How was 2019 for Tennant Australia? What were the highlights? What were the challenges?
2019 was a very important year for us. We hired seven new people in our field sales and sales leadership teams. Normally when a team has this type of change it’s difficult to perform, but we showed positive year-on-year growth on both the top and bottom line in 2019. As we move into 2020, we have a stronger team in place and a good foundation to accelerate our growth.
Highlights were our sales results with direct sales, distribution, and our direct service team’s growth. Our marketing team played a big part in helping to generate these results. Our operations team also did a fantastic job making sure we had a much stronger inventory position to give our customers quicker response time on parts and machinery.
Probably the biggest highlight was bringing our T7 AMR (robot) to Australia and showing it to customers ahead of schedule. Customers have told me consistently since I arrived 15 months ago, they have been waiting for Tennant to come to the market with a solution. It’s been exciting to finally show them our technology.
One of the challenges was the order intake around the Australian election and just after. Things slowed a bit for us in July/August more than we anticipated, but orders have bounced back nicely.
What will be the immediate focus for Tennant in 2020?
Our immediate focus will be the launch of T7 AMR robotics machine and making sure we have all the right deployment and aftermarket resources in place nationally to support customers.
Our focus will be on launching the IPC brand to support our distributors and customers with new products (micro-rider) and a different value proposition when it is required and adding two field sales positions to connect with more customers.
What challenges and opportunities do you see for Tennant Australia looking ahead to 2020?
The Australian currency had a tough year in 2019 – this creates challenges when we import products into Australia.
From an opportunity perspective, we see positives on both ends of the value spectrum. Australian customers continue to show interest in ways to leverage automation to increase cleanliness and redeploy labour. We will now have our AMR/robotic offering in Australia starting in 2020.
On the other end, many smaller to mid-size BSCs and retailers are expressing interest in a more basic product with less complexity, but still have strong aftermarket support. We see this as an opportunity to gain new customers with our IPC offering.
Did you notice any trends in 2019? Do you expect those trends to continue into 2020?
We’ve noticed some larger industrial customers wanting to go more direct with us, whereas in the past they preferred to use a material handling partnership. We still like having partnerships with forklift companies where there is a good fit, but I do see a lot of the multi-national companies that know Tennant preferring to do business direct.
Are there any international trends you think will make their way to Australia in 2020?
At a Tennant corporate level, we are going to get much more focused on products and technologies where we have a competitive advantage, and less distracted in areas we do not. We will be applying the same logic to our Australian strategy and offering. The back and forth between the US and China sends ripple effects to many other economies (good and bad). This could pick up in 2020 with the US election in November.
Did you notice any changes in customer behaviour in 2019? How have you adapted to meet these changes?
Some of our top BSC strategic accounts have preferred used equipment at times. This could be in response to cost pressures from some of their top clients. I’ve not seen this in other parts of the world where I have worked for Tennant.
Second-hand, or reconditioned equipment, is a business Tennant does very well in around the world. We have all the resources already in place to support it in Australia (parts, service, facilities, strong marketing).
We needed to focus on rebuilding our team in 2019 and moving on our 2020 robotics strategy but building a strong second-hand business that leverages the Tennant established model will be important in the back half of 2020. It will help some of our top BSC customers, but more importantly, it opens a whole new customer base for not only machines, but also service and parts.
What role will innovation play for Tennant in 2020?
Innovation has been at the core of Tennant’s identity the last 20 years. It will continue to play a big role in 2020 with robotics. We are excited to share this value proposition with customers and continue to innovate around it. There is also an opportunity with our new sweeping technologies to help reduce/minimise exposure to silica dust.
What is one issue the industry should urgently address in 2020?
There is an opportunity for manufacturers, BSCs and end-users to have a deeper discussion. The current lead times end-user customers give BSCs to start a new project are tight.
This puts more pressure on BSCs and it also makes it challenging for manufacturers to plan inventory correctly for the BSC or end-user.
Having a collaborative discussion around longer transition times would benefit all parties involved in terms of having the right products for the job on the start date.
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