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MAY 2012 issue of
Rental Management

Supplier Profile: Doosan Portable Power — Building relationships
Supplier Profile: Doosan Portable Power — Building relationships

Editor’s note: Shawn Sweet was named president of Doosan Portable Power, Statesville, N.C., in June 2008 and has spearheaded the company’s branding transition from Ingersoll Rand to Doosan Portable Power. Sweet earned his degree in civil engineering from the University of New Brunswick in Canada in 1985 and initially served in the Canadian Air Force. “I wanted to be a pilot,” Sweet says, but his career path went in a different direction after he left the military and joined Ingersoll Rand in Montreal in 1990. The company later moved him to Vancouver, British Columbia, Canada, where he was a regional manager, and then he became a product manager for soil compaction in Shippensburg, Pa., before becoming marketing manager for North America. In 1998, he moved to Houston to work with company stores and became the Southwest regional vice president for company stores from 2002 to 2005. He later became vice president of sales and marketing for Ingersoll Rand and moved to Charlotte, N.C., and then joined Volvo Construction Equipment as vice president of managed channels in 2007 at the time of the Volvo acquisition of the Ingersoll Rand road development business. He became vice president of global marketing for Doosan Portable Power in January 2008 before being named president less than six months later. Outside of work, one of his passions is hockey. “I’ve been playing hockey since I was two years old. Every Sunday night, I go beat myself up. I play a lot of tennis, as well. It’s something new in case I have to quit playing hockey,” he says. Sweet recently talked with Rental Management about the challenges Doosan Portable Power faces in today’s marketplace as well as how the equipment rental industry fits into the company’s strategy. An edited transcript of that conversation follows.

RM: The economic recovery has been slow in construction, but there are some glimmers of hope. How did the economic downturn impact Doosan Portable Power and do you expect things to be better this year?

Shawn Sweet: We had modest recovery in 2010, but 2011 was substantial. In North America, we started seeing purchasing coming back, not necessarily construction-related, but those involved in industrial or oil and gas-related businesses were re-fleeting. Rental companies in every scope and size also were starting to buy again, while smaller companies have been more conservative. In our business, we touch independent rental companies all over the world regularly along with large fleet purchasers, and we supply light towers, generators and air compressors.

Customers have started planning better out of necessity because the industry’s supply chain is totally fragmented. If customers are not planning effectively they’re not going to get product. No matter what company they source from, they won’t get what they need or quantities they need if they don’t have lead time figured in. We’ve seen a fundamental shift in the forecasting and planning from rental companies in general — particularly the national companies, and some independents and regional companies understand the need to do that, too.

RM: How does the equipment rental industry fit into this strategy and what percentage of your equipment is sold into the rental channel?

Sweet: I won’t provide an exact percentage, but it is equally as important as our dealer network in North America. Our original equipment manufacturer business is very large and we have some low-volume machines. Our highest volume products are 185 cfm air compressors and small light towers, and these are typically purchased in large quantities by various customers. For us, the rental industry is an important relationship and we like the intimacy of our relationship with customers who are involved in rental. We’ve been involved in The Rental Show for 49 years and we sell a lot of product at The Rental Show.

We also work with more than 350 independent dealer locations in North America. In the past, that was in conflict with the rental industry in general and they would compete. What we keep stressing is for our dealers to see businesses in the rental channel as potential customers. Our dealers can potentially sell machines to rental companies because dealers have the inventory. They also are the primary servicing, warranty and parts supply channel for this group if they choose to do so. We have other means to get parts to these rental folks, but the dealership would be the preference because they have everything and the rental customer would get better service. With a healthy dealer network, our rental customers are better served closer to their individual locations. They are working together more closely than in the past. That’s a push from us to our dealer group to get to know rental companies, build relationships and make that work.

RM: Do you see rental becoming a more important channel for you as time goes on?

Sweet: The rental channel and the dealer channel are both extremely important to us and we have to balance that. We also have dealers in rental. Other companies that have aligned with us are in the rent-to-rent business, they are members of the American Rental Association (ARA) and they almost fit the mold of a dealer if you look at the scope of what they are doing. For example, last year we set up Wajax Equipment in Canada as a dealer for a generator line. They do a lot of long-term large generator rentals and don’t compete with smaller companies. It’s different chemistry from a dealer standpoint and access to customers via rental is important. The conduit to get there — whether it is through an independent rental company, a national rental company or dealer rental fleet — we want to make sure we have access through all of it. We can’t favor one over the other.

RM: What are your key business concerns today?

Sweet: The emissions change to Tier 4 required a tremendous amount of research and development dollars. We’re very committed to it and we feel we’re further ahead on compliance than many competitors. We had a Tier 4 XP375 at The Rental Show. Last year, we launched three or four Tier 4 packages at ConExpo and we also displayed a prototype electric compressor. Compliance is a huge concern, along with equipment price increases of 30 to 40 percent. Can we get that or will customers want to keep equipment longer? There’s risk there. We also have a brand risk. In North America, we are very comfortable with the Doosan brand. In India and China, Ingersoll Rand is a long-term, well-known brand. Doosan also is well-known in China, but for mid-range excavators. There’s an expectation and we have a lot of work to do.

RM: What do you see as the short-term and long-term outlook for your company and for the equipment rental industry?

Sweet: We saw a lot of recovery last year and we have plans in place this year to continue our growth, so we’re looking at various ways of driving market share in markets that are underperforming for us. How do we launch new allied products into what we’re doing today? How is taking innovative technology into the market going to help us? We continue to start tapping into other applications for air as well. The Keystone pipeline project would represent a lot of compressors during the construction phase and then air would be used to clean and test the pipe. This is a huge opportunity for us and would aid in the employment of contractors to meet the market need. We also have to be flexible and adapt to the marketplace. There is a lot of optimism in North America in the near-term. Western Europe is cautious, but business is good and many companies have to replace old equipment or they will see their share of customers decline.

For the rental industry in general, we’re seeing a fundamental shift. More people are renting equipment now and they are not as comfortable about where their next contract or job is going to come from. Specialized equipment doesn’t lend itself that well to rental all of the time. You can’t get the utilization you need, but certainly for air products, there are many rental customers. A rental outlet with good fleet age, well-maintained equipment and the right types of products can meet needs of customers in close proximity and will do better than dealers in that aspect. They know how to get the product turned out and the volumes required.

Customers who are not comfortable with the longevity of the upturn want to rent because there is no capital commitment. They know the cost and may pay a little more, but if the equipment is well maintained and doesn’t break down, they have easy access, it’s delivered to the site and they don’t have to worry about anything. If larger companies get all the support they need from a rental company to the point of wondering why they need to own, that’s when we may see a fundamental shift to rental for larger equipment that nobody handles today. Not a single rental company we deal with has a fleet of articulated haul trucks, for instance. It’s the same for large excavators and large wheel loaders, but that can change.

RM: Is there an achievement or innovation made by Doosan Portable Power over the last five years that you are most proud of?

Sweet: I’m proud of the fact we’ve been able to develop Tier 4 products. It’s one thing to re-engineer machines, but what we’ve done in every single application is to spend time and energy to build a box with the goal of making it the smallest, quietest and most fuel-efficient we can. My challenge to the engineering team was just that every time. “How do we make this smaller if we can? Can we make this machine quieter? Can we use less fuel?” They would say, “We’re trying to cram all this in and you want us to do more?” That’s innovation for us.

We don’t have new funky levers, buckets or hydraulic cylinders, and it’s not interactive. The operator walks up to it, opens the door, pushes a button, it starts and gauges light up. We’ve added some interesting new systems with electronics and telematics, and Tier 4 has enabled us to do that. You can now walk up to a machine that is Wi-Fi-enabled and read diagnostics on your iPad or iPhone. We designed all the electronics behind it using off-the-shelf components and put it together into telematics that are easy and intuitive to use. We also have included analog gauges that are driven electronically.

We also have done a lot of work on cooling fans. One of the biggest contributors to noise on a generator or in a compressor package — apart from opening the valve and the air — are the fans required to cool everything. If you can get rid of fan noise, you can substantially lower dBa and reduce package size insulation to contain noise.

We have what looks like an aluminum fan that spins in the same direction, but it is wide and deep and the result is that it is extremely quiet. Typical cooling fans have a tip speed that approaches the speed of sound or surpasses that and in a lot of cases you get loud resonance going on that creates a lot of noise inside the package. We dropped the noise level by 4 or 5 dBa by changing the fan. That made everything else we were doing to the package much easier and that was a revelation.

We’re putting that fan in three or four different models now. We’ve taken the mandated emissions requirement and looked at adding other features and benefits that customers want. They didn’t ask for a new fan; they asked for less noise, less space and better fuel economy. The other offshoot of that fan is that it takes less horsepower to drive it. That means we can drop the horsepower requirement for the package and save 7 percent of the fuel. Things like that start adding up.

A case study in branding transition

For the last few years, Doosan Portable Power, Statesville, N.C., has been referred to as “Doosan Portable Power, formerly Ingersoll Rand.” This year, as the company approaches the five-year anniversary of being acquired by Doosan, it has dropped Ingersoll Rand and now uses a Doosan logo on its machines as the final step in its branding transition.

“We had five years to utilize the Ingersoll Rand brand on whatever we needed to,” says Shawn Sweet, president, Doosan Portable Power, who has been shepherding the name change and branding strategy since mid-2008.

“The goal was to get people to understand something had changed. Doosan now owned this business and that gave us talking points with our distribution network and customers around the world. All these things are part of the brand package. For us, this took a long time,” Sweet says.

“We had a lot of discussions, internally and externally. Our customer base and dealers were very supportive. They knew a change had to be made in five years. The advice we got from a lot of them was, ‘Do this slowly, don’t peel the band-aid off quickly.’ You have to build your capability, your relationships and your brand as yourselves first before the logo changes,” he says.

“We had a logo on the machines, but the brand we were trying to develop as Doosan Portable Power has a culture, as a business and as an entity around the world that had not been established yet,” he says.

The process of the company’s brand transition also is the topic of a branding case study published with the University of South Carolina and Sweet recently taught one of the university’s MBA marketing classes for a session.

The transition began when the company moved its headquarters and factory from Mocksville, N.C., to Statesville, N.C., in 2008 soon after the acquisition. The new facility was branded externally and internally as a Doosan facility, but followed the advice of dealers and customers by making the name change on the product a much more gradual shift.

“I purposely made sure we rebranded internally as much as we could with coffee mugs, shirts, hats, you name it. That’s certainly beneficial,” Sweet says.

“Phones were answered day one, ‘Doosan Portable Power, formerly Ingersoll Rand.’ We spent a lot of time on point-of-purchase displays at our dealers and stacking the logo Doosan with Ingersoll Rand underneath it. We sent new kits to everyone around the world who was a distributor. They were getting the linkage and the customers were getting the linkage. That’s what we were trying to build,” he says.

“At the end of 2008, we started putting a small Doosan three-square black logo on the bottom corner under the Rand portion on the machines we produced. That’s the only branding we did on the product,” Sweet says.

The company also decided to keep its unique chamfered corners intact on machines such as compressors. “The shape is critical because machines get painted various colors. Some customers will peel the logo off and put their own company decal on it, both contractors and rental companies, so keeping the same shape was vital to our brand,” he says.

They also decided to keep the beige color of the machines while the Doosan Portable Power logo evolved to use different colored squares behind the name. Last fall, Sweet says the company came to a juncture and decided it was ready to “peel off the band-aid” after four years and changed the branding on its machines. “We are now Doosan Portable Power,” Sweet says.




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