CEDMag.com - March 2011 Articles
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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CEDMag.com - March 2011 Articles

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Contact Kim Phelan at (800) 388-0650 ext. 340.


MARCH 2011
  • How to Invest While Owning a Cyclical Business
    Money
    By Jonathan T. Vree
    Create a diversified portfolio that addresses your responses to four essential questions.
    It's been a tough few years for the American economy, and for the cyclical business owner it has probably been even tougher. In the construction business, for example, we've seen total construction spending fall by more than 20 percent in the last three years, after having doubled over the previous 10. Overall profits have shown even more dramatic swings, and many businesses have been forced to operate in the red for some period of time.

    The difficult business environment has also coincided with a wild ride for the overall stock market. From the high in 2007 through the end of 2010, the S&P 500 fell by 58 percent, rose by 89 percent, and left the market with an overall return of down 20 percent. Investing in a volatile stock market while having large changes in income can create a specific set of problems for a cyclical business owner. What should the owner do?
    [ read more ]
  • Of Course There Are Conflicts in Service
    Managemant
    By Steve Uible
    Before we begin this discussion about conflicts in the service department, just think about this for a minute: The typical service manager takes a lot of calls every day from people who almost always have a problem.
    Before we begin this discussion about conflicts in the service department, just think about this for a minute: The typical service manager takes a lot of calls every day from people who almost always have a problem.
    [ read more ]
  • Dealers' Product Preview to CONEXPO-CON/AGG 2011
    From the Cover
    Find Who's Looking for You: March 22-26, Las Vegas Convention Center
    With just a few weeks to go before dealers and their customers board their Vegas-bound planes heading for one of the greatest equipment shows on Earth, CED magazine presents a glimpse at exhibiting manufacturers that are looking for North American dealers this year.
    [ read more ]
  • Denny Does DCCM
    By Denny Vander Molen
    AED's former chairman shares his experiences, from culture to construction, driving to distribution, and history to highrises.
    Adventure in travel is without a doubt one of finer things in life. Our family has been to some very interesting places over the past decade, thanks in part to my involvement with the AED board and executive committee. Traveling as the chairman of the board for our association last year was something I was expecting to do periodically, but due to our industry challenges, most of that was put on hold. Those challenges locally gave us good reason to stay at home and take care of business, and keep the spending to a minimum.

    Imagine the surprise when I was invited to attend the 8th annual construction distribution event in Wuhan, China. I had never heard of Wuhan, nor was China on our bucket list, at least in the short term. As an ambassador from the U.S. and AED, as well as our own business, I was to give an address to the DCCM attendees. The days following were busy as I adjusted family and work plans to make this trip an adventure to remember.
    [ read more ]
  • Spend Your Energy On Solutions!
    From the Chairman
    By Dennis Kruepke
    It's easy to fall in a rut; climb out for improved success.
    For many of us, it's too early to tell what kind of a year 2011 will be. Over the past few months we have heard and seen many positive and some negative indicators. Those who think with a glass-half-full attitude have indicated that we found the bottom of this cyclical market and things are beginning to improve. Those who think with a glass-half-empty attitude indicate that the worst is yet to come. I'm not going to get caught up drinking the Kool-Aid from either of these glasses – my time and energy are best spent finding solutions to improve my business no matter what the market will bring.

    I think I am getting better at using my energy in positive ways. Based on the many challenges over recent years, I devote much passion and energy to finding solutions and accomplishing productive plans. Comparing ourselves to a top-performing athlete, no matter how good you may be, we have only so much energy to burn. Training and experience help, but sooner or later the energy drain can have a negative effect on how I perform.
    [ read more ]
  • The Writing is on the Wall - Read It or Leave It
    Editor's Note
    By Kim Phelan
    Future recessions, plus inflation and higher interest rates in the near term are forecast by respected trend-man Beaulieu.
    As much as we probably think we'd like to know the future, aren't you kind of glad, deep down, that we don't? Seems to me the present gives us quite enough to deal with, without the burden of seeing - with any real clarity - what lies ahead. And can you imagine the murderous mayhem the world would experience if a legitimate future-revealing technology came into the marketplace?

    Frightening as that would be, we nevertheless crave knowledge of the future - and from a business perspective, who can blame us? To satisfy that longing, AED invited one of the most historically accurate economists of our time to give his assessment and forecast of things to come during the Summit 2011 in Orlando. On Jan. 27, Alan Beaulieu, co-principal of Industrial Trend Research, gave the AED members in attendance a number of messages about the future - not by use of crystals or cards, but by a methodology of painstaking, meticulous trending of rates of change on various metrics and elements in the economy. Alan believes, as most of us do, that uncertainty is our enemy; therefore, the more factors we watch and (correctly) interpret, the better prepared we are to anticipate and thus plan for change, rather than fall prey to it.
    [ read more ]
  • The Debate of Our Lifetimes
    President's Message
    By Toby Mack
    The construction equipment industry is at risk of becoming collateral damage, while a budget-cutting Congress squares off with a suddenly pro-infrastructure administration.
    As I write this, Congress and the administration are locked in a largely but not entirely partisan battle over spending cuts and investment priorities. We at AED find ourselves in the uncomfortable and somewhat unfamiliar situation where some of our best friends on one set of AED's priority issues may be our biggest opponents on another.
    [ read more ]
  • Things Are Looking Up - Now Keep It That Way
    On the Numbers
    By Garry Bartecki
    With a 90-minute investment of time, your company can secure AED profit-focused data to grow ROA, guard cash flow.
    The Annual Summit in Orlando was spectacular! The facility was great. The food was great. The program was great. The networking was great. And hey, it wasn't snowing, so that was great, too. From what we hear, everybody enjoyed the experience while at the same time apparently feeling better about the industry. Not a bad way to start 2011.

    If you have been an AED member for a while, you know what comes next after Summit – that's right, it's CODB time. And if you not participated in the past it is time you started. If you have not participated in the past, you have left money on the table. If you have not participated in the past, you missed out comparing some significant KPIs against your peers to see where you need to make adjustments.
    [ read more ]
  • More Signs of Recovery for Construction Equipment Demand
    Business Outlook
    By Eli Lustgarten
    The trend of rising prices, though detrimental to immediate contractor profitability, may spark 2011 purchasing activity.
    The U.S. economy is looking somewhat better in early 2011. The most recent economic data shows that the strengthening of the economy in the fourth quarter of 2010, led somewhat by consumer spending, has continued into the first part of the new year. Further, manufacturing activity has strengthened, with the ISM reporting strong new orders and production and the PMI surging to 60.8 in January, the highest level since May 2004.

    Unfortunately, construction activity still remains the most challenged sector within the U.S. economy. Housing activity continues to remain muted and the recent rise of mortgage rates to over 5 percent is not helping the meager recovery underway. The National Association of Home Builders has further reduced its 2011 housing start outlook to 688,000 (from 739,000) though still about 17 percent above the preliminary 586,000 in 2010. Improving global economic activity continues to place pressure on input costs to the construction sector. Prices are rising for most commodities, including copper, diesel fuel, steel and components such as concrete reinforcing bars and structural products, which is placing further pressure on contractor profitability and a major headwind to the recovery of nonresidential activity.
    [ read more ]
  • For Lead Times, Break Out of Conventional Thinking
    Aftermarket
    By Ron Slee
    Get out of the rut and structure lead times by individual parts, not by vendors.
    A long time ago, I started in this industry with a one-year contract to find and fix a problem with an inventory control application. It was exciting work for me as I got to learn at the feet of a very intelligent and experienced man named David Steele. We were using a forecasting model based on exponential smoothing, which was a statistical forecasting model. Robert G. Brown was the author of most of the inventory control theory in those days and was employed by IBM to assist them with their PIC and MAPICS products. Inventory control was, as far as the computer systems were concerned, complicated and heavily laced with mathematics. Contrast that to the Kardex systems that were being replaced. Quite a difference, and as you might have predicted, the computer systems were not well received.
    [ read more ]
  • The View from Parliament Hill
    Washington Insider
    By Christian Klein
    AED begins early steps toward developing a member-driven Government Affairs program for Canada.
    Over the last decade, public policy advocacy in Washington, D.C., has become a major part of the AED value proposition for our U.S. members. We've scored victories on a number of issues that affect our members' markets and costs of doing business: Infrastructure funding, capital investment incentives, preventing government competition and rental preferences, fighting the gray market, and more.

    Last January, AED and the Canadian Association of Equipment Distributors (CAED) agreed to integrate their operations under AED management and CAED closed its offices. As the association looks to become more involved north of the border, AED is determining how to position itself in Ottawa and provincial capitals, and identifying what policy outcomes are going to help our Canadian members be more profitable.
    [ read more ]
  • Are Your Financial Results Lonely?
    Inside AED
    Your business doesn't operate on a deserted island; neither should your data. Only AED's CODB industry data can give you the comparison results you need.
    Financial data by itself is not enough to evaluate your performance. No company operates in isolation. The performance of a company is greatly impacted by industry events. You earned a profit this year and you are happy, but how are you really doing? If your profit margin was 5 percent and the industry average is 10 percent, would you still like your results?

    AED's Cost of Doing Business (CODB) report, compiled by the Profit Planning Group, is the only way equipment dealers can get comparative data to find out how they measure up to the competition – not just your own dealer group, but competitive dealers both across town and across the nation. To forego this data is to look at your company only within the context of its own little world.

    "The AED CODB report is undoubtedly one of the most valuable tools AED provides," said Garry Bartecki, AED's vice president of Finance.
    [ read more ]
  • Going, Going, Gone!
    Groundwork
    Live Auction raises more than $40,000 for The AED Foundation
    Bidding was fast and furious at The AED Foundation's 2011 Live Auction benefit co-sponsored by Ritchie Bros. Auctioneers at Summit in Orlando. And when it was over, more than $40,000 was raised for The Foundation's workforce development initiative.
    [ read more ]
  • MacAllister Machinery Purchases Michigan Cat
    Industry Beat
    Michigan Cat branding to remain intact.
    Indiana-based, MacAllister Machinery Co. Inc. has purchased Michigan Tractor and Machinery, commonly known has Michigan CAT.
    [ read more ]
  • CEO Hits the Road
    Best Practices
    By Joanne Costin
    Mike Soley, Jr.'s quarterly trek to meet with branch employees delivers impressive results.
    Unlike the popular CBS TV show, Undercover Boss, there's nothing disguised or sneaky when Mike Soley Jr., president and CEO of Miller- Bradford & Risberg (MBR), hits the road to meet with all his branch employees to discuss company metrics. The meetings have taken place like clockwork every quarter for the past three years, and employees know just what to expect. And whereas these visits may lack the drama of the reality series that follows CEOs who go undercover at their own company, Soley's results are nonetheless impressive.
    [ read more ]
  • Volvo Introduces a New Generation of Wheel Loaders
    New & Improved
    Technology advances throughout produce stronger, more fuel efficient T-4 machines.
    The new Volvo G-Series next generation wheel loaders incorporate technology for productivity and efficiency while ensuring ease of operation and maintenance. The Volvo L150G has a breakout force of 45,187 pounds and a bucket capacity of 5.2 cubic yards. The Volvo L180G has a breakout force of 50,537 pounds and a bucket capacity of 6.3 cubic yards. The Volvo L220G has a breakout force of 51,301 pounds and a bucket capacity of 7.3 cubic yards. These forces are all generated from Volvo's new rehandling buckets, specifically designed for easier pile penetration to increase fuel efficiency and performance.
    [ read more ]
  • New Construction Starts in December Jump 19 Percent
    Dealer Data
    Annual total for 2010 slips 2 percent to $412 billion.
    New York, N.Y. - January 21, 2011 - New construction starts in December climbed 19 percent to a seasonally adjusted annual rate of $450.2 billion, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. Nonresidential building rebounded after a weak November, and nonbuilding construction was lifted by the start of several large electric utility projects. Meanwhile, residential building in December showed slight growth, continuing the gradual upward trend of recent months. For 2010 as a whole, total construction starts dropped 2 percent to $412.5 billion, a less severe decline than the 24 percent plunge for 2009.
    [ read more ]
  • Enabling Business Transformation with ERP
    Technology
    By Mark T. Schloegel
    Part three of a CED-exclusive four-part series
    Prior articles introduced a structured approach for preparation, scoping and planning for business transformation initiatives. This article focuses on development and implementation activities. Armed with your project charter, executive sponsorship and a capable team, you are ready to launch into the "heavy lifting" work.

    Phases 3 and 4, as illustrated in Figure 1, are frequently the most challenging for business transformation teams and business partners.

    The "Develop, Configure, Test" phase of work focuses on preparing people and business systems for change. New members will be added to the team to help design and validate the improved policy, process, systems and organizational accountabilities that will soon be implemented. The "Implement" phase focuses on transitioning employees, policy, business process, information systems and data to the new and improved way of conducting business.

    Some business leaders have likened the work in these phases to driving synergy from a merger. For example, many activities leading up to implementation are akin to activities required to integrate an acquired company, adopt "best practices" and new ways of conducting business, expand a service offering, or reshape supply chain relationships.
    [ read more ]
  • Something's Up Down on the Farm
    Equipment Application
    An unexpected construction equipment customer finds numerous applications for JLG boom lift in his agricultural setting.
    Boom lifts have been used for many years on jobsites and other areas to access tall buildings or other structures for construction and maintenance applications. They're the preferred choice of contractors for reaching overhead areas quickly and easily, and they're safer than using ladders and some other means of accessing work at height. Now the boom lift has found a new application: Farm work.
    [ read more ]