave orders in many orientations, selective picking to order, bulk ordering, regional and state picking, and so on. Newer warehouse management programs work along with the equipment to give you the optimal or desired pick pattern."

Increasingly, continuously moving equipment is being replaced by systems that run only when needed. For example, upgrading belt or shaft driven conveyors with roller conveyor systems that use photoelectric sensors to turn on roller sections only as needed. Not only does this change reduce noise levels, it's also a good way to save on power, given the recent energy availability problems. (For more on noise reduction and conveyor maintenance, read the article, Keep 'Em Running, page 45 in the February issue of MHM.)

Large automated storage and retrieval systems can be very expensive to retrofit. But there are some economical upgrades you can make. "For example, you can change the algorithms, location dimensions, and zoning or location matrix criteria," added O'Connell.

Interfacing

When retrofitting, attention must be paid to interfacing new or refurbished components with the old. Most problems in linking industrial components have been solved. The problems that occur now involve linking industrial systems with corporate business systems, such as the host financial systems. No one expected the need to tap into financial systems and take data from them. "However," said Kotecki, "the good thing about this link is that you rarely have to communicate in real time."

Special programs, usually known as software drivers, can be written by staff programmers or by system integrators, to facilitate the connection.

In other interface cases, solutions involve the use of a cell controller. its function is to manage and isolate existing interfaces at the WMS or even AS/RS control level, reducing the disruption to these systems.

"Be aware, though," said Sterner, "that vendors tend to recommend their own line partly to avoid potential integration issues."

The latest development in retrofitting is to turn to "renewed" equipment. These pieces fit applications where you need devices for a new function but you don't want to buy brand new. Not quite new, yet a step beyond reconditioned, this equipment has undergone disassembly, evaluation and comparison to original specifications, and finally re-engineering to fit the needs of new applications. In some cases, these devices can cost about 50 percent less than a new device.

Changes to material handling processes are increasing as new business models arrive. Upgrading equipment, in one format or another, is a good way to meet the demands brought about by these changes.

MHM

Rev Up Your Search Engine - Make it Work For You

By Brian Milligan, Contributing Editor

Internet search engines can do more than just find information. They can also be used to help other companies find out about you.

Industrial distributors say there is a lot to be gained by using the Internet in this manner. Stafford Sterner, vice president of marketing and web development for SJF Material Handling Inc., Winsted MN, says distributors can use the Internet to establish their brand. To put it another way, if customers find their names appearing often enough in a directory they will begin to easily associate that company with their needs.

"What you want to do is make sure your name is synonymous with the information and product you are trying to sell," says Sterner. "Since you have a large audience on the Internet, utilize the search engines."

"In this field, when people think of a conveyer, who do they think of?" Sterner asks. "How about distribution? Fulfillment? What companies come to mind?"

"Branding is very important," says Sterner. "If people type in material handling and SJF.com comes up every single time, people who are looking for equipment for warehouses will think SJF is synonymous with material handling equipment."

Sterner speaks from experience. He believes that 52% of the traffic that comes to SJF through the Internet uses a search engine to find him. If they liked what they found, they bookmarked the site and returned to it often.

The order in which sites show up in a directory is of the utmost importance. When a customer uses a search engine, the sites that show up first are the ones that will make an impression.

After conducting a search, analysts say most Web surfers will go through the first page of results thoroughly. After that, their interest wanes quickly. So if your company comes up on the second directory page, the ability for people to find you by using a search engine just dropped dramatically. That first page is prime real estate.

Some Web site placement companies today say they can get your company on that first page - for a fee. In this case, a distributor could pay for the chance that these companies would put them on top of all searches.

But Akarin Weatherford, chief technology officer for Indian River Consulting Group, Fla., advises against this. A lot of these companies' methods try to out-smart search engines and make a site "trick" its way to the top of the search. The search engine programmers quickly render these tricks ineffective when they are discovered. If a distributor wants to pay for placement at a search engine, it's best to go directly to each specific search engine and directly participate in their paid placement programs and avoid any middlemen.

Weatherford notes that a crawler will index every page on a Web site. A Web savvy distributor can force their way to the top of a directory by putting key words about his operation at the top of the site. "This is so that person can find me," says Weatherford.

"One thing you don't want is to overplay key words," Weatherford continues. "Be as unique as you can without alienating the person that visits your site. Don't take key words from competitors and put them on your site."

Weatherford says the person designing the site should take the top 10 words that describe their company, write them down, and include them at the top of the page.

"Put them in the first few words of content on those pages," says Weatherford. "Some search engine will ignore finding your data, some will look at the content, some at the file name. You want to cover your bases for all search engines out there so they will come and find you."

New Recruits

By Brian Milligan, Contributing Editor

In the continuing tight employment market, distributors must be aggressive and look to new sources of laBOR.

SJF Material Handling turned to migrant workers. MSC Industrial Direct increased its recruiting staff and offered more competitive compensation packages and intense training to new employees.

Both are examples of aggressive ways to tackle the tightening laBOR market, which impacts industrial distribution along with other industries.

They were necessary steps in today's tight laBOR market, even as the U.S. economy shows signs of softening. Due to population patterns and an aging baby boomer market, the laBOR pool is expected to continue to be tight even as the economy heads into the predicted downgrading. Like many other industries, the industrial distribution business is having to work harder and take clever steps to find and retain employees.

Keeping up with growth

Headquartered in Winsted MN, SJF Material Handling began as a reseller of used and surplus material handling products. Today, the company sells new, used and reconditioned equipment. It is a full-systems integrator that specializes in complete turnkey solutions and represents more than 50 lines of new material handling products.

SJF had sales of $11.6 million in fiscal 2000 with anticipated growth rates of about 22 percent. But it is that growth rate that causes some of its biggest challenges.

"Our growth rate has always made maintaining current employees, acquiring new ones to coincide with our rapid growth and demand for talented people, a critical concern for our company," says Stafford Sterner, vice president of marketing for SJF.

The challenge only intensified with the tightening laBOR market.

"There was a lot of competition for employees, with the economy and the way it's been,." says Sterner. "Anyone who wanted a job had an opportunity to find one."

As the market tightened, the company used conventional methods to find employees,. as did other distributors. One such company is New York-based MSC Industrial Direct. The company sells industrial products to customers across the country and depends heavily on a nationwide sales team.

MSC experienced 20 percent growth in sales in 2000. "We've been growing sales and profits at a very high level," says Tom Cox, senior vice president of sales for MSC.

But to keep up with the growth, MSC needed a strong sales force. This is where the challenge came in. "It's always a challenge to find qualified recruits," says Cox. "You need people to keep the machine moving forward."

Cox says MSC went on the aggressive in the face of the tightening laBOR market. It sought to expand its sales team. To do that, it expanded its recruiting department and provided managers with important interviewing and recruiting techniques. It held out the very things that salespeople in the industry would find attractive. It offered extensive new hire training programs and impressive financial incentives to associates who could recommend new hires.

New employees were given a competitive compensation package that included good benefits, salaries and bonuses. The company strives to offer long-term career opportunities to top salespeople. Upper management held biweekly conference calls with sales management teams to update them on the recruiting process for each open position.

Cox says these aggressive steps are working. MSC has hired 575 people since September, 225 of whom are in sales. In addition. 140 new sales positions have been created this year in order to capture market share. To support new hires, MSC provides an extensive. 65-day training program.

Still, with all of these assertive steps, Cox says his company has learned some valuable lessons. "I guess the biggest is to take your time in finding a good match," Cox says. "It takes a long time to recover from a bad match with a new hire.'

Beyond traditional methods

SJF took similar steps - and went one further.

Ever searching for new employees, SJF resisted temptations to try and "steal" employees from nearby distributors. Sterner says SJF was looking for a long-term solution to its problem. And simply enticing another company's employees to jump ship was not a good one.

But by 2000, Sterner says the company was ready to try to tap into something new. It was determined to utilize the area's Hispanic population.

Migrant Hispanic workers came to the area to work during the harvest season. Sterner says SJF started to recruit them, and the company was delighted by what it found.

Many were skilled workers who'd been in the construction industry in Mexico. They understood and knew how to operate industrial machinery. They were gifted at building roofs and working with stone.

"We found that a lot of these people, as we got to know them, had very high skill backgrounds," Sterner says.

Convinced that they were on to something. SJF management teams traveled to Cancun and other parts of Mexico. They found many people who could not find work in that country and were eager to come to the United States.

Nancye Combs, senior professional in human resources for Kentucky-based H.R. Enterprise, says creative strategies like this have become increasingly important in a strong economy.

Combs notes that migrant workers in the U.S., many of whom are Hispanic, were once considered to be on the bottom of the laBOR totem pole. But increasingly, the industry is discovering their abilities and hiring them to work in factories and other environments. Today, she says this population is a growing boon to industrial distributors.

"The immigration quota filled up. So we're begging them to open it up again," says Combs. "So we have unskilled laBOR and semi-skilled laBOR that we are using in distribution centers for inventory control, data entry, forklift operators, shipping and receiving workers, and there's just not enough of them. There's much more demand than there are [people]."

Investing in new employees

SJF made it a point to learn about the Hispanic workers' concerns and needs, and catered to those concerns. Management teams sat down with the workers who were fluent in English and tried to help them adjust to life in the United States.

"This involves everything from their professional life to their home life," says Sterner. "To find them ways to feel at home within our company."

"We found they didn't like being away from their families:' says Sterner. "And if they could, they'd go back to Mexico and live as wealthy people in their community with the money that they make here."

SJF offered the workers advancement opportunities, with no limitations. And the company likewise provided them with an education related to both the work and non-work environment.

Leon Chavez took advantage of those offerings. Chavez, who is from Mexico, worked on farms in Washington State until his brother convinced him to come to SJF in 1995.

"My brother, he was working here, and he said, 'These guys are hiring people. Come up,'" Chavez explains.

For the next seven months, Chavez worked as a general laBORer at SJF. But his sharp mind and ability to learn quickly helped him gain promotions. Today he is a materials manager at SJF.

"They give me opportunities, company training in a field outside my department," Chavez says. "They got an experienced welder to teach me after work or in my break time. I learned welding, fabricating [and] painting."

Others would follow Chavez' example. SJF opened up all of its resources to the Hispanic workers, providing training in whatever the workers desired. If they wanted to learn to weld, they were taught how to weld. They were taught how to run press brakes, operate heavy machinery and sophisticated shop equipment. Workers like Chavez were picked to become leaders, making their way into the management team. They served as liaisons to other Hispanic workers who were not as fluent in English. The company now has 10 Hispanic team leaders who work in various parts of the company.

"We said, 'If this is what you want to do, we will meet you halfway," says Sterner. "We will provide you with the tools and the opportunity to do that."

Sterner says SJF Material Handling quickly benefited from the Hispanic employees' work ethic. They discovered a hardworking core of employees who were willing to learn fast.

"What we've found is that the work and craftsmanship they have is phenomenal:' says Sterner. "They just needed an opportunity to use it."

The workers return home to Mexico between Christmas and late January. During these breaks, Sterner describes what he calls a "snowball effect," in which the returning workers tell old neighBORs about life in the United States and their jobs. In this scenario, they become ambassadors and encourage more workers to apply for jobs at SJF. Those who bring in other workers are given compensatory rewards.

"They get swamped with people who ask, 'What's it like? How do they treat you? What kinds of jobs are there?'" Sterner says.

Sterner says SJF remains committed to encouraging the workers to stay with the company for a long time. This means ensuring that they are happy on their jobs; that they enjoy their work.

SJF has been successful at keeping a large portion of its Hispanic employees. Today, 20 to 30 percent of the company's workforce is Hispanic. But that isn't to say there aren't challenges, not the least of which was the language barrier. Even more challenging was the reaction from people living in nearby towns. Winsted is an old, primarily white, community located some 50 miles from Minneapolis. Sterner says SJF quickly realized that racial stereotyping could be a problem.

"The problem is, a lot of the time people get stereotypes that these people are drifters," says Sterner. "They look at them as being manual laBOR people who work in unskilled positions and have no desire to better themselves.

"They said, 'They're here for a temporary stay, a quick fix, and not part of the overall future of the company," Sterner continues. "We said, 'We don't buy that.'"

Answers to this problem were hard to find and SJF continues to try to find solutions today. The company tries to draw the workers' accomplishments to the attention of the press as much as possible, hoping that the articles will help break down the barriers.

The company also faced the challenge of keeping the employees and helping them work around migrant worker laws. All employees are naturally required to have Green Cards, and SJF constantly monitors the status of the cards. SJF typically plans for each worker to stay for a year and return home until they can return again to the United States and work.

Employees' schedules are staggered to avoid work disruptions. Three employees to date have applied for citizenship. and Sterner hopes more will do the same.

Northern Light PR Newswire

SJF Contact: Stafford Sterner - (320) 485-2824
Agency Contact: Bill McArthur - (763) 574-0836

SJF Offers Customers an "Unfair Advantage"

Winsted, MN - (April 1, 2001) SJF Material Handling Inc., a leading liquidator of material handling equipment, has introduced "The Unfair Advantage" program. This new service provides individuals an opportunity to benefit from the large volume of high quality, barely used equipment that is flooding the market. As a result recently where we are seeing large dot.com's are going bust and general trend of shutting down nonessential facilities within the business community, this service has been attracting and ever increasing amount of interest.

SJF has a reputation for buying complete facilities and liquidating them quickly, but according to the company was beginning to feel overwhelmed by the number of companies either closing down operations or just in need of ready cash. "We have the largest inventory of material handling and warehouse equipment in the country," said Stafford Sterner, SJF's Vice President of Marketing, "but even we don't have room for the volume being created by today's economy. We could get selective and just take part of what is available, but our reputation, and often our margin, depends on being able to buy the entire lot. The Unfair Advantage program is designed to take care of this problem."

Customers can sign up for the program through the Unfair Advantage link on the company's web site at sjf.com. Members receive a monthly newsletter called "Industry Insider" that alerts them to equipment opportunities. More importantly, they get the new Red Alert service. Members can select the type of equipment they would be interested in. When that type of equipment becomes available, they receive notification via e-mail. (Members lists can be changed or modified and the service can be cancelled at anytime.)

Essentially, the service allows SJF to assemble a consortium of its members thus providing SJF additional potential outlets for each deal. Doing so allows its members to take advantage of greatly reduced pricing on a wide range of items due to the large quantity discounts SJF is able to acquire buying in this fashion
The company does not charge for the service, nor do they take a fee for putting the deal together. "Our profit comes from the lower prices we can arrange for the equipment we are interested in ourselves - and members within the program.."

In mid-March, SJF tested the interest in the program by offering it to newsletter subscribers. "Within three hours, we had 82 members signed up," said Sterner.

In business for over 20 years, SJF Material Handling Equipment is a Winsted, Minnesota-based full service provider of new, used and "renewed" material handling equipment. They also provide complete design, layout, engineering, profiling, set up, installation and testing for entire facilities.

Northern Light PR Newswire

SJF Contact: Stafford Sterner - (320) 485-2824
Agency Contact: Bill McArthur - (763) 574-0836

SJF Introduces "Renewed" Product Line

Winsted, MN - (February 26, 2001) At the recent ProMat show in Chicago, SJF Material Handling introduced the materials handling industry to a new category of equipment. Not quite new, but a step beyond reconditioned, the company calls this new concept "renewed" equipment.

"The industry already understands the difference between used and reconditioned," said Stafford Sterner, SJF's Vice President of Marketing. "The problem is that "reconditioned" can be a very vague term, covering anything from a quick paint job to a complete rebuild. Our renewed equipment, on the other hand, has gone through a very specific program of disassembly, evaluation and comparison to the original specs, reengineering to the new application, assembly and cosmetic treatment. This kind of work is our specialty - something we have been doing for years. The difference is that the "renewed" label tells the customer exactly how much value has been added, and just how close to "like new" the system will perform."

Before the ProMat show, SJF promised attendees something "radical, innovative and revolutionary." At the show, and particularly at the company's Open House, SJF people talked to hundreds of end users about their proposed "renewed" equipment program. "We wanted to make sure that this was something people wanted," said Sterner. "We were pleased, but not really surprised, to see how excited some of these users got at the idea that they could take some of the guesswork out of purchasing previously owned equipment. Based on this response, we expect to see rapid growth in the sale of systems carrying our "renewed equipment" label."

In business for over 20 years, SJF Material Handling Equipment is a Winsted, Minnesota-based full service provider of new, used and reconditioned material handling equipment. They also provide complete design, layout, engineering, profiling, set up, installation and testing for entire facilities.

Reaching for Success by Offering Opportunity

Unemployment was yesterday's problem. Today, we hear about full employment, meaning that most people who want a job can get one, even if it's not the one they think they deserve.

Problem solved, right? Not if you are an employer struggling to fill positions.

In McLeod County, where my company, SJF Material Handling, is located, unemployment has run about 3 percent -a rate that continues even as the economy has softened in the fourth quarter. (Unemployment in McLeod County was 2.9 percent in November, the latest figure available. That compares with a rate of 3.1 percent statewide and 4 percent nationally.)

Yet even in this environment, our company, which provides new, used and reconditioned material handling and warehouse storage equipment, has managed to grow from 10 people to nearly 100 employees. To accomplish this, we realized early the necessity of looking at alternative methods of hiring.

Like many Minnesota employers, we worked hard to fill positions with good people, but we succeeded in spite of the fact that there just weren't many people looking; those who were looking often didn't have the skills we needed, and many young people are unwilling to start at the bottom, learn new skills and earn their advancement. Fortunately, SJF developed a strategy - or maybe stumbled onto one - that helped us to find, hire and retain a number of excellent employees - and much of that strategy involved minority recruiting.

A few years ago, we happened to hire several excellent Latino employees. With their help, we went looking for more of the same. Like many of today's growing companies, we offered recruitment bonuses to people who brought in new employees. More importantly, however, we offered a level playing field where every employee has the opportunity to earn promotion. Workers help new hires to become a part of the company and the community. All in all, the program has been an outstanding success.

Of course, a few adjustments have been necessary. For one thing, instead of a company softball team, our Latino workers formed a soccer team. Language can be a minor problem, but most of our Latino employees work hard to improve their English on their own time. Our Anglo workers, myself included, are picking up a little Spanish. With patience and a little gesturing, we communicate.

On a more serious note, the acceptance of these workers has not always been as complete in the community as it has been within our company. A couple years ago, two of our workers applied to the same bank for a loan. Both had held basically the same type of job and had about the same length of service. One received the loan and the other didn't. It was the minority worker who was refused, in spite of a personal recommendation from one of the owners of the company- me.

Bypassing Stereotypes

These problems aside, SJF's minority recruiting has been extremely beneficial for the company, and all because we were able to get past some outmoded stereotypes, such as:

• Latino workers have no sense of permanence. In many parts of this country, and perhaps especially in rural, areas such as McLeod County, Latino workers still have the image of the migrant worker. True, many people who come to this country from Latin America are forced to follow the work from one harvest to another. However, nobody chooses the life of the migrant worker because of a love of traveling. Perhaps even more than our other workers, our Latino employees value permanence, possibly because they know how hard life can be without it. They are looking for stability and a nice place to raise a faimily.

• Latino workers are unreliable. I have no idea where this one came from. In our part of Minnesota, we are used to the small-town work ethic. We have high standards for punctuality, productivity and a general willingness to pitchin and get the work done. All of our employees are expected to live up to these standards; and they do - none more so than our Latino employees.

• Latino workers have no ambition. The definition of ambition seems to have changed in recent years. For some people, ambition means that you graduate from school, get an easy but high-paid job and retire while you are still young enough to go skateboarding. If SJF wanted to hire a new vice president, there are any number of inexperienced people out there who would be willing to give it a shot, but very few people are willing to take an entry-levelposition and try to make something out of it.

Recruiting in the Latino community, however, we have found the best kind of ambitious people. They are willing to take a part-time position so that they can prove themselves. They are willing to start at the bottom, as long as they know that the road to the top is open. They are eager to pick up the skills (in our company, these might include painting, welding or computer skills) that will prepare them for a higher position in the company.

From an employer's perspective, the ideal employee is one who does the job that he or she was hired for, while preparing himself or herself for a position of greater responsibility. This type of employee has become harder to find, but SJF has succeeded by casting our recruitment net a little wider and proactively seeking minority employees.

Because our policy developed organically, building on a base of a few exceptional Latino employees, our experience is primarily with this minority community. Other companies, I am sure, have similar success stories regarding their black, Asian or other minorty work force.

There are still some companies, however, that fail to recruit actively in minority communities. Some, I am sorry to say, actually avoid hiring minorities. These companies are shooting themselves in the foot, and yet they are probably the first to complain about how hard it is to find good people.

Northern Light PR Newswire

SJF Contact: Stafford Sterner - (320) 485-2824
Agency Contact: Bill McArthur - (763) 574-0836

SJF Offers Free Buying Secrets Report

WINSTED, Minn., Jan 19, 2001 /PRNewswire via COMTEX/ -- SJF Material Handling is offering people a free special report entitled "20 Buying Secrets Industry Insiders Don't Want You To Know." The 16 page booklet provides materials handling equipment buyers with all the information they need to make informed purchasing decisions.

According to SJF's Vice President of Marketing Stafford Sterner, the materials handling options available today can be very confusing. "You can buy new, used or reconditioned. You can buy over the Web. You can buy the whole package or work with a number of individual dealers -- some of whom may not have your best interests at heart. It's easy to get lost without a road map, and that's what this report is intended to be."

The report can be ordered by phone (800-598-5532) or fax (320-485-2832), or on SJF's Web site (http://www.sjf.com).

In business for over 20 years, SJF Material Handling Equipment is a Winsted, Minnesota-based full service provider of new, used and reconditioned material handling equipment. They also provide complete design, layout, engineering, profiling, set up, installation and testing for entire facilities.

Northern Light PR Newswire

SJF Contact: Stafford Sterner - (320) 485-2824
Agency Contact: Bill McArthur - (763) 574-0836

SJF Will Host Open Forum at ProMat

WINSTED, Minn., Dec 28, 2000 /PRNewswire via COMTEX/ -- SJF Material Handling will host an open discussion of material handling industry matters during the ProMat show in Chicago. The event will be held Feb 13th from 4:00 to 9:00 p.m. at the company's hospitality suite at the Hyatt Regency.

In business for over 20 years, SJF Material Handling Equipment is a Winsted, Minnesota-based full service provider of new, used and reconditioned material handling equipment. They also provide complete design, layout, engineering, profiling, set up, installation and testing for entire facilities.

Building a better e-site

By Stafford Sterner

Let's face it. The "e" revolution of the last few years – e-mail, e-commerce, e-business and e-everything-else-under-the-sun – has not lived up to its promise to improve communication between businesses and their customers. It's not the fault of the technology, which really can do all the things the advocates of e-business promised. It's the fault of businesses who have used technology to put even more distance between them and their customers.

Send an e-mail to customer support for a quick and comprehensive response? Great Idea! Unfortunately, too many businesses use e-mail to screen out the annoying questions and the "unimportant" customers, freeing up time for their support people to do…well, something else.

Purchase products online without having to deal directly with a sales person, while still having access to all the information needed to make an informed purchasing decision? Another great idea! Unfortunately, most e-business sites are so complex and difficult to use that potential customers get BORed and log off long before they reach the button that says "Purchase."

Notice that I said most businesses. There are some businesses, including, I hope, SJF Material Handling, that are using these powerful electronic communication tools the way they were intended, and are consequently reaping substantial benefits in terms of increased sales, lower sales costs, and, most importantly, improved customer relations.

How did we get so smart? Did we listen to the experts? No, we listened to our customers.

Building From the Ground Up

Two years ago, SJF launched an extensive online e-store, an addition to its established informational site which had been telling people about our company and products for the previous four years.

Before making the jump to real e-commerce, however, we decided to do everything we could to avoid the problems I have been talking about. We started by looking at the competition.

Since warehouse and distribution equipment can cost hundreds and even thousands of dollars per item, there was a limited number of sites that SJF could use as a model. Among the sites we did look at, most seemed to take a "build it and let's hope they come" approach – create a site according to the advice of the experts and then sit back and wait for the customers. We went another way.

Instead of trying to develop the perfect e-commerce solution and hoping that our customers would agree that we got it right, we decided to build a storefront based on design, layout and presentation strategies that had already proven themselves successful, put it online and then ask users to critique it using a variety of feedback forums. From day one, the plan was to partially – or even completely – rebuild the site based on this input. It wasn't easy to sell this concept within SJF, but after reviewing the mistakes that had been made by other sites, it seemed like a logical approach.

Instead of "build it and hope that they come," we took the approach of "let's build what we think customers want and then ask them how to make it better."

To show them how much we valued their input, we provided "e-business partner" T-shirts to everyone who provided us with viable feedback and suggestions. This allowed visitors to be a part of the development process. Eight months and 6000 suggestions later, we had a completely revamped e-store built for customers by customers (SJF.com)

Web Site Design

Some of the customer comments were real eye openers. For example, we found that the market for material handling equipment is divided into two very different factions. One group is new to the Web and wants detailed photos and as much product information as possible in order to feel comfortable with a buying decision. The other group is made up of seasoned material handling people who know what they want and just want to get to that purchase button as quickly as possible.

The challenge was to develop an e-commerce solution that was streamlined, fast and easy to use, while at the same time containing large amounts of easily accessed product information.

Our research showed that our customers wanted the purchase function to be within three levels of entering the online store. In our original design, it took six clicks, but by then about two-thirds of the users had lost interest and left the site. When we got it down to five levels, only about a third left the site early. At three clicks, we still had the attention of over 95% of the visitors.

We also discovered that people who shop online often feel lost, frequently because they have to use the back button on their browser several times to get back to a place they recognize. We decided to create direct links to key areas in the site, and make them available on every page. SJF shoppers could, at any time, get back to the homepage, access customer support, re-enter the online store at its top level, or jump to a different product category – with a single click.

The problem of customers requiring different levels of detail was dealt with in several ways. For example, customers are at first shown fast loading thumbnails of the product photos. A click on the thumbnail opens a new window with a larger, more detailed photo.

Next to the thumbnail, a drop down menu allows buyers to view the size and models available, as well as a brief overview of the product. Seasoned buyers can simply select the model desired and put it in their shopping cart. For those requiring more information, there is a link to a page with much more detailed product information.

We found that most e-commerce sites are designed for the first-time or one-time buyer rather than the repeat customer, who can get annoyed having to wade through masses of unnecessary fluff. Our site is designed to keep both sides of the spectrum happy by supplying them what they need, including the fastest possible purchasing experience, if that's what they want.

The Importance of Support

Another common customer complaint was the lack of customer support available on most e-commerce sites. Some sites let you send an e-mail, but you never get an answer. Some sites give you a number to call, but that just gets you to a machine with so many options that it takes ten minutes to get to a place where you can even leave a message – and then they don't call back.

At SJF, we have gone out of our way to provide customers with a number of ways to contact a living, breathing support person. Each page of the site clearly displays a toll-free number, a fax number, a physical address and a direct e-mail link to a real live person who will respond the same business day. The main page of the site contains a detailed support directory with phone and extension numbers, as well as direct e-mail links to qualified experts on every product and service we provide.

Our most recent support feature is an adoption of the "live chat" technology usually associated with the recreational aspects of the Internet. When customers enters the SJF "chat room," they are not looking for other customers with the same interests and hobbies. They are looking for a real time answer, from a real live support person, to a real world problem – and they get it.

Is support really that important? A 1999 Jupiter Communications study showed that a customer's need for human intervention soared from less than eight percent at minimal price levels to nearly 30 percent once the price of an item crossed the $100 mark. According to Forrester Research, over 37 percent of all online buyers – that's 4.8 million shoppers – request customer service while shopping online.

With the majority of SJF's product lines being higher ticket items, we feel that providing live online support will meet an important customer demand.

As with everything we do, this new service is undergoing a period of evaluation. It is currently available only in certain parts of the site, but we hope to see it available throughout the site.

Web site design is an ongoing process, and your competition is watching everything you do. You either lead the pack, or you're falling behind. At SJF, we try to push the envelope a little every day.

Stafford Sterner is vice president of marketing at SJF Material Handling Equipment (www.sjf.com).
In businsess for more than 20 years, SJF is a Winsted, Minnesota-based full service provider of new, used and reconditioned material handling equipment. They also provide complete design, layout, engineering, profiling, set up, installation and testing for entire facilities.

Clicks without bricks

According to some people, business-to-business ecommerce traffic will grow to over a trillion dollars annually within the next few years. There's no doubt that the figure is possible. The business is out there, and there are substantial advantages to doing business online. However, there are some disturbing trends regarding the structure and business philosophy of some e-commerce companies that may put a stop to the current love affair with the e-commerce business model.

Many business-to-business e-commerce sites simply hook up a buyer with a seller. The company running the site doesn't own the inventory it sells, nor will it stand behind the products it delivers. They are simply middlemen, helping the seller and buyer to establish contact, then taking no responsibility for the future of the relationship.

Venture capitalists and bankers seem to love this model. They see a company that can potentially generate millions of dollars in sales without incurring any costs for inventory, manufacturing, engineering, service or professionals on their staff that actually know about the product line. They see $200000 or so as buying a very impressive Web site, a fraction of the cost of building a real brick and mortar company. You can always outsource the rest, they think. But what does this mean to the buyer?

Basically, it means that the people the buyer has direct contact with - the people who run the Web site - take no responsibility for the transaction. They couldn't if they wanted to. They have no control over availability or delivery. They can't even guarantee that their suppliers will be in business tomorrow. They don't know enough about the product to offer real help when making a purchase, nor can they help with after sales service. This may not be a problem when purchasing a brand new, brand-name, off-the-shelf product like the latest CD or Windows 98, but it is a problem when purchasing complex, expensive business equipment - especially used equipment.

Recently, my company had a bad experience purchasing used computer equipment through an auction site. The site claimed they were just a third party, and ware thus not responsible for either the product or the transaction. Obviously, I will never buy anything from that site again, and make a point of telling everyone I know not to buy from them either.

The business-to-business world is different than the consumer marketplace. For one thing, business purchasers are looking for a supplier, not just a purchase. They want to establish an ongoing relationship with someone who will take responsibility for both the quality of the product and the transaction itself.

The funny thing is that these extras can provide a real profit center for the seller (instead of the overhead cost they are considered by the click and vapor companies). For example, a guy in Texas wants to buy a used forklift but doesn't know any thing about them and doesn't want to travel to Minnesota to see it for himself. I can sell it to him as is, or I can check it out myself and guarantee that it will do the job - for an additional fee. I can arrange for shipping and on-time delivery - for another additional fee. And he'll pay happily, because I am providing a real service to him.

The same holds true for services like design and equipment installation. Once you have the infrastructure in place, there are ways to make money.

For this reason, the future of business-to-business e-commerce belongs to companies who stand behind the products they sell. Because when there is brick behind the click, there is also somebody you can do business with.

Stafford G. Sterner is vice president of marketing for SJF Material Handling Inc. in Winsted, Minn.

Sales boom for family business selling new and used equipment.

Gerald Sterner started SJF Material Handling to help pay for his sons college education. They've returned the gesture by building the company into one of the country's largest suppliers of warehouse and distribution equipment.

Dick Youngblood - Sunday Business News Feature
Star Tribune Sunday, May 21, 2000 WINSTED, MINN.

-- When the Sterner brothers began taking control of SJF Material Handling Inc. in the late 1980s, the Winsted company was generating about $850,000 in annual revenue peddling used office shelving and warehouse pallet racks out of a 10,000-square-foot warehouse.

There was a logical explanation for the comparatively small size after 10 years in business: Founder Gerald Sterner, a compulsive entrepreneur who had built two manufacturing companies in Winsted, started SJF in 1979 as a sideline aimed mainly at generating a few bucks for his sons' education.

The brothers-- Stafford, now 45; Jim, 42, and Frank, 40 -- not only got themselves educated, they seem to have inherited their father's entrepreneurial disposition.

Since 1988, when they signed on with their father to win a $250,000 expansion loan, the brothers have added renovation, design and installation services and expanded their used-equipment inventory to include balers, conveyors, carousels, forklifts and loading-dock equipment. They also have become dealers for 60 different lines of new equipment ranging from carts and conveyors to ladders and lift tables to scales and shelving.

All of which makes them a one-stop shopping center for clients opening new warehouses and distribution centers. Not only can they supply the desired mix of new and used equipment, they also can design the layout and install the equipment

Rapid sales growth

The results have been eye-catching. I'm not just talking about sales that have multiplied by 22% annually or the $17 million in sales the Sterners are projecting for the current fiscal year.

No, there's also a corporate headquarters that sprawls across 15 acres on the south edge of Winsted, where long columns of racks filled with used equipment climb 20 to 30 feet into the air. That's one reason the business has not been moved closer to the Twin Cities area.

"If we had this inventory in Minneapolis, we'd be paying so much in taxes they'd have to name a couple of schools after us," cracked Stafford Sterner, who lives in Bloomington and commutes to Winsted.

By all accounts, the Sterners carry the largest collection of used equipment in the industry. "There's no doubt about it," said client Richard Iverson, a plant engineer for Minter-Weisman Co., a Plymouth wholesaler of candy, tobacco and groceries to convenience stores. "They've got to be No. 1 in the country in terms of inventory."

That's not the only reason for the growth, which has averaged 22 percent during the past five years. "When we need something for a customer, they'll bend over backwards to find it for us," said Larry Olawasky, a materials handling equipment distributor in Sioux Falls, S.D. Consequently, "we do more business with them than [with] anyone else in the industry."

The education that SJF financed for the Sterner brothers also seems to be paying off.

Web a marketing tool

Take Stafford, for example: He graduated in business management from the University of St. Thomas, which won him a job running a grain elevator in Silver Lake, Minn. More important, he fell in love with computers, acquiring one of the early Apples to track grain prices, analyze soil samples and formulate fertilizers.

The upshot: Since he launched SJF's Web site (www.sjf.com) in 1995, he's built its Web-based marketing and e-commerce to the point where 70 percent of the sales leads come off the Internet.

"How else would American Honda in New Jersey or down in Georgia know we existed out here in little Winsted?" Stafford said, referring to a pair of recent equipment sales and installation projects SJF has done for the automaker. Ditto for the prominent likes of Northwest Airlines, Steelcase, IBM and American Tourister, all of which have found the company via the Web.

Jim Sterner, with years of experience in industrial design and engineering, makes his contributions on the production side: He supervises the reprogramming and redesign of electronic controls for conveyors and other material handling equipment.

This capability "put us into the big systems, where the big dollars are," he said, adding that about 55 percent of SJF's business involves these systems.

Frank Sterner, who holds a St. Thomas degree in marketing, supervises the company's administrative functions while also managing major projects.

Father still 'invaluable'

Ah, and then there's Dad -- Gerry Sterner -- who started Sterner Lighting in 1960, took it public a year later and built the manufacturer of decorative outdoor lighting to $35 million in sales by 1985, when he sold his shares to concentrate on another of his ventures.

That was Sterner Industries Inc., a manufacturer of dairy processing equipment that he started in 1955 and grew to $6 million in sales before he was forced to sell it in 1988 to avert a shutdown. The problem: A key customer canceled an order for which Sterner Industries had invested heavily in preparation.

Unable to continue, Sterner personally guaranteed the company's bank debt and depleted most of his resources meeting the payroll for several months before the business was sold.

"If it hadn't been for Gerry, that [Sterner Industries situation] could have been a real disaster," said James Morton, president of Edina's Fidelity Bank, who approved the $250,000 expansion loan to SJF 1n 1988. "That's a big part of why they got the loan."

Gerry Sterner got into the used-equipment business in 1979 almost by accident. A businessman who owed him $2,000 offered to repay with a truckload of used pallet racks, which Sterner sold two days later for $4,000.

Despite his 69 years, he still gets a kick out of such wheeling and dealing, which is why he continues to flit around the country as an SJF consultant in charge of acquiring used equipment. It is not a figurehead position.

"He knows every player in the industry, from the reputable guys to the sharks and con artists," Stafford said. "He's invaluable."

-- Dick Youngblood can be contacted by mail at the Star Tribune, by voice mail at 612-673-4439, by fax at 612-673-7122 or by e-mail at yblood@startribune.com