Scope #02

Marubeni-Komatsu

Constructing the UK’s future

Breaking ground for the 2012 London Olympics stadium was a mammoth job. To dig a hole for the foundations in the heavy clay soil of East London took 150 heavy-duty machines supplied by Marubeni-Komatsu Ltd (MKL), the UK distributor for Japan’s biggest construction equipment manufacturer.

MKL was chosen for the job by construction company Hawk Plant because of their superlative service and equipment. Due to high-performance, fuel-efficient machines and a reliable team of field service engineers, construction companies in the UK know they can count on MKL to get the job done.

“Their back-up and reliability have been second to none. Whenever we do need any servicing or we have a breakdown, their response is almost immediate,” says Dave Rogers, operations manager at JPE Holdings in the West Midlands.

Marubeni-Komatsu Ltd was founded in 1972, with Japanese trading company Marubeni taking charge of the UK's distribution for Komatsu Ltd, the second largest construction equipment manufacturer in the world. MKL is now one of Komatsu’s premium partners and has been awarded a platinum membership by Komatsu Europe.

The UK construction market is a mature one. Much of the work is updating older infrastructure, such as making motorways “smart” by fitting them with sensors to electronically control traffic and introduce variable speed limits, while the number of newly built houses, offices and public buildings is relatively small. More of them are built when UK GDP is growing, which means that the construction market is tightly correlated to the strength of the economy.

For example, sales of new machines were very high in 2005 to 2007, when the UK economy was booming, but MKL faced a lot of difficulties in 2008 and 2009 in the wake of a global financial crisis.

“In order to improve our resilience to such a cyclical business we now focus more on the service side,” says Kaz Kondo, chief executive and chairman at MKL.

Concentrating more on services, which brings in steady business, rather than focusing on sales of new machines, has enabled MKL to recover and achieve stable annual growth since 2010.

Changing the culture, sparking an internal revolution

In Japan it is often said that the customer is God, implying that the customer is always right. But Kondo puts it another way.

“The customer is king,” he says. “Kings don’t just listen to us; they also ask and demand things. But that is also good training for us. As they’re the center of our business, we want to maintain the relationship and create value for each other.”

So what is the priority for customers?

Quite simply: to keep the machines working well and avoid downtime. Then, to attain better productivity and efficiency. Achieving that takes regular and reliable maintenance, which means MKL will interact with the customers on a regular basis, over the entire lifetime of the machines, rather than just at the time of the initial sale. That creates the challenge of shifting from a mindset focused on a single transaction to one focused on constant interaction.

Because of that, MKL decided to shine a spotlight on the service team and let the entire staff understand the importance of customer satisfaction to the business through MKL’s mission statement : “We will make good products even better”.

A new recognition program for service engineers known as the “Golden Spanner” was also introduced in order to boost customer satisfaction. Every month, a service engineer is awarded for outstanding service and receives a reward, a trophy and a decal for the side of their van to advertise their expertise. This has boosted service engineers’ pride in their work.

“The service team also plays a big sales and marketing role,” Kondo says. “We say that the first machine is sold by the sales team, but the second is sold by the service.”

Technological innovation and "KOMTRAX"

MKL supplied all its mechanics smart phones and laptops to enable them to stay connected while in the field. They can access KOMTRAX, an innovative system that uses GPS to track where and how machines have been used, helping them to identify how problems occurred (overuse on a hard rock, for example). It can also help the service operator to schedule maintenance appointments at exactly the right timing for the machines.

“Thanks to KOMTRAX we tend to get to things before they get too bad. Monitoring the machines with GPS is really a useful tool, and it helps a lot. In the past, finding their location was really a big problem,” says Dean Meeson, a field service engineer at MKL.

Multi-year maintenance service

Another change was initiated to ensure a steady stream of revenue: bundling multi-year maintenance contracts with the sale of a new machine. The sales team now markets the contracts, instead of the parts and service sales team. Just as with consumer smart phones, trying to sell a warranty halfway through the contract wasn’t working very well. Before the initiative was started in 2011, only 20 percent of new machines were sold with maintenance contracts. Now that percentage is over 60 percent and is heading for 70 percent. Sales of extended warranties, which cover whatever period customers request, have doubled and are expected to reach almost half of the new machine sales.

Smooth logistics throughout Europe

Ensuring high-level customer service involves getting the basics right: when a customer orders a part, it’s delivered the next morning, even on Saturdays. Achieving this means having tight control over logistics at the MKL warehouse in Redditch, where about 20,000 line items of parts are stored. Anything not kept there is ordered and delivered from Belgium on an overnight truck and sent by courier to the customer.

Friendly to the environment

To meet increasing global environmental concerns as well as the needs for better efficiency, Komatsu developed hybrid machines, which reduce fuel consumption by up to 40 percent and an average of 25 percent. Komatsu introduced its first hybrid machine over a decade ago, with competitors following only recently.

The next generation of Komatsu customers

Until now, most British children would have found only homegrown brands of digger toys at stores. But the next generation may have “Komatsu” on the tip of their tongue when they think of diggers: Marubeni-Komatsu has recently won a contract to supply machines to Digger Land, a theme park, where children (and their parents) can sit in the cab of stationary machines and dig away to their heart’s content.

All information contained in this article is based on interviews conducted at MKL in June 2016.

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