Ann Price’s company, Motek, offers distributors a high-tech way of updating their inventory. The company makes software that allows forklift operators to update records from the warehouse floor, even as they are moving boxes. The trouble is, the system requires a major investment in hardware and software, providing a challenge for Price to convince her customers that the system would eventually pay for itself. She spoke to Karen Teitelman about the issue.
We automate warehouses with our software. We load the software onto forklift-mounted computers, and those computers communicate by radio frequency, allowing our clients immediate access to updated inventory. Up until now, warehouses haven’t been able to use computers in the way that we do. They can’t put wires down because the wiring would interfere with warehouse traffic. With what we do, there can be wireless communication from one computer to another in the warehouse.
Our first client was Borden. They were able to eliminate all of their food spoilage; because of us they no longer had to throw out their products. Another one of our customers was able to reduce their overtime by a half a million dollars per year because of us. What we do really has a dramatic impact on our customers.
The problem is, this whole process is extremely costly. Both the hardware and the software are very expensive. Even though it’s obvious that people really need our product, it’s difficult for them to justify the purchase of the product to their management. If people couldn’t justify the purchase, we couldn’t make a sale.
We created a formalized ROI (return-on-investment) process. We actually come in, free of charge, and analyze the warehouse and document all of the data we collect. We have created a formal financial model that calculates how much can be saved based on the existing environment.
I like to think of it as a partnership we create with out clients. Not only do they end up seeing for themselves how much they can save, but they end up with a much better understanding of their own environment.
The added bonus is that through this process we have learned much more about our customers’ needs. We end up better able to fill those needs, because from the beginning our relationship is based on our being able to understand their environment. This kind of communication makes us a better company. It helps us stay on the edge, and we are able to react to market forces faster.
