JLG's ServicePLUS
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July 21, 2004 - The recent announcement by JLG Industries, McConnellsburg, Pa., about the formation of ServicePlus is yet another signal of the trend for aerial work platform producers serving as their own quasi-distributors.
Since the beginning of this crazy business the only constant has been that distribution of aerial work platform equipment has been unconventional. Because rental fleets absorbed the vast majority if this equipment, OEMs have sold equipment directly to hundreds of independent rental operators. Many rental companies strove to make service a big part of their business-and did so successfully. But as rental companies consolidated, service as a profit center slipped down the priority list for many, creating a service void for AWP owners and a lack of local product support for many large fleet owners.
The absence of a "distributor" to provide warranty support and major repairs has become a stumbling block in the expansion of the bigger rental companies with large AWP fleets. JLG recognized that if these big buyers were reluctant to invest in equipment that they couldn't get local support for, the market would likely erode. So, in response to its customers' needs, JLG's ServicePLUS facilities will offer everything from preventative maintenance programs to general repairs to the reconditioning of JLG equipment.
The first facility will be located in Houston , Texas , with easy access to one of the largest petro-chemical markets in the world. Over the years, thousands of JLG machines owned by rental companies, contractors, or as part of facilities' fleets, have flowed in and out of these plants. It's safe to say that the largest concentration of JLG equipment in the world is located on the Gulf Coast between Corpus Cristi, Texas and Mobile , Ala. . The Gulf coast has been a pretty good market for SkyTrak equipment, as well. This combination of factors will be a major key to opening Service PLUS centers in other parts of the country.
JLG demonstrated its commitment to this concept when it announced that Joseph Gullion had been named president of ServicePLUS, a wholly-owned JLG subsidiary. Gullion's past experience as CEO of National Equipment Services should give him the insight needed to deal with the issues facing fleet owners.
The big question is: Where next? Will there be a ServicePlus branch in every major market? Certainly there are large enough concentrations of JLG, Gradall, and SkyTrak equipment in other parts of the country to support this initiative. In addition, the service need has gone unmet for a decade. But growth will take time, and JLG will have to navigate the same waters that helped generate this market opportunity in the first place-manpower! The shortage of qualified service technicians has fleet owners scrambling from coast to coast. It's been that way for the nearly 30 years that I've been involved in this business. Undoubtedly, this will be JLG's biggest hurdle.
It's unlikely that JLG will raid its own customers to fill the technician positions, which means a lot of staffing will have to be homegrown. JLG has the plan, the capital, the expertise, and most definitely the market-but do they have the human factor necessary to make ServicePLUS a success?. Human resources, more than anything, will dictate the speed with which this enterprise can capitalize on a golden opportunity.
