[WRE | SPOTLIGHT]
What happens with a lot of these consolidations, as Buschmann sees it, is that second-level management is given the task to run the business, or an outside “non-rigging professional” is being transplanted into the company. In both cases, he says, the former entrepreneurial style of management is being replaced by an administrative style. “In general, family-run businesses do fi nancial decisions based on very diff erent business markers. Long-term strategies are important, and investment decisions are done on the premise of a deep knowledge of the market and where it will move in the future—both of which can rarely be debated with a ‘fi nance guru,’ whose fi rst question is to demand a ROE (Return of Equity) calculation for the next eighteen months. Our industry does not work like this.
“On the other hand, there are cases where privately owned rigging companies have bought other rigging companies and merged them into a larger entity. T e original owner and management is still in place, and the decisions are still being done based on an in-depth knowledge of the market—and not based on statistics and the usual bean-counter approach. T ese companies will have a great future ahead of them.”
“TRADITIONAL SLING SHOPS, REGARDLESS OF SIZE, NEED TO
COMPETE ON SERVICE, KNOWLEDGE, TECHNICAL INNOVATION, AND PROBLEM SOLVING …”
T e amount of distributors today, compared to years past, has certainly increased—which also aff ects pricing and services. Buschmann has noticed that the wire rope industry is seeing increased competition from large industrial supply companies, as well, and this is probably the bigger concern. “Like Acklands-Grainger® and Fastenal®, for example,” he explains. “T ey capture the market by promoting themselves as ‘single-source’ suppliers to our customers—by promising to supply exactly the same materials ‘…as you get now from your local supplier.’” But he says there’s a big diff erence in what they say and what they do. “First, they take away your customer; then they come and ask you to supply the same products you previously sold directly to them, of course for a lower price. T en they look at what you supply and source it from lower, mainly import, sources, and step by step, replace all of your supplied products.”
Buschmann describes industrial supply houses that are full of rigging-related imports waiting to be shipped—with fi nancial and organizational resources that even the largest company in the lifting and rigging industry can only dream of. His advice: “Traditional
Buschmann emphasizes that even the largest of sling shops is still a small business in the big picture.
sling shops, regardless of size, will not be able to compete on price with them. T ey need to compete on service, knowledge, technical innovation, and problem solving—all key areas where the large, single-source suppliers have their weaknesses.”
In terms of imported products within the domestic market, Buschmann has observed a steady decrease in the willingness of companies to pay higher prices for the perception of better quality domestic products. “Look at the tie-down industry. Twenty-fi ve years ago, tie-downs and hardware were mainly made domestically. Today, nearly all products are made in China—and the world as we know it did not come to a standstill because Chinese-made tie-downs ‘always break or are bad quality.’” He predicts that the industry is approaching the end of a learning curve on this subject, especially in North America. “T is marketing concept called ‘Made in the USA’ may continue to work for a while longer in the U.S., but looking to Europe, this has almost completely faded away. T e European market today has a much higher infi ltration of rigging related imports than North America.”
Regardless, as the industry continues to evolve, and companies endeavor to off er more comprehensive services and products to compete with the competition, one standard remains constant—safety. Buschmann easily agrees, “T e demand to supply ‘engineered’ solutions has dramatically increased. Lifts are becoming heavier and more complex. T e focus on safety and risk assessment has become a central issue. It is essential that safety regulations, some of them established a long time ago, are now followed and enforced.” y
For more information on Unirope LTD and Knut Buschmann, visit
www.UniRope.com.
18
SEPTEMBER-OCTOBER 2014
WIRE ROPE EXCHANGE
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