What makes a product successful? What should be the response to rapid growth in Eastern Europe and China? And how important is the design of a lift truck?
These and other questions were put to Kenneth Dufford, Managing Director European Operations, by Michael Weilacher, Editor-in-Chief of the German ‘Logistik Journal’. The interview appeared in the magazine’s October issue.
Logistik Journal: Mr. Dufford, Crown trucks stand not only for high productivity but also outstanding design. This level of quality comes at a price. How do you convince potential customers to opt for Crown as opposed to any other supplier who may seem cheaper at first sight?
Kenneth Dufford: Our first challenge is to minimise the price gap between our products and those from the so-called ‘less expensive’ suppliers. We put a lot of effort into our design, engineering and manufacturing processes to address this challenge. Crown trucks have a high level of in-house manufactured components which allows us to control the design, quality and cost of each element. Through these methods we are able to keep the integrity of our products at a very high standard – continuing to use steel covers as opposed to plastic, for example – which contributes to our customers’ bottom line through lower cost of ownership over the life of the equipment.
Convincing potential customers in today’s information age is easier than in the past and we provide many ways to monitor and guarantee total cost of ownership to our customers. Our product philosophy is particularly easy to get across to customers who are interested in long-term value and cost. The ultimate proof that our philosophy works in terms of product design and manufacture, is the extremely high percentage of repeat business we enjoy from our customers.
Logistik Journal: In China we assume that Crown is marketed as Crown, i.e. as a high-quality manufacturer. Western companies with operations in China will, of course, favour your product. But what type of product are you offering the Chinese market you need to conquer? After all, you’ve had your own facility there since 2006.
Kenneth Dufford: The material handling market in China is still in the early stages of development but we believe there is, and will continue to be, a large enough potential for Crown products. Of course there are market differences which need to be addressed but our core philosophy in terms of product integrity will not change.
Logistik Journal: How do you rate the Chinese-produced products in your market sector? Do they represent a serious competitive challenge to your trucks?
Kenneth Dufford: We view every competitor seriously. The challenges for Chinese manufacturers will be the same as for any manufacturer wanting to do business in Europe. The product has to conform to market requirements, and credible distribution and support systems must be established and maintained at a very high level. With the Chinese getting into the game relatively late in a highly developed market, it is a great challenge to become a significant supplier to the region but they certainly should not be counted out.
Logistik Journal: While everyone is looking towards China, the Indian economy is also gaining strength. What are the prospects for your products on the sub-continent?
Kenneth Dufford: The government is making it easier to do business there every day. There is a lot of movement with regard to deregulating the retail business trade and this should lead to opportunities for suppliers such as ourselves, companies within India willing to invest in this phenomenal growth potential area as well the general Indian populace itself. All of this leads to a growing market for lift trucks in general and Crown has already been successful in securing a healthy portion of this potential.
Logistik Journal: The forklift truck and storage system sector is particularly excited right now about the rapid growth in Eastern Europe. The race is on for the highest market share. What is Crown doing, Mr. Dufford, to enhance its prospects in and around Russia?
Kenneth Dufford: Fortunately, we recognised the potential in this area some years back and started to explore the possibilities then – probably before many of our competitors. Consequently, we now have a strong and ever-strengthening distribution presence, and we continue to benefit from the growth in this area.
Logistik Journal: Three German forklift truck / storage system manufacturers are claiming market leadership regarding technology. Where does Crown stand on this?
Kenneth Dufford: Technology can mean many different things to many different people so to stake a leadership claim is a bit presumptuous in my opinion. Crown employs technology and great innovation in our products. Some recent examples of this include the MoveControl™ Seat on our award winning TSP 6000 turret order picker series; our Access 1 2 3™ control and diagnostic system employed on many of our current truck models, and InfoLink™ – an exclusive web-based fleet management system. InfoLink improves fleet performance by monitoring and then communicating information in the areas of truck utilisation and operator performance, instant impact reporting, real time truck localisation and reduced maintenance through optimised scheduling.
Our position is to use technology appropriately and, more importantly, to provide innovative solutions, whether technologically oriented or not, which provide reliable value to our customers. We let the customers judge and this approach has worked for us.
Logistik Journal: What do you think the future holds for forklift truck and storage system manufacturers? Do you think there will be further consolidation of companies in the medium term?
Kenneth Dufford: As with most industries over the past decade or so, there has been a tremendous amount of consolidation. There seems to be room for more of this type of activity but probably not at the past rate. At the same time, there are newcomers into the Top 25 – 30 ranked suppliers and this only proves that as long as there is a need, someone will be willing to invest in a product or service to fulfill that need.
Logistik Journal: European lift truck manufacturers with an eye to the American market are talking of stagnation, if not decline. What is the situation for you as an American supplier?
Kenneth Dufford: After a very high growth period, there typically is somewhat of a slowdown which is what the US market seems to be experiencing. We feel this is a cyclical as opposed to a fundamental problem though. While the US is an important market for Crown, being globally oriented helps us balance regional slowdowns such as the current US situation. To answer your question, we are very comfortable with our current results.
Logistik Journal: Crown is now run by the fourth generation of its founders. Despite its size it is therefore a family business in the true sense of the word. What advantages does this structure have over a PLC for example?
Kenneth Dufford: As evidenced by our successes to date, our shareholders make good, solid decisions – particularly the choices made concerning management appointments. While they are very focused, involved and a vital part of the major decision-making processes within the company, our shareholders are very good at letting, and expecting, management to manage.
Crown’s situation is that we have shareholders who are passionate and knowledgeable about our business and motivated managers who are able to propose long-term ideas without being under constant short-term profit pressures from potentially fickle shareholders with little knowledge of the operational detail. Of course we are in business to earn a profit, however, our first task as managers is not to manage the bottom line but to manage processes and deliver solutions which bring added value and satisfaction to our customers. We, in turn, inevitably will profit from this as well. Our most important goal is quality which, naturally, results in long-term investment in design, manufacturing and support strategies. This is driven from the top under the premise that if we deliver the customer superior value, the bottom line will take care of itself over time. It is a win situation – both for the customer and for Crown.
Logistik Journal: Finally, let’s talk again about the design of your trucks. Crown won five major awards for the TSP 6000 turret order picker alone. Is good design as important to the user as to the design experts?
Kenneth Dufford: Good design is certainly more than meets the eye. Good design simplifies the operator’s task at hand, reduces maintenance, increases efficiency and contributes to quality of life and industrial advancement in general.
Our design development focuses entirely on the customers’ processes and how we can make them more efficient. This entails studying postural positioning in order to place truck/operator interfaces in the most ergonomically efficient manner possible, as well as choosing the best materials to cut back on efficiency-reducing damage and wear to components. These are two small examples of what is the very complex and in-depth field of design.
Our design model has three levels of deliverables. 1. Give customers the basics they require. 2. Solve their current process and product problems. 3. Give them something positive which they do not expect. The fulfilling of this process, especially points 2 and 3, is the reason we have been recognised with so many design awards throughout the years.
At the very least a well-designed product certainly looks good. If I cannot get you to buy into any of the above explanation, I ask this question. ‘As a lift truck operator, would you be more motivated, and hence more productive, driving a truck that looks good or one that doesn’t?’ (smiles)
Crown Equipment Corporation is one of the world’s largest manufacturers of electric lift trucks. Since the company first started building materials handling equipment in the 1950s, Crown products have won numerous industry accolades. From the smallest pallet trucks through to the largest VNA trucks, Crown uses leading-edge design, innovative engineering and high-quality manufacturing techniques to respond to the full range of customer needs, achieving exceptional standards of reliability and productivity.
Crown has a unique corporate structure, characterised by the highest levels of vertical integration in the industry. This enables the company to keep tight control of development, production and customer support. Up to 85 percent of the components used in Crown products are developed and manufactured by Crown in custom-built facilities. Crown is committed to offering customers superior value that reduces TCO (Total Cost of Ownership).
Crown Equipment Corporation is a family-owned business with head offices in the USA, Australia and Germany. Crown now operates a global distribution and service network with more than 70 fully-owned subsidiaries and over 300 independent dealerships.