Toyota Industries Corp. (TICO) announced on February 2, 2017 the start of a new division, Toyota Advanced Logistics Solutions (TALS), affirming that the material handling industry is being significantly changed by the growth of e-commerce and omnichannel fulfillment. The new division will sell integrated automation and productivity solutions to North America’s material handling and logistics markets. The operation is separate from Toyota’s existing forklift business. TICO acquired systems integrator Bastian Solutions LLC (Bastian), based in Indianapolis, Indiana in the United States (US) in order to provide the foundation for that business. In the not so far off future, TICO expects to make further acquisitions.
The new president and CEO of TALS is Michael B. Romano, will start in his new position on April 3, 2017 after resigning as president and CEO of Chicago, Illinois, US-based Associated Integrated Supply Chain Solutions (Associated). Associated is a lift truck dealer for The Raymond Corp. (Raymond), based in Greene, N.Y., US, that provides facility and distribution network design; equipment optimization; engineer for labor management; systems integration; aftermarket services; and other types of warehouse equipment. Raymond, a minority stakeholder, will receive Romano’s majority ownership in Associated when he sells his stock.
Associated had acquired Peach State Integrated Technologies in 2013 which was a great part of Toyota’s decision to create TALS, according to Romano. Because Raymond is owned by Toyota, Associated lift truck business has a longstanding relationship with the TICO, a major Japanese industrial player.
Romano continued, stating that, “Toyota became interested in the drivers for that acquisition—the current and expected growth of e-commerce—combined with labor shortfalls. “The distribution model needs to change to accommodate e-commerce, which is labor-intensive because you’re handling eaches. But the labor force is not available for that, so many companies are looking to automate.”
Toyota decided that a strategy similar to Associated’s should be “a very important component of their own strategy,” according to Romano, after they researched market trends.
Dematic, a systems integrator and equipment provider, was acquired by German forklift company Kion. Kion, which is number two in global forklift sales behind Toyota, which is consistently number one in forklifts, “confirmed that what we did at Associated really had market credibility,” Romano stated.
Romano said more acquisitions will follow that of Bastian, and that TALS “will not necessarily” compete with Associated and Peach State. One of Romano’s goals is to “assess, organize, and then to align all current competencies in this space within the Toyota enterprise. We will take people who are doing (the kind of services provided by TALS) today and try to assimilate those competencies under the TALS umbrella,” he said.
“We will rely on the strength of the Toyota enterprise to provide after-sales support,” he said, continuing, “that is something no one else has,” affirmed Romano.
In discussing what he believes is TALS’ main advantage against the competition, Romano noted that its ability to provide comprehensive solutions that encompass everything from “front-end” consulting services (such as for workforce management) to aftermarket support for the equipment and systems that it implements.
Changing from selling and servicing equipment to being a provider of comprehensive solutions “is a transformation I believe is needed to stay relevant,” Romano said, and in order to do that companies need to be “getting out ahead of the market” and giving the value in customers’ future needs, as well as by responding to current needs, he said.
Romano said he expects that TALS will have whatever it needs in order to grow, eventually becoming the global leader in comprehensive material handling solutions. This is given Toyota’s objective of being the number one player in every space in which it competes.
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