Scaling Back for Success

Enlarge Image One compact machine offered by UI Distribution is the UI 12 M-Lift.

March 9, 2006 — Following the closure of UpRight, Inc.'s Madera, Calif., facility in December 2004, UpRight International Manufacturing Ltd., based in Dublin, Ireland, made the decision to approach the North American market with a distributor-type mentality, appointing UI Distribution North America, Inc., as the supplier of its products and spare parts in North America. Based in Fresno, Calif., UI Distribution North America uses a 48,000-square-foot business and warehouse facility to represent products produced by UpRight International. However, when UpRight International announced it was formally withdrawing from the self-propelled boom lift market in December 2005, subsequently closing its plant in Baja, Mexico, and shifting all manufacturing operations to Dublin, Ireland, scaling back UI Distributions' product offerings would now allow the company to focus on its core products and services.

 

According to Graham Croot, president of UI Distribution North America, the initial problem the company ran into with its former distribution strategy was UpRight International was trying to do too much at once. One example is the boom lift products, which he said UpRight International began manufacturing after several companies were already well-established in that market.

 

“If you can imagine the size and complexity of [manufacturing boom lifts], the overall investment in the assembly process, the technical support, there really is a certain level that has to be reached to support that business adequately,” he said. “Over time, you can do it if you put enough money and time into it, but it was also proving to be a distraction to our core business, which is the compact scissor lift lines and the spare parts business.” Re-evaluating UpRight International's boom lift business and ultimately discontinuing production of its boom lifts is helping UI Distribution focus on its core businesses.

 

 

The new strategy

Croot said UI Distribution's current strategy is to “do what we do really well and build it up incrementally.” Take the PartsRight business, for example. Under the new plan, the company's first priority is to turn PartsRight into a world class parts business. One experience Croot said UI had in the last year was customers with UI brand machines said they were having trouble receiving parts, which the company felt could potentially drive customers away. PartsRight has since hired new people and is investing in inventory to build its spare parts business. In the short term, closure of the Mexico facility has improved the parts business because UI has been able to pull excess inventory from that location and stock up in Fresno.

 

PartsRight is handling its parts supply by gathering information and looking for additional sources for parts. “If there are generic products out there that are already being made, and they're already in the marketplace with other people, then we need to be competitive, find those sources, and match them,” Croot said. “We're looking for at least two vendors in every type of part we have.”

 

For aerial work platforms, the current North American product line includes the UI3818 K-Boom compact articulated boom lift; UI1930, UI2632, UI2648, and UI3148 X- Lift compact scissor lifts; UI3084 GL-Lift ground leveler; UI25, UI32, and UI40 V-LIFT push-around vertical lifts; UI12 M-LIFT self-propelled vertical lift, and UI38J and UI50 T-Boom trailer-mounted aerials. Croot said there is a strong demand for these models, and UpRight International will continue to build, develop, and distribute them in North America. “If we see products in the U.S. marketplace that we believe have a development role and can be a market for them, then we'll ask the manufacturer to supply it,” he added.

 

One of the major differences Croot sees in the North American scaffold market is scaffolding is not rented nearly as much as it is in other parts of the world. He said the return on investment for a 20-foot elevating tower versus a 19-foot scissor lift is far superior than the return on a 19-foot scissor lift. “The market demand for aerial lifts is much higher than the demands for scaffolding • but we believe that it is a very valuable product for people who rent it and a very valuable add-on product,” he added. Further developing exposure of its scaffolding in the rental market is another goal UI Distribution has set for the next year.

 

Customer support is also something that UI Distribution has been focusing more on. Croot said the company has a number of experienced employees who provide support and technical services over the phone to current and potential customers. “In these days, with everything going on the internet, I still feel strongly that there is a place for personal service,” he added. Additionally, UI Distribution plans to increase its web presence by improving its website and its ability to sell online.

 

You could say that UI Distribution's current strategy is not to be the biggest in the industry but to offer North American access users something different. “I wouldn't say we are a niche player, but we want to supply products where we can add value,” Croot said. “If you went back to the 1990s, every manufacturer adopted the mentality of being a full-line producer to provide everything to everyone. It has proved to be a fallacy and created the demise of quite a number of manufacturers.”

 

Although UI Distribution's current plans are not going to happen overnight, Croot said the company is committed to building a business that provides a valuable service to its customer and an adequate return to its shareholders. “If we don't do those, we become almost irrelevant to everyone • and we don't believe we are,” he said.