FEBRUARY 2024
Rancho Mirage, CA - A robust slate of speakers provided practical, actionable ideas for attendees at the 2024 WPA Annual Meeting in Rancho Mirage. Speakers included repeat presenter Guy Gruenberg, along with Dr. Bill Bellows, Dr. Jimmy Gandhi, and Chaille Brindley of Industrial Reporting.
Guy Gruenberg: Thriving in Tough Economic Times
Guy Gruenberg of Grow Consulting returned to WPA to once again share his insights. He has previously spoken at the Annual Meeting and been featured in WPA online events. Gruenberg, formerly President & Chief Strategic Officer of Rose Pallet and a deeply experienced business consultant, offered sage advice on how businesses can thrive in the current business environment.
At the heart of Gruenberg's presentation was the crucial need for businesses to invest time in strategic planning. "The amount of time you do or don't spend on strategy significantly impacts your organization," Gruenberg emphasized, pointing out the often underestimated value of strategic foresight in business management. He sees far too many business operators working “in” the business (day-to-day operations) instead of “on” their business (strategy).
A key focus of the seminar was the importance of understanding how to cost their products accurately. Gruenberg outlined the direct costs of product costing, including materials, labor, and equipment allocation, in addition to
overhead. He urged attendees, "If you're not
already doing this, I encourage you to start - or get with me."
Highlighting the critical nature of knowing one's product cost to achieve success, he also introduced the concepts of 'True Costing' and 'Activity Based Costing' as effective methods for accurately assessing production expenses.
Gruenberg stressed the significance of Client or Customer Relationship Management (CRM) systems in tracking and nurturing customer and potential customer relationships. Drawing on a success story, he noted, "I coached a company that grew from 6 million to 30 million in revenue by effectively managing their customer relationships."
Gruenberg also highlighted the importance of SEO in enhancing a company's online visibility. "SEO is how search engines rank you, and Google will recognize you based on what you do to enhance SEO," he explained. He urged businesses to prioritize their online presence.
Gruenberg didn't shy away from critiquing the internet presence of some businesses, commenting, "Some of your websites are awful...like 1989." He advised attendees to consider upgrading their websites to better reflect their current offerings and capabilities.
He also singled out forecasting and a keeping a positive outlook as critical ingredients for business success. "It's more than just surviving," he said. "You have to have an attitude that you're not just trying to survive,"
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and a positive attitude as fundamental to fostering a productive company culture.
Navigating sources of information effectively was likened to using navigation apps, with Gruenberg revealing, "I use Waze and Google Maps...do you think they use AI? Yes, and so should you." He shared his experience with AI and its long-standing presence in technology, underlining its utility in business operations.
A SWOT analysis—identifying strengths, weaknesses, opportunities, and threats—was highlighted as a crucial business exercise. Gruenberg posited that all these elements could be seen as opportunities, emphasizing the need for strategic resilience.
He stressed the importance of being financially prudent and regularly reviewing financial statements to ensure fiscal responsibility. "Think about worst-case scenarios...how long can you go without any income?" he asked.
The Why and How of Customer Retention
Dr. Jimmy Ghandhi, Associate Dean at California State University, Northridge -- Tseng College of Graduate, International and Midcareer Education, offered invaluable insights into the often-overlooked aspects of customer retention strategies within the pallet industry. He emphasized the collaborative nature of maintaining client relationships and highlighted the importance of working within the value chain to ensure customer satisfaction and loyalty.
"So when we think of customer retention, I think the thing that we have to focus on is that it is not just an independent effort that you are doing with your customers," Ghandhi stated, noting that for a pallet company to delight customers, they require the timely support of their own suppliers and service providers. He urged businesses to adopt a more inclusive approach by collaborating with others in their value chain. This perspective challenges the traditional view of customer retention as a one-on-one effort between a business and its clients.
Ghandhi further emphasized the critical role of clear communication. "Keeping the customer involved and aware of reasons behind cost increases can make a significant difference in how well you can retain your customers," he explained. This approach helps manage expectations and maintain transparency, which are key to building trust and loyalty.
One of the challenges highlighted during his talk was the struggle startups, small businesses, and leanly run companies face in maintaining open lines of communication with their customers due to a lack of dedicated resources. "A lack of clear communication has been a challenge for customer retention," he observed. He underscored the importance of finding efficient ways to stay in touch with clients even when resources are stretched thin.
Highlighting the economic rationale behind customer retention, Ghandhi shared that acquiring a new customer is six to seven times more expensive than retaining an existing one. A satisfied customer base is more likely to accept price increases and cooperate with the company, underscoring the value of established relationships over the pursuit of new clients.
Dr. Ghandhi also touched on the significance of understanding why customers might choose to leave for another supplier, advocating for efforts to seek feedback even when customers are not forthcoming. "It is important to find out why a customer is moving to another supplier and not giving you a repeat order," he said, highlighting this as a crucial element in continuous improvement and customer retention efforts.
Concluding his address, Ghandhi called for a systems perspective on customer retention, emphasizing it as an iterative process that requires continuous effort and engagement.
Discovering Secret Barriers to Teamwork
Some WPA members will be familiar with Dr. Bill Bellows, a previous online webinar presenter for the association. He delivered a thought-provoking speech that captured the audience's attention with humor, insightful analogies, and critical observations about organizational behavior and teamwork. Starting with a light-hearted question, "So how many companies are involved in the design and manufacture of rocket engines?" Bellows set the stage for a deeper exploration into the essence of teamwork and the often reactive nature of corporate strategies.
Bellows, who has an extensive background with Rocketdyne before its acquisition by Boeing, shared his observations about the corporate world's tendency to focus solely on problems. "Why is that the case?" he pondered, drawing an analogy to the behavior of only refueling a car when it's completely out of gas. He highlighted a prevalent issue in many organizations: the need for a preventative mindset.
Bellows critiqued the black-and-white thinking that dominates quality assessments within organizations, where actions and results are often judged in isolation without considering broader implications. He pointed out, "So in baseball, the quality system in baseball is looking at every single pitch and asking, 'is it a ball or is it a strike?' That's the way most companies look at quality; they look at something and say it's good or it's bad, it's working or it's not. It’s black-and-white thinking."
Drawing from the philosophy of Genichi Taguchi, a Japanese engineer and statistician, Bellows emphasized that quality should be measured by the minimum loss experienced by society after a product's shipment. With this approach, companies must adopt a more holistic view of their actions and decisions.
Perhaps the most poignant moment of his address came when Bellows shared a simple yet powerful example of true teamwork: picking up a nail in a parking lot. This act, he noted, holds no immediate value to the person who picks it up but represents a significant gesture of preventative care for others, potentially saving someone from the inconvenience of a flat tire. "That's teamwork," he emphasized, suggesting that while individuals often enter organizations with a genuine teamwork attitude, this spirit can diminish over time.
Dr. Bellows' speech called for more effective teamwork and critiqued business culture's reactive tendencies. By advocating for a proactive, inclusive, and thoughtful approach to quality and organizational behavior, Bellows challenged attendees to rethink their strategies and foster environments where true teamwork thrives.
Adapting to Upside Down Markets
A perennial favorite among WPA speakers, Chaille Brindley of Industrial Reporting delivered a comprehensive speech titled "Upside Down, Rightside Up Markets," addressing the dynamic changes within the U.S. pallet sector. From technological advancements to evolving market demands and the critical nature of labor costs, Brindley's presentation offered a roadmap for pallet companies navigating the complexities of today's economic environment.
Brindley began by highlighting the unprecedented labor cost increases within the pallet industry, a trend uncovered through Industrial Reporting's recent HR surveys. "The basic labor rate in the pallet industry had gone up 30.89% since our last survey... That's the largest increase we've ever seen in the history of our survey," Brindley noted, emphasizing the significant impact this will have on the industry moving forward.
Brindley shared an outlook on the current recession, suggesting a potential extension beyond early 2024 but maintaining optimism for the industry's long-term resilience. "There's a lot of factors that are going to take place," Brindley reflected, acknowledging the uncertainty in predicting economic recoveries.
Brindley discussed the implications of automation trends on the pallet industry. Despite popular belief, he pointed out that "80% of warehouses still lack automation at this time," signaling a vast potential for growth in this area. While growth in areas such as mobile robots for order picking will not significantly impact pallet selection, other areas of automation, such as automated storage and retrieval systems and autonomous forklifts, will.
Brindley predicted a rapid increase in automation adoption, emphasizing its impact on pallet quality requirements. "As there's more automation going on in these warehouses, they are going to need higher quality pallets," he asserted.
Brindley also touched on the evolving landscape of pallet inspection technologies, noting that large distribution centers, rather than pallet companies, are leading the charge in adopting these systems. This trend indicates a growing focus on pallet quality, driven by large and potentially smaller distribution centers. "I think you're going to see more focus on that," Brindley said. He also touched on ERP systems and AI. Brindley stressed the importance of integrating ERPs at the operator level to enhance efficiency and data management across operations. Moreover, he debunked common misconceptions about AI, clarifying its role in strategic decision-making rather than physical manufacturing processes.
“One of the things that a lot of people have talked about is this buzzword AI,” he said. “Let me be completely honest with you, AI will never make a pallet for you. It's never going to recycle a pallet. It's never going to cut a board. That's not what it does. What AI does is it helps you particularly with office things that you need some strategic help with.”
He stressed that data management will be increasingly important and that pallet companies should be monitoring it. “If you don't have someone in your business who is responsible for data management and for your data strategy, you need to get that person. It may be a new hire, or maybe a salesperson or an operational person…I don't care how big or small you are, you need someone who's really focusing on data analytics, numbers, ERP, any and all of that. They need to be resourced enough so that they can do their job well, because I think in the market that's coming, that is going to be critical.”
Brindley's insights extended to legislative impacts, specifically mentioning California Bill AB 1760, which affects the management of proprietary pallets. He emphasized the need for fairness and respect among rental companies and recyclers alike and the critical role of recyclers in ensuring the return of proprietary pallets.
“I'm not taking sides on this,” he said. “I have written great things about PECO and CHEP and recyclers and all of it, I just want everyone to play fair and respect each other to be fair competitors. And at the end for recyclers to be paid what they're worth.”
Concluding his speech, Brindley offered advice for navigating the current economic downturn, emphasizing cash flow management, strategic investments in technology, and the importance of positioning for an eventual market upswing. "A downturn is a perfect time to position your company to be ready for the upswing," Brindley advised.
“If one or two pieces of machinery are going to position you for where you need to be in the future, what are you waiting for?” he said, noting that once the market starts to rebound, you might be a year out on machinery delivery, and as a result, you won’t be ready to prosper from the upturn. He encouraged attendees to look beyond immediate challenges and prepare for future opportunities.
Dr. Bellows and Gruenberg also offered more in-depth sessions on their topics during breakout groups. All in all, speakers provided useful and actionable insights to help attendees profitably navigate their companies into the future.
Annual Meeting Speakers: Insights on Winning Customer Retention, Teamwork, Technology, and Strategy