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Vertical integration gives lift truck company integrity of supply

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When a company pushes into global markets the scene is ideal for increasing turnover, yet throughout industrial markets there is growing evidence of companies evolving and expanding only to deliver a lesser quality product or service.

Globalisation of industries is a relatively new concept, yet commentators around the world have pointed to the limited success of consolidation through acquisition policy.

One global company with a strong presence in Australia, Crown Equipment has challenged other big players in the lift truck market by moving forward through vertical integration.

Crown marketing manager Craig Kenchington observed that acquisition-based growth often stretches the capabilities of parent companies and compromises several important aspects of business.

"Regardless of the industry, when one company acquires several well known brands and begins to run them under one banner, the operating logistics are increased many times over and the potential for problems is exponentially increased,” he said.

"Almost overnight, a company which for a long time was a single brand company now owns, say, two former competitors and thus is forced to run three separate images, three distinct sales forces, three service departments, and the most critical and difficult of all, three completely different lines of parts and equipment.

"Managing the business processes becomes infinitely more difficult, the likelihood of problems increases and the customer base is compromised.

"Crown management foresaw this long ago and went in the direction of vertical integration. Our aim when producing new products is to design, engineer and manufacture our products in Crown facilities and support them with Crown people."

On a domestic level, Mr Kenchington regards the stability provided by vertical integration as an assured way of delivering a much lower cost of lift truck ownership to its clients.

The lift truck market is worldwide; therefore any lack of intelligence put into setting up vital support structures and supply lines can have huge negative impacts on customers internationally.

More often than not, domestic post-sale parts supply and technical support is stretched in a multi-brand structure.

While much of the lift truck market relies mainly on overseas expertise and limited parts imports to cover Australia and New Zealand, Crown has developed its operations so that more than 85% of required technology and inventory is based in Australia.

It is a vertically integrated system designed to facilitate a rapid and complete response to any issue in the field, without the need to turn to external suppliers.

"Fleet operators face productivity losses if their lift trucks are out of action, so it is imperative to keep vehicles well maintained and the most efficient way to achieve this is to have access to local parts and specialised engineers," Mr Kenchington said.

"Savvy operators of lift truck fleets are very aware that investment value comes not just from ticket price per vehicle, the true calculation is made over the entire lifecycle of the product.

"This is why Crown continues to manufacture several of its products in Australia, has its own 2000m2 spare parts facility in Sydney, bases its technical support here, and has over 200 fully-stocked maintenance vehicles in action around the country to keep its complete range of electric and internal combustion lift trucks functioning at their optimum."

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