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Safety First, Second and Third

BY Ken Clark

You would like Chris Falcon if you met him. You’d probably want to hire him. He is a combination of polite, serious, professional, friendly and knowledgeable. He was on our cover back in December 2010 when we wrote about the Home Depot’s distribution strategy (see picture).

I was reminded of Falcon when our staff was researching ideas for a safety-related story by typing the words “forklift accident” into a popular internet search engine. Even though our editors have been desensitized by the violence of “Game of Thrones,” we were shocked by what we saw on the small screen.

[Note: You can take the forklift accident video poll at HBSDealer.com. Better yet, turn to the National Lumber and Building Material Dealers Association forklift safety program. Recorded in an actual lumberyard environment, the best-practice-rich program has trained thousands of employees across the country, and offers steps towards compliance with OSHA standard 1910.178.]

The accident videos demonstrate that this stuff can’t be exaggerated. And companies at the top — such as Home Depot, which ranks No. 1 on our Top 300 Industry Scoreboard — embrace that attitude. 

That brings us back to Chris Falcon and the time I visited Lake Park, Ga., to tour one of the retailer’s modern distribution centers. 

The massive facility was carefully designed — even the tools on the pegboard were outlined to show what tool goes where. More to the point, lines were painted on the floor to guide the paths of foot traffic and forklift traffic. At intersections of these paths, the word “stop” was written for the pedestrian to obey.

During the morning rush, Falcon would stop at these lines, look left, look right and proceed safely.

Now picture this place at lunchtime. Nothing moving for miles. No sound of whirring machinery. And here’s Falcon leading our group to an intersection in the empty building. I wondered if he would stop at the line and look both ways.

Let me emphasize: There’s neither machine nor soul for seemingly miles around. The only sound was our footsteps in this huge, empty space. 

Here’s what happened: Falcon walked to the line, stopped, looked left and right, and proceeded safely. 

Point made. If you’re going to follow safety best practices only when it’s convenient, then you might as well not follow them. 

# # #

Does your company culture embrace safety? Let us know  your best practice. Tell us at [email protected].

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Fueling the propane movement

BY HBSDealer Staff

Briggs & Stratton Commercial Power engines are now available for propane conversion through Propane Power Systems. The EPA-certified conversions are available for 11 Vanguard and Commercial Series engines, ranging in displacement from 205cc single-cylinder horizontals up to 993cc BIG BLOCKTM V-Twin engines.

“Briggs & Stratton’s expansive commercial engine lineup that is convertible to propane is yet another sign that propane-powered equipment is taking hold,” said Jeremy Wishart, deputy director of business development at the Propane Education & Research Council.

These certified converted engines allow equipment manufacturers to offer propane to customers looking to take advantage of the benefits of propane-powered equipment, the company said.

Propane Power Systems, a division of R&R Products, worked on Briggs & Stratton Commercial Power engines and leading equipment manufacturers’ products to develop the fuel system and mounting conversion kits. The Propane Education & Research Council provided funds to support technical training for Briggs & Stratton dealer service personnel.

“The propane trend is growing in many commercial markets, especially in landscape and light-construction,” said Jim Cross, Briggs & Stratton Commercial Power marketing manager. “Propane Power Systems’ development of conversion kits for our Vanguard and Commercial Series engines provides OEMs a wide array of certified solutions for their customers who want propane.” 

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Steady growth for heavy equipment

BY Ken Ryan

New business volume grew 2.5% in the equipment finance industry in 2016, marking the seventh consecutive year that businesses increased their spending on capital equipment. Construction was among the top five most financed equipment types in 2016, according the 2017 Survey of Equipment Finance Activity (SEFA) released by the Equipment Leasing and Finance Association (ELFA), the 2.5% increase is down from the 12.4% growth in 2015 but still outperformed the national economy, which grew at 1.6% in 2016.

“The equipment finance industry continues a slow-growth trajectory, mirroring a fundamentally sound—if unspectacular—U.S. economy during the past several years,” said Ralph Petta, ELF president and CEO. “Despite a slowly rising interest rate environment, leasing and finance companies are profitable entities, with generally healthy portfolios and sustainable levels of returns.The SEFA report covers key statistical, financial and operations information for the $1 trillion equipment finance industry, based on a comprehensive survey of 115 ELFA member companies.

Key findings for 2016 as reported in the 2017 SEFA include:

By organization type: Independents saw a 12% increase in new business volume, while banks saw a 5% increase and captives saw a 5.9% decrease;
    

By market segment: New business volume grew 5.2% in the middle ticket segment and 0.8% in small-ticket, while large ticket declined 1.8%;


From an asset perspective, the top-five most-financed equipment types were transportation, IT and related technology services, agricultural, construction and office machines. The top five end-user industries representing the largest share of new business volume were services, industrial and manufacturing, agriculture, transportation and wholesale/retail;


Assets under management rose by 13.9% overall, helped by increases in sales budgets and sales personnel, which reflected companies’ efforts to grow volume in an increasingly competitive environment. Return on assets also remained positive after declining by a percentage point to 1.4%, and balance sheets strengthened as net worth rose by 9.1%;


Interest expense increased year-over-year by 14%. The cost of funds decreased slightly;


Efficiencies gathered from increased automation and greater application of data analytics contributed to an overall year-over-year dollar increase in net income of 7.8%;

Delinquencies increased slightly, with 1.8% of receivables over 31 days past due compared to 1.5% the previous year. Net full-year losses or charge-offs also increased slightly but remained at 0.29% of average receivables; any level lower than 1% is considered very low;


Credit approvals increased slightly while the percentage of those approved applications being booked and funded edged down overall;


Employment levels rose 13.3% overall in 2016. This is likely the continued impact of the absorption of the GE Capital portfolio and personnel by the acquiring banks, the report said Headcounts in accounting, tax and legal remained stable, reflecting the implementation of back-room efficiencies as companies continued their push to do more with less.

The full report is available at elfaonline.org/SEFA.

ELFA also released a companion report called the 2017 Small-Ticket Survey of Equipment Finance Activity. The report, which focuses on small-ticket and micro-ticket equipment transactions among the SEFA respondents, found that new business volume in the small-ticket space grew by 10.7% in 2016.

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