MCJ Supply Chain Solutions: Kai Beckhaus

IndustrialSage

Kai Beckhaus of MCJ Supply Chain Solutions returns to share his thoughts on remote work, and missed opportunities for companies to adopt automation in their fleets.

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Danny:

– Well hello and welcome to today’s IndustrialSage Executive Series. I am joined by Kai Beckhaus who is the president of MCJ Supply Chain Solutions all the way down in Houston, Texas. Kai, thank you so much for joining me again. This is your second time on.

Kai:

– Thanks for having me, Danny. Good to see you again.

Danny:

– Great seeing you. So obviously a lot of things have changed since the last time that we spoke. And I think we’re going to get into that in this episode, but before we do that, for those who maybe did not watch the first episode and don’t know who Kai is or MCJ, tell us who you are and what you do.

Kai:

– Sure. Yeah, my name is Kai Beckhaus. I’ve worked in the material handling industry basically all of my work life and was an executive at Jungheinrich which is one of the two big material handling equipment companies that are the parent organization of MCJ Supply Chain Solutions now. Our mission is to bring Jungheinrich automated forklifts, trucks, AGVs, and all of the automation technology they have to the North American market US, Canada, and Mexico. And the second material handling partner that is a joint venture partner here for us is Mitsubishi Logisnext Americas. And with that setup, we have a good basement for all of the spare parts, the mechanical service, so that we can focus really on the system, the software integration and bringing those material handling automation projects to life to support our customers with their supply chains.

Danny:

– Fantastic. Last time we spoke—and I’m trying to remember. I believe it was April or May—

Kai:

– Right at the start of the pandemic, if I recall correctly. We were just going into lockdowns and the economy’s down.

Danny:

– So approximately five years ago; at least it feels like it was five years ago. So March-ish or April. Obviously a lot has changed. When we spoke, at that point there was a lot of unknown. There’s still a lot of unknowns I feel like, but there were certainly significantly more unknowns at that point. Now we know a few things. A lot of pivots have been made. A lot of things have happened. How has MCJ changed since that time?

Kai:

– Obviously we spoke at the beginning of the pandemic, so there hasn’t been a lot of change. All of us had to, customers and ourselves, really adapt to this pandemic and how to behave in it. It has been a long time since the last pandemic occurred, so none of us had that experience in our work lives where we had to cater for employee safety, obviously, and go into an economic downturn for the first months. Then picking back up and seeing a lot more automation demand because people realized automation is the thing that helps even when workers can’t come in when there is lockdowns. Supply chain resilience is very important to get all of the essential goods out to everyone.

Danny:

– Perfect. You mentioned obviously that you’ve had a lot of changes. You mentioned there’s new products being rolled out. You mentioned that there is an increased, higher demand. What does the future look like for you? How does it alter your future?

Kai:

– I believe when you look at different industries, the automation, when there is big manufacturing like car manufacturing, robots have been in that area for very long. There have also been AGVs since the 60s, but the degree of how many automation projects are deployed is just so much smaller than in other spaces. And I think this pandemic was an accelerator for that. There’s a little over, let’s say, 1.1, 1.2 million forklifts sold every year over the world, and that ratio of automation, whether it’s AMRs or AGVs is just so slow right now and small right now. So it’s going to grow significantly, and the pandemic was a boost to that. So I would say it is a permanent thing that automation will be more important. And a lot of clients whenever they have a bigger fleet of forklifts to buy will consider, is this something where automation makes even more sense than investing in operator equipment where we need a human workforce to run these fleets through the supply chain processes that are required.

So I think that’s going to be a permanent change for the whole industry and adapting to integrating those solutions to existing environments. That is one part where with the logistics interface, the middleware software that we utilize and it’s becoming more and more important to have quick implementation times, seamless integration into the system because you don’t want different islands that don’t work with each other. Also the collaborative factor, very important whether it’s AMR or AGV, this is typically a lot of human interaction, especially when you have free-ranging AGVs there. So it’s going to be very important to have all of that collaborativeness in the products, and that’s going to continue. So we’ll see a lot of development and growth in the material handling, automation sector over the next years to come.

Danny:

– Absolutely, that makes a lot of sense. Now relative to MCJ, what were some of the pivots that you had to make to adjust? This could be pivots that you had to make internally from a way of working as well to maybe pivots to business model or products?

Kai:

– Well internally, obviously, travel was restricted in the first pandemic. So what we did is typically we would in a sales project and really walk the facility with the client to do two things: to really check all of the environments or constraints, see where is special things we need to cater an AGV solution and also to consult, what’s the best processes? Maybe the customer has something in mind, and with their expertise walking that site, we recommend, we might want to add that, or let’s be careful here. So all of that had to go virtual. It worked out well. We were a little nervous at the beginning. Hey, will we catch everything that we would used to? But our clients have been really great. They are working with us. We’re driving the same amount of time, four hours on site, and just walking the site on a Zoom or Teams call, and that really worked out well. So that’s an adjustment where the new technology supported us a lot. With all of these products, Zoom and Teams… the pandemic, you could say, came right at the correct time. Imagine this would have happened 10 or 20 years ago where all of this digital technology that we use, video conferences and so on, wouldn’t have been that far developed as they are now.

Danny:

– So doing these virtual site inspections, if you will, where you said you’re doing them through Zoom or Teams, were people walking through with an iPhone or something saying here’s this and here’s that, and you were able to replicate that by doing that.

Kai:

– Correct, correct. We had a clear layout where we discussed and we could talk. There was really a good dialog on that so that we said, okay, let’s focus on that. Can you please zoom in a little bit here? Go closer to that. Describe that process to us, all of the handover interaction points so that we make sure we deliver the same perfectly customized solution that fits that automation demand of the client as we would have done with an onsite visit.

Danny:

– That’s obviously a big change and a big challenge from a sales perspective. Do you anticipate, is that going to remain? Obviously virtual experiences don’t 100% replicate something that’s done in person. But in some cases, we find that it’s a little bit more efficient. Reduce travel time and whatnot. Are you seeing or expecting that that may be something that you’ll keep or go back or a mix of the two?

Kai:

– I think it will be, as with the internal workflows, likely it’s going to be a hybrid mode. I think a lot of business interactions, B2B, understand that it might not be that efficient to jump on a plane, have a full day or even two-day trip for a two-hour meeting. So I think a lot of those will be kept on a video conference where it’s a professional setup and you can discuss topics, clear out some contract language, let’s say, things like that. But the longer meetings when it comes to a site survey, when it comes to the implementation for being onsite and really teaching in-person rather than remote, all of those I think will resume to normal. It’s always good to have that personal relationship as well. To my experience it has always been a lot easier to do the very good and deep connection even on a virtual call once you have met prior to that in person at least once. So when you know a person, then it’s very good to reconnect on Teams and Zoom, but establishing new business merely via video conference can be a challenge. There’s a lot of areas where this works too, but I think it will be a hybrid that there is some travel to meet in person and then follow-ups, and especially those shorter meetings being diverted to having video conferences.

Danny:

– Yeah, I agree. I think we’re seeing that a lot across the board as well. Now you mentioned, too, how you had some new products that you had developed. Were these in response to the pandemic, or is it something that you already had on the roadmap?

Kai:

– Yes and no. It’s really both. We had a few facelifts to our products. The stacker and also the tugger model, as a response to the pandemic, it was also the enhancement of auto-hitching and unhitching so that it’s even more fluid process there when you pull tuggers to seamlessly connect the trains that they carry and unhitch as well. In general on the roadmap we had also to go to the biggest form of AGVs that we have in our portfolio which is the automatic VNA truck, very narrow aisle, high-density storage, and that area is one area where it’s really important to go for automation when you want to have a high throughput, 24/7 operation very often in that area and having this storage capacity at the highest. And a lot of customers that opt to investigate into that solution really see an AGV VNA application as an alternative to an ASR, automatic storage and retrieval system. So that is something which we had on the roadmap to add and bring into the market. Now working on the first project here, so that’s a good addition to the AGV portfolio to really automate the full process, full material handling of clients and being able to cater to all of that demand.

Danny:

– Absolutely. Well it sounds like it certainly helped to expedite things a little bit more to be able to bring those in there. And it sounds like those features from a product standpoint really are more permanent.

Kai:

– Correct, absolutely. And the good thing is, a lot of customers really want to investigate automation and what a learning for us was to give the customers the flexibility. So let me give that example in which we’re back to that VNA. The Jungheinrich product portfolio is designed that it’s the same truck whether it’s completely manually operated, whether you go halfway with the automation and go with the semi-automation where there’s still an operator on board, but all of that driving from the truck is automated already. So it’s just giving full-throttle speed, and the truck stops at the correct destination.

And then the third level which can be also extended on the existing manual equipment is the full automation then, and that gives the ease so that clients say, okay, I want to start. I have manual trucks. I want to go with the semi-automation first, and in half a year once we come out of the pandemic, we have everything sorted, I definitely want to be prepared for the next run, so I’ll upgrade to full automation then. And that is something where we see this interaction, collaborativeness, that also an AGV might be operated in times. Clients really like to see the ability to hop on the vehicle and drive it manually there too. So all of that flexibility I think is even more important now, being prepared. You don’t know what the times are going to be. Are we going to go into an inflation now, some of these economists say. So people want to be flexible, and an AGV solution that can also cater for that is very important to really adapt to whatever requirements our clients have.

Danny:

– Yeah, that makes a lot of sense, as you mentioned, sort of future-proofing. It sounds like you’re able to give people a stair-stepped approach. I really like the flexibility piece because we’re hearing a lot of stories of a lot of companies having to switch up their supply chains and the way that you might import goods, whether it’s raw or finished. All that was changing. So with your existing infrastructure there, if it’s more permanent, that was a little bit more challenging versus saying, hey, we really needed something that was more an AGV here, but now we need to go a little bit more manual for the moment, and then we can switch. That sounds like a really great solution to bring adaptability and flexibility. Certainly as you mentioned for the future, who the heck knows? Hopefully we don’t go through something like this again. But inflation and all these great, wonderful things that nobody has any idea what’s actually coming down the pike.

Kai:

– Correct, correct. And I think it’s the same for the workforce. Flexibility is really important for yourself as well. It’s a lot different now to manage a business. You need to be flexible, be able to react fast, and I think we all proved that at the beginning of the pandemic. Everyone had to install new protocols of how to deal with this and now change it. Also for the hybrid work mode, I think a lot of employees, that’s something that will change. Every company is looking at having more flexibility. I’m not a fan of the extreme, so I would not say 100% home office, we work remotely, is really good for a company. But also it’s not being 100% in the office. It’s really, what’s best for the day? Is there interaction? Is there workshops? Is there brainstorming? That just works better in person, but when there is really individual work, everyone can be concentrated and can save the commutes to any office. So I think that is something that will definitely stay from the pandemic that there is more flexibility offered by companies but also demanded by the workforce.

Danny:

– Sure, yeah, absolutely. We’re definitely seeing that right now. One of the things, kind of a fun question I like asking is, if you had a magic wand—I’m giving you a magic wand right now—what are one of the challenges in the industry that you would want to see solved or taken advantage of—you could flip it and say, hey, there’s an opportunity. What would that be? And one caveat to your answer: it can’t be, I wish Covid would go away or whatever.

Kai:

– The next crisis is going to come, so we have to cater for that. Good question, Danny. Let me think. I think one thing that I would really wish with a magic wand to change is an openness on the client side. I think a lot of customers or material handling equipment users are just used to, they have forklift fleets. At some of those it would be really a perfect use case for automation. But they just don’t consider automation. I think to some people out there, automation is still something—we talked about it earlier—the car manufacturing OEMs, whatever, so really those robotic arms manufacturing cars. But automation has advanced in so many areas, so that we have a higher pace of replacing manually forklifts with automation by just talking about it. And I think this consultative approach, a lot of clients value that. And the second thing that goes with that is, often it is advisable for clients to really be open and just say, hey, I have this operation manually. What would you recommend? Do you offer recommendations for automation? How would that look like?

But instead some people ask, I have five forklifts of Type A, so what is your replacement of Type A automated version? Maybe Type B would even be better for that use case in the automatic version. So this openness to being consulted, but raising that thought, yes, automation might help me in my situation, and I’ll enquire about it, and I’m open to talk about it. I think that is something that would help the users, all of these supply chain operations out there as well as vendors as MCJ and Jungheinrich brand here that we represent about our competitors as well to really see more of that interest in the automation and adapting to that and talking about it because there is a lot of demand and a lot of potential for our industry out there as the ratio, when you compare more normal forklift trucks to AGVs is just so small. It’s around a percent or two at max I would say when you look at the worldwide ratios there.

Danny:

– Absolutely. Well great answer to that question, if only we could be more open to these solutions and say hey, this is a viable solution to solve a lot of challenges that we see, I see, you see and being able to facilitate those discussions and look at how these solutions in your specific use case are viable. So yeah, great answer. My last question is another fun one I like. What are you doing as a leader to really stay at the top of your game leading your organization? You said you’re a little bit of a startup here in the US. What are you doing?

Kai:

– That’s a good question. I think it comes back to this flexibility we have talked about. To stay flexible, it’s important to have discussions. I would say two things really as an answer. The one thing is obviously I want to read things. I like to read books from other businesspersons. Last thing I read was from Tilman Fertitta who is owner of the local Houston Rockets basketball team here and also a lot of restaurants and so on, so that is a book a little bit more from the B2C side, but a lot of good ideas he mentioned there, so I enjoyed reading that as well as just, was a weekly newspaper. I like to stay informed on how businesses develop in Europe as well, so I read one European Newsweek. They have Business Newsweek as well. But even more importantly than reading is to me really the connections and talking to other people and having an open mind to really get feedback and ask for advice.

I think that is something that changed in our generation, Danny, to maybe the CEO generation that is retiring now where it is less the CEO needs to be the strong person that never asks anyone for advice. It would be a weakness, and I think more in our generation it is, you have peer networks. You have mentoring relationships a lot more. I was fortunate to have really good bosses throughout my career and even in the position now with a board of managers and family and friends to really discuss certain business topics and get ideas and adapt those to really see what’s the best fit for me and get ideas and think about the right strategic implementations for your own situation, their own business at this point in time. And then also paying it forward and supporting younger folks with being a mentor there. So I think that is something where we are in a really good setup these days with a lot of networks and maybe social media and video conferencing. They have helped a lot too. It’s a different kind of networking than it used to be in the generation of managers that is retiring now is my personal belief there.

Danny:

– Yeah, I love it. Reading, love it. I have to check out the book that you were talking about to read that. But then also, I love how you mentioned that you ask advice. That is a big shift from maybe the outgoing CEOs that have been established. You’re right. I think that would have been perceived or was traditionally perceived as a weakness versus saying hey, let’s look and see. Maybe there’s some great ideas that somebody sitting in the corner that is introverted and have some amazing idea or something that pops up. I didn’t even see that. Somebody who’s going to be a little bit more closed, and you engage and open. I love it.

Kai:

– And the good thing is, you don’t have to take all of it. There is advice I like to listen to everything. It doesn’t mean you adapt everything. You still think about it and can really cherry-pick for yourself. But all of those ideas and from discussions, I think that’s a very good way to really get ideas as to say some persons that would not raise their voice if not asked. I think that’s very, very important to keep in sync and keep up to date, learn a lot from others and driving business forward. The world will remain flexible. Flexibility will be very important in the workspace, but also especially for those people managing those companies. So I think that’s—hopefully, I totally agree to you, we don’t get another pandemic anytime soon. That was enough, too real for all of us. But the next challenge will be around the corner, and there’s so many things like cyber security that has been a topic now which, ten years ago that was a totally different level. So there’s many different areas where it’s very important to remain flexible and learn and adapt to be able to be prepared. And when certain situations occur, being empowered to react quickly and thoroughly.

Danny:

– Absolutely. Well Kai, listen. I’ve really enjoyed our conversation. We’ve unpacked a lot of different things. I’ve loved hearing your feedback, hearing your answers to some of these questions and learning about how MCJ has pivoted, what you’ve learned, different things that are going to stay permanent. I like this wholesale hybrid model going—we think, yeah we got some virtual, but then in-person’s going to come back and just solving challenges in the industry and what you see going forward. I really appreciate your insights, and I know that every one of our subscribers are going to love it as well. So for those who want to learn more about you guys can go to mcj.team. Is that correct? Did I get that right?

Kai:

– Correct, that’s our URL where we have all of the product portfolio and a link to the Jungheinrich brand of automation equipment that we represent and give an overview of what we do.

Danny:

– Perfect. Well Kai, again thanks so much for your time.

Kai:

– Thanks, Danny.

Danny:

– Maybe we’ll do this next year. We’ll just see—

Kai:

– I’d love to come back. Sure, thanks.

Danny:

– …what is happening because I’m sure a lot’s going to happen over the next year. And there’ll be all kinds of things. Thanks again.

Kai:

– Thank you too.

Danny:

– Alright, well that wraps up today’s IndustrialSage Executive Series with Kai Beckhaus who is the president of MCJ Supply Chain Solutions. You can go to mcj.team to go check them out. Thank you for watching or listening. Listen, if you are not subscribed, go to IndustrialSage.com if you’re watching this on social media or listening and you’re not on our channel right now. Go to our website, and you need to subscribe because you’re missing out on great content like what you just heard here from Kai. So you can learn from other professionals in the industry, see what they’re doing and learn. So thank you for watching. Thank you for listening. And I’ll be back next week with another episode on IndustrialSage.

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