Abel Integrated Handling Solutions

Performance Beyond Expectation

“Ultimately, what really brings a system together as a system is not just the hardware, but the flow of information.” These words from 2002 MHEDA President Michael Romano define the mission for his company Abel Integrated Handling Solutions in Lawrence, Massachusetts.

Abel IHS began in 1922 as Robert Abel and Company, an overhead crane distributor. As the role of material handling grew, so did the company's capabilities and line of products. In the mid-1970s, the company capitalized on the trend toward narrow aisle warehousing and became a Raymond forklift dealership.

Image: Solutions Provider
In 1995, Michael Romano joined Robert Abel and Company as its CEO and one of its owners, along with John Croce, now president. Croce was employed by Robert Abel and Company for over 25 years.

The two men decided to develop a business model that permitted their organization to more comprehensively address their customers' material handling needs. Building on the company's limited experience and success with systems, a business plan was developed and implemented. The next step for the company was a new image campaign.

The image of Robert Abel and Company would now be focused on its mission as a “material handling systems provider,” a company that could focus on every aspect of the customer's defined project. Already regarded and highly respected in its markets as a Raymond forklift distributor, it was time to leverage those strong customer relationships to provide a wider array of products and services that, says Romano, “would enhance our relationships and allow us to sell deeper to our accounts.”

Romano points out, “We now represent products that support a solution. We can perform the original scoping and engineering for a solution. We can install. We can service and support after the sale. This true turnkey approach differentiates us in the market.”

When asked what makes Abel's model so unique, Romano answers, “No matter how many forklift distributors dabble in complete systems, there are very few who have pulled it off. This, however, is a sound business model, one we feel we do successfully.”

He acknowledges a high cost and degree of risk. “The biggest investment is made in human assets. You have to invest a lot of money in specialized labor, i.e., engineering, project management and technical support people, before you see a dime. You have to demonstrate your capabilities, and when someone is talking to you about a two or three million dollar project, it's tough if you don't have a history of performance in that arena.” Initial success was supported by a strong reputation as a forklift provider and partner to many businesses in the New England area.

In 1999, Robert Abel and Company moved into what is now a 50,000 sq. ft. facility and as part of their image campaign, changed the company name to Abel Integrated Handling Solutions to better reflect its role as a provider of solutions. The company has won several awards from its suppliers and vendors, including Ermanco, Demag, Frazier Industrial Company and The Raymond Corporation. In fact, Abel Integrated Handling Solutions has been named a Raymond Dealer of Distinction every year since 1992. In 1999, the company won an industry Value-Added Award in recognition of its superior performance as a systems provider.

Strategy: Talented Employees
Abel's strategic advantage is its 118 employees whose experience and talent is second only to their commitment to exceed customers' expectations. “We realize that the customer is not doing business with a company, but is doing business with an individual at Abel,” says Romano. “The only way to maintain a long-term relationship between two organizations is to have long-term relationships between people.”

If Abel IHS is going to be successful in maintaining long-term relationships with customers, Romano knows the company has to have long-term relationships with its employees. The retention rate for Abel employees is just over 95%, a number that is unusual in today's marketplace. “That is absolutely a differentiator for our company,” Romano says.

The company commits to spending at least 10% of net income on training for every employee. “We also spend a lot of time motivating employees, talking about attitude and responsibility, teamwork and execution through our strategic planning process that involves all employees in the development and execution of plans.” Success stories and pictures are placed throughout the building, helping employees embrace and focus on Abel's mission.

Leadership for a New Era
A CPA by trade, Michael Romano worked for Touche Ross in New York City, now known as Deloitte & Touche. One of his audit clients was a Raymond dealer located in New Jersey. When the audit was completed, the owner offered Romano a job as the company's controller. Romano had no intention of leaving. “My wife and I were starting a family, so I decided to throw a number at the owner, thinking that if he accepted it, the offer would be worth consideration.” The owner accepted it immediately, taking Romano by surprise. Thus began his entrance into the world of material handling.

Michael Romano (right) says that partnerships with customers enable Abel IHS to provide total solutions, from forklifts to warehous-ing equipment.

Romano performed the standard financial and accounting tasks for the dealership, but was also called on to support salespeople in justifying a huge price disadvantage on Raymond equipment in the middle of a deep recession. His financial merchandising approach included a “Financial Considerations” section in every proposal. Included was a “Financial Justification” that presented the customer's acquisition in terms of an investment, and a “Financial Alternative,” which was a lease or finance transaction—with or without maintenance, collectively referred to as Deferred Payment Programs.

“It was great!,” Romano says. “As our salespeople presented their proposals, their customers would immediately turn to the last page to see the price. Instead, they would see the Financial Considerations section. This, of course, would beg the question: “What's this?.” Since the operations contact generally would not understand the analysis, the salesperson would recommend involving his financial staff. Accountants are always in the middle of the decision, but hate talking to the salespeople. As a fellow 'professional,' I wasn't selling. I was an objective source of information for them!”

This dual-prong approach permitted Romano's dealership to be involved with two decision makers at the customer's location, whereas the competition was dealing with only one. The relationship established with the financial person not only enhanced sales success, but also opened doors for lease transactions that enhanced sales margins, not only for equipment sold by the distributor, but for other equipment in the customer's project as well.

As an example, Romano tells the story of one account in which “a customer who was impressed with our approach and capabilities was actually looking for equipment from his project to include in our lease, which was approaching $3 million.” The customer suggested including the refrigerated panels which were, in his refrigerated facility, the walls of the building. Says Romano, “We were able to do it, much to the dismay of the building mortgage holders, who nine months down the road found out and had issue with having a building with no walls as collateral. We did work with them!”

Success led to the creation of a captive finance subsidiary that became an industry leader. Its mission was to insure that the financial objectives as well as the operational objectives of the customer were addressed.

At a distribution warehouse, a Raymond wire guided swing reach vehicle increases space efficiency and orderpicking productivity.

Romano was approached by Raymond Corporation CEO Ross Colquhoun to develop a national account program for Raymond. Colquhoun realized in the late 1980s that Raymond was losing opportunities to other manufacturers because certain large companies refused to work through distributors. “Some OEMs don't approach national accounts properly,” notes Romano, and he made sure Raymond did. “The critical ingredient for success is to approach it as a cooperative partnership between the dealer and the manufacturer.“ Within three years, Romano developed primary partnerships with The Home Depot, Wal-Mart and Circuit City.

Today as a dealer, Romano still believes in the value of national accounts from the manufacturer's perspective. “The biggest cost for a forklift distributor is the sales department. If someone else is willing to assume the cost of selling an account, and all we, as a dealer, have to do is service it, we'll take that business every day. Every time a Home Depot store opens, we love it, because we know we have six to eight additional units that need service and parts support.”

Although things at Raymond were exciting for him, Romano wanted to spend less time on the road and more time with his growing family. He left corporate life and moved to the Boston area to become CEO of Robert Abel and Company, Raymond's distributor in New England, where he set out to bring his innovative ideas and vision to a growing company.

In the six years since, Abel IHS has embarked on its new focus toward providing total solutions and has purchased an additional company, the Michael O. Womack Company, whose 92 employees serve the Connecticut and metropolitan New York markets. Now known as Womack Integrated Handling Solutions, it utilizes the Abel business model and takes a consistent approach to the market, leveraging off of Abel's system capabilities and infrastructure.

MHEDA: The Year Ahead
Romano joined MHEDA's Board of Directors in 1997, and brings a unique perspective to his year of service as 2002 MHEDA President. CPA. Distributor. Manufacturer. Owner. Romano has sat on all sides of the table.

He predicts that it will be difficult for many smaller companies in the industry to make it through this recession if it is prolonged. He expects consolidation to continue, and is very much aware of the companies whose owners will be nearing retirement age in the next few years. “The industry is ripe for consolidation, and I think the future of our industry will be in fewer and larger players. Also driving this is that bigger and more sophisticated customers will demand increased size and capability of suppliers.”

He advises MHEDA members to look internally to see how they can improve their efficiencies, and he has a few plans ready to help in the process. One is distance learning.

“It's very costly to send employees to a seminar for training. Airfare, hotel costs, and time away from the office all add up. As companies look internally to become efficient and attempt to work leaner, with fewer employees, training costs become more important. Employee time away from work is that much more critical for an organization, and now the costs are higher.”

Romano believes that on-demand, interactive, web-based learning programs are the future of training, and he wants the material handling industry and MHEDA to be at the forefront. “Education has always been one of MHEDA's primary contributions to this industry, and we will take a leadership role with this new method of educating our members.”

Industry Awareness
Another goal of the 2002 MHEDA President is to help with an issue that has plagued the industry for some time. Like so many others, Romano says, “The material handling industry suffers from poor public awareness and the resultant lack of availability of good quality people.” He points to what he calls the “incestuousness nature” of the industry, the hiring away of qualified employees from competitors. “It's OK to look within the industry for people who have experience in material handling, but there are many good, qualified people outside this industry who are not even aware of us. There are top marketing people, top accountants, top salespeople, top management, top individuals qualified to work in every area of our companies who don't know we exist. As our industry continues to consolidate, companies are getting larger. It takes a whole different skill set to operate a $100M organization than it does a $30M organization. Going outside the traditional avenues is now a plan whose time has come.”

A vertical carousel was used to max-imize floor space without encumber-ing picking selectivity for small parts inventory.

Romano knows from whence he speaks. Remember he came to this industry with experience in public accounting, having worked with many companies and varied industries. “It's good to come in with different experiences, because the blinders are off,” he says. “Our efforts to introduce college students to our industry have to continue. Most students at universities, colleges and trade schools still don't know what material handling is. Do you think these young people are looking to come into this industry? Probably not. So what do we do? We go back to the same people we have dealt with for years. We continue to recruit people who are working for our competitors. We are not maximizing our opportunities nor raising our industry's level of excellence.”

Romano plans to work with other industry associations to develop a public relations campaign about the material handling industry. He laughs when he talks about his vision, which has already garnered a few raised eyebrows. He cites the example of Intel. Several years ago, not many people knew who they were or what they did, yet they were the most important component in one of the most important technological advancements of the 20th century—the computer. Intel did several 15-second spot ads during the Super Bowl and by Monday morning, millions knew “Intel” was “Inside.” Romano says, “The material handling industry is similarly behind the scenes, contributing significantly to everyone's daily life without the recognition we deserve.”

The Abel-designed Warehouse Management System incorporates radio frequency (RF) technology to increase efficiency and improve accuracy.

Romano is not suggesting a Super Bowl ad extolling the virtues of the material handling industry, but he is looking at the possibilities. “An ad in Time or Newsweek is not as extreme as the Super Bowl—or expensive—but it can raise the awareness and appreciation for the industry. This would not only excite people about a career in material handling, but would also enhance the value of our goods and services in the marketplace.”

Maximizing Opportunities for Member Satisfaction
Romano, in his role as MHEDA President, wants to make sure every MHEDA member is ready and is maximizing their opportunities. Ads outside of the industry, distance learning, and a formal research plan to better analyze and understand MHEDA's markets, members and members' needs are part of his plan for this year.

“I'm excited about the opportunities of learning more about what the MHEDA constituency is looking for, and thereby providing the ability to modify our offerings to suit them. This is the same function all of us perform in our own businesses,” he says. “Every company owner is a customer satisfaction person. We always want to know how to make sure our customers stay happy.”

Romano is committed to making sure that MHEDA's customers, each and every member, has programs and resources that will satisfy their needs in the coming year. And if his resume as CEO of Abel Integrated Handling Solutions is any predictor, the year ahead will be filled with a clear vision, innovative ideas, and lots of success.