The indirect advantage
June 1st 2008

The Barloworld Hyster relationship is one of the most enduring in the materials handling industry. Charlotte Stonestreet spoke to Barloworld Handling's managing director in the UK, Geoff Tucker, about how the two organisations work together and the advantages of buying lift trucks though a nationwide dealer

When you think of perfect partners what is it that springs to mind? Fred Astaire and Ginger Rogers? Bacon and eggs? Saatchi and Saatchi? The list could go on and on, however, try and think of successful long term partnerships in the materials handling world and there is only one that stands out – Barloworld and Hyster. In an industry that is constantly undergoing acquisition and consolidation, the fact that Barloworld has been sole Hyster dealer in the UK for over 50 years is of real note.

After 26 years with Barloworld in South Africa, Geoff Tucker has now taken on the role of Managing Director of Barloworld Handling here in the UK – and it is a challenge that he is clearly relishing! "The UK market for lift trucks is very challenging," says Tucker. "It's big and resilient, but also a bit crazy! I have a feeling that not many of the major players are making any money here! The guys that are coming direct to market obviously have a big turnover – and turnover is great, just as long as it leads to profit. This is a capitalist society and as a company you have to make profit."

Dealer advantage According to Tucker, being a dealer gives Barloworld distinct advantage over manufacturers that take their product straight to the market place. "All the manufacturers worry about is putting volume through their factories, so it becomes vital to them to keep market share and, as a result, the delivery to the customer can suffer.

"At Barloworld we do not have this kind of pressure. There's no pushing as many trucks on the customers as possible to keep our factories going, which means we are always in a position to offer the best solution." Although the Barloworld Hyster partnership has a long history, ensuring the continued success of the association requires constant input from both sides. Each year the two organisations agree all their main objectives on a 'balanced score card'. This covers all areas of business, from finance to customer service, from admin to environmental issues and is reviewed and updated on a quarterly basis. Add to this the weekly meetings and the way in which members of staff from the two organisations work alongside each other on a daily basis and you can see how the partnership maintains its strong lines of communication.

Thanks partly to its size, Barloworld, which also represents Hyster in the south eastern USA, Holland, Belgium and Southern Africa (South Africa, Namibia, Botswana, Zambia, Angola and Mozambique), is in a very strong position to feed information from the market back to Hyster. Barloworld has carried out business strategy projects using Six Sigma methods, looking at areas such as how to maintain trucks more cost effectively and get more up time for the customer. This information has then been fed to Hyster, highlighting factors like the importance of truck reliability in the 4th, 5th and 6th year.

In a market that has seen its products increasingly treated as a commodity, Tucker feels that Barloworld's position as a dealer enables it to move away from this stance and add real value for the end user, something that is vital when competing with the manufacturers that go direct to market.

"A lift truck, unfortunately, in this country has become a commodity and I think this happened long before the Chinese came into the market in a big way," he says. "But at Barloworld it's not a commodity to us.

"Essentially a lift truck is a grudge purchase – people have got to have it to keep their factory going, to keep their transport going, to distribute their product.

There's been much talk about substituting it with something else, but I've never seen anything else that works in place of a lift truck.

"At Barloworld we like to think that we can actually add value through a total solution.

We look at each application, each environment, to see how we can cut the customers' costs and help improve the way he does things. In this way we try and get away from the lift truck as a commodity."

Optimum solution Of course this approach is going to benefit the larger user, but as Tucker points out, it's not just the sites with hundreds of units that need to have the optimum solution.

"Often it's the guy with a handful of trucks that really needs the attention. He doesn't necessarily need to buy or rent a new machine – he needs to have someone there who can look at what he's doing, see what is really required, and give him the right piece of equipment new, used or rental for the job and train his drivers.

"Unfortunately many of the single users believe that they can only afford the Chinese or Korean alternative – whereas in reality they'd be significantly better off coming to someone like ourselves, with our huge short term fleets and quality second hand programme. But lots of people miss this and either end up buying a terrible second hand machine with no back up at all, or buying an inferior machine with no warranty – and there's nothing more painful than a lift truck that doesn't work and costs you lots of money!"

Full range Hyster is a full range supplier with a complete compliment of warehouse equipment, as well as IC trucks right from container handlers at the top end, down to the "dinky toys" as Tucker, an ex-Caterpillar earth moving truck man, refers to them – but it is in the most arduous applications that the Barloworld Hyster partnership has become the most relied upon.

"Strong dealers and tough trucks is really what we're about," says Tucker. "We tend to be the people that go into the roughest applications. It's here that customers really trust us because we have the ability to maintain the truck and Hyster has the ability to build a strong truck. A Hyster truck tends to outlast any other truck – in really tough applications a Hyster will be there and so will Barloworld – that's why we operate a truck dealership in Siberia!" The inherent durability and reliability of the Hyster product is of great benefit to Barloworld, particularly when it comes to all the large numbers of trucks that are currently on contract hire. Not only does it mean that servicing and maintenance costs are kept to a minimum for Barloworld and the end user (who also gets maximum up time), it also means that when the unit reaches the end of its contract, Barloworld is left with an asset that still holds value as a second hand unit.

"The second hand market is vital to us," says Tucker. "It accounts for roughly 50% of our equipment sales business – once a piece of equipment comes off contract, we've got to sell it otherwise it ends up in the yard! So we give it as much attention as we give new.

"It's very important that we don't just push a pre-used machine out, but that we provide a warranty and sell it with a proper service and maintenance contract. And it's a great profit opportunity for us that is enhanced by the fact that we are not the manufacturer."

Each year Barloworld has around 3000 trucks coming off contract, most of which will undergo some level of refurbishment at Barloworld's centre of excellence for used trucks in Warrington, before being re-let, becoming part of a short term hire fleet, or being sold. Each truck that comes out of Warrington automatically comes certified with a Thorough Examination Certificate.

Service & maintenance Like any company successfully operating in the forklift market, the provision of service and maintenance contracts forms a fundamental part of business for Barloworld.

As a dealer in competition with manufacturers that go direct to market, Barloworld has to ensure it constantly adds value for its customers and service excellence is one way it achieves this.

"The sale of the service contract is vital today and most customers can see that – they can't survive without at least basic support for their trucks," says Tucker. "There are a lot of companies out there that have different levels of service in different parts of the country. As Barloworld is national, we give the same high levels of service throughout the country – the same contracts, the same standards, whether you've got 200 machines operating on your site or a single unit."

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