Automation: At Dematic, customer service leads to growth

Dematic has been on a tear over the last few years. Between 2009 and 2011, North American revenues more than doubled, and less than a third of the increase is attributable to the acquisition of HK Systems in late 2010. Despite the recession, Dematic has hired 583 engineers since the downtime, with plans to add more.

John Baysore, president and CEO of Dematic’s North American operations, expects the good times to continue, with an anticipated 12% increase in revenue in 2012. Baysore says Dematic has seen its revenue grow as the market for automated materials handling systems has come back from the free fall in 2008. But Baysore also contends that Dematic is winning market share in North America as well. What accounts for its success?

“We have worked feverishly to be more competitive and to be easier to do business with,” he told me.

We spoke last week at Dematic’s North American headquarters during a day I spent in Grand Rapids. It was a chance to get out of the office and learn a little more about three of the industry leaders than I can from a telephone conversation or a booth visit at ProMat. I also stopped by TGW and viastore, and will be writing about those visits next week.

Baysore came to Dematic in 2007, shortly after the acquisition from Siemens by its present owners. While the company was struggling to turn a profit in the North American market at the time, Baysore credits Siemens with planting the seeds to transform Dematic from a product-focused company with a heritage in conveyors into a solutions-focused company. “One of the first things we did was to let our sales personnel become a resource of information to drive the developments of our products and technology,” Baysore said.

More importantly, he said the company focused on four key areas:
—Reduce its costs to become more competitive
—Improve its customer focus
—Develop technological advantages
—Develop an industry leading after-market business

“After we changed the way we managed the business, our customer satisfaction numbers took off,” he said. Since the HK acquisition, for example, Dematic has customer service representatives in 57 cities in North America. Customer service and after market sales is a growing component of Dematic’s revenues.

The importance of customer service was evident in the tour I took of the facilities. We visited the technical center, a huge space with many of the technologies Dematic offers today, from mobile apps on an iPad to a mini-load AS/RS and multi-shuttle fed goods to person picking solution. But we also spent a fair amount of time in the customer support area, where a dozen or more monitors displayed real-time KPIs such as which technicians were on the phone with a customer and who was available to field the next call, along with information about some 22 customer systems Dematic was monitoring. “We have a 13.3 second average response time,” said Steve Brandt, the vice president of business development in the customer service department.

Before I left, I asked Baysore where he sees Dematic’s growth in the near future, especially given HK’s heritage in manufacturing systems. “We have not turned away from servicing manufacturers,” Baysore said. “But distribution, especially multi-channel distribution is exploding.”

“Think about this,” he added. “Only 5% of distribution is automated. Ninety-five percent is yet to be automated. We’re going to continue to see automated distribution grow.”