Survival Of The AIDC Integrator

What makes your company different from the thousands of other VARs or integrators out there? If your expertise is in AIDC (automatic identification and data collection), your answer probably shouldn't be the prices of the products you resell. After all, it's likely some bargain basement Internet site offers lower prices than you do on hardware and software. Instead, many VARs and integrators list repair services, testing, and/or a specialty within a particular niche of the AIDC market as distinguishing characteristics. Miles Data Technologies, LLC (Milwaukee) is one AIDC integrator that positions itself this way, and in doing so, is expecting to grow its sales revenue 24% this year.

Lead With Bar Code Hardware Service And Repair Abilities
To accommodate customer repair needs, Miles Data employs service technicians who go on-site to perform service work. For instance, Miles Data technicians are most often fixing bar code printers that have problems such as slit platen rollers or broken belts. Of course, customers could always send a broken product back to the original manufacturer for repair work, but that could mean days without the product. At Miles Data, once a customer reports a need for repair, a service technician is dispatched within 24 hours direct to the customer's site. "Customers are willing to pay for timely service and are less apt to shop around if you have experienced technicians on staff," says Miles Data President Robert Ladd. "In fact, we often lead with our service expertise when marketing to new clients."

During the last six months, many of those new clients have contacted Miles Data (after reviewing the company's Web site) specifically for service. However, this hasn't been the trend for the past few years. The strong economy in the late 1990s gave many Miles Data manufacturing clients false expectations of continued growth. These companies were buying additional AIDC hardware such as bar code printers to accommodate for what they saw as an inevitable future need. But when the economy slowed down, these printers were rarely used - if at all. This excess capacity in the marketplace resulted in fewer purchases of new printers, which contributed to the company's negative growth rate in 2001.

"In 2001 we found many companies were more inclined to fix their existing equipment than buy new hardware," says Gary Jahnke, Miles Data VP of sales and marketing. "Consequently, our service business grew significantly. And that's good news given the higher margins typically associated with service in the AIDC business."

Stay In Touch By Offering Ribbon/Label Testing
With the recent slow economy, many companies' sales are down, and as a result, the trend has been to try to reduce inventory. That translates to less demand for the consumables (e.g. labels and ribbons) related to the labeling of products. Nevertheless, Ladd states that currently 40% of Miles Data's sales revenue is from consumables-related sales. He says his goal is to have a 50/50 mix of consumables and hardware sales revenue.

Much of that success with consumables is related to the company's expertise in bar code label and ribbon testing. Jahnke says that approximately once a week Miles Data is contacted for a ribbon/label-testing project. For instance, he recently received a call from a customer who was having a problem with a polyester label retaining its ribbon image. In response, Miles Data technicians tested a generic ribbon that would withstand the user's scratch and smear test and gave a recommendation on a new label. Another example is a customer that had questions about adhering a label to shrink-wrap. Again, Miles Data submitted samples for this particular substrate, conducted label image (e.g. bar code) testing, and gave a recommendation.

"Sometimes we'll provide extra services like informing a customer of a new label adhesive that may cost less," Jahnke explains. "Providing these kinds of services is almost like conducting site surveys for labels. We are willing to invest the time on these extra services in hopes of keeping customers' business and earning their future business."

Harsh Environments Breed Business
Besides service and testing, Miles Data earns business by positioning itself as an expert in harsh environment bar code labeling. To do so, Ladd makes sure his staff is educated on current labeling products as well as some very detailed specifications for bar code printer ribbons and labels. Standards organizations that deal with harsh environment-related specifications include UL (Underwriters Laboratories), CSA (Canadian Standards Association), and AGA (American Gas Association).

Approximately once a quarter Miles Data is faced with a harsh environment labeling installation. For example, one client wanted to bar code a rack of product that was dipped into a preparation bath, plated, and cured. The customer wanted to track the rack as it traveled from one point to another in the process. The process involved temperatures of 500 degrees Fahrenheit for 90 minutes and exposure to various metals, minerals, and chemicals including nickel, brass, gold, and acid. The challenge was to come up with a tag and image that could be printed on demand, withstand the high temperatures and chemical exposure, and still result in high first-read rates for bar codes. Miles Data solved the problem with a system comprised of a Zebra (Vernon Hills, IL) 105Se printer, Nomex (made by DuPont) thermal transfer tags, and Dynic USA Corp.'s (Hillsboro, OR) Sirius HL-30 ribbons.

Investing In Your Staff Can Mean More Business
Ladd is concerned with employing AIDC-experienced employees and keeping them educated (frequently via vendor Webinars). Currently the company boasts three staff members who previously worked in the consumables business for both raw material manufacturers and label and ribbon converters. In addition, Jahnke has been in the industry for 17 years with a background in labels and marking systems. Ladd, who is the son-in-law of company founder Bill Miles, has 10 years of AIDC industry experience. Ladd and Jahnke also help add to the company's reputation as a bar-coding specialist by serving as featured speakers at the University of Wisconsin Management Institute's "Bar Code Applications in Inventory Control" seminars.

Although strong in consumables experience, two years ago Ladd realized that for Miles Data to become a real AIDC integrator, another element would need to be added. Namely, he needed in-house systems engineering. "We needed personnel who could understand a client's current business system [e.g. warehouse management system] and successfully propose a customized middleware solution for handheld terminals," Ladd says. "Previously, we partnered exclusively with another company for programming expertise, however, we wanted to be able to control this role directly and respond quicker to customer requests. Adding internal systems engineering expertise has accomplished these goals and added credibility for us as an integrator."

Face it, the channel is filled with impostors - companies that claim to be VARs or integrators but are really nothing more than e-fulfillment centers with catchy names and rock bottom prices. But these companies' true colors are revealed when confronted with customers seeking knowledgeable technical advice or specialized service. "There will always be a need for service and the detailed AIDC knowledge that only a true integrator can provide," states Ladd. "And that's how we're planning to grow our business in the future."