The business and social context characterized by the present rate of changes represents a danger for all of the companies failing to realize the importance of creating value. The search for a unique approach to finding better ways for a company to build its competitiveness has led us to incredible realizations, not only in the field of our business, but in society as a whole. What sets us apart are our employees whose loyalty, trust, diligence, and knowledge contribute to the growth of economic and, much more importantly to us, human values on a daily basis. We have never strived to be the best, and our strategy reflects that. What we believe in and what we stand for is to be unique and to leave this impression on our clients. With extensive competition and advanced technologies, it is now possible to copy just about anything – from products to services and business models – but the impression the client gets using the solutions we offer cannot be copied and remains imprinted in the memory.

IDMS – (In)Dependent Modular System is a concept we used to build the LTC business model. IDMS is a system of carefully selected products and services yielding above-average results in a unique value chain within the domain of internal logistics. All the brands we work with are premium brands whose complementary nature fulfills the requirements of the “job” that needs doing. The requirement of the job in our industry goes far beyond the selection of a brand. According to the latest definition, it is “the transport of freight from point A to point B, with the lowest exploitation expenses, high performances, no delays, and safely”. Analyzing the requirement of the job, we have found a way to employ the synergy of modules, to be able to provide a unique value offer to those using our products and services. It is a top-of-the-range set of products and services accompanied by unprecedented performance and the lowest exploitation and ownership expenses within a 3- to 5-year period.

Mr. Aleksandar Peters, CEO and Mr. Stefan Fijala, Executive Director at Lift Truck Co. d. o. o. speak to PROFIT magazine.

How do you measure your success?

At the point we realized that being the best is not the most important thing because, as a matter of fact, there is no such thing in business, our strategy boiled down to focusing on being unique to allow the business model as such to work. This point of view poses a key question to be able to apply any business theory and strategy in the first place, and that is: How do you measure success?

How do you know whether the company is moving in the right and desired direction, whether your strategy is successful or not, and how companies really measure success in order to ensure continuous growth of their business? Is success measured by profit, turnover, or by free cash; or is it reflected in the new tasks for the following year? Is success measured by the employment of 23 or 230 new employees, their degree of education, innovation level of process, product or service? Certainly all of this and more, but it is directly dependent on the status of your company at a given moment. Here we come to the delicate phase in which it is easy to focus attention in the wrong place, because if we measure success in the wrong way, the consequences can be huge, but analyzable, and it is a trap that even the largest companies fall into.

Certainly, it is the the largest challenge we come across, not only in our country, but also when we try to apply the business model in different areas, different countries and under different conditions.

Business strategy - the concept of value creation

Stefan Fijala: I would like to clarify this. As our finance professors advised us, measuring is very important. However, all measurements, from measurement of investment returns to measurement of investment returns through capital investment, are only metrics.

Those metrics offer managers the possibility to play, that is, to calculate and present the results they think are the best.

And this is the way managers lose their working function because they fill in reports and excel tables, which is not the job of a manager. In a social context, all those wrongly set measures have their consequences in higher unemployment.

Innovation cycle

What is the real job of a manager?

Creating a suitable environment for developing innovations and setting a success measurement system. A manager’s job is to synchronize the entire system for the purpose of identifying and creating a value proposition for the end user.

In the innovation system, only disruptive innovations open new markets and raise possibilities for new workplaces. If we regard the market as cyclical circles and imagine that the wealthiest users with the most demands and requirements are at the very center of those circles, most companies design new products or services by adapting precisely to that segment of the market. Traditionally, we think of them as our best customers. The power of a disruptive innovation is that it can take a certain product or service that has thus far been unavailable to the majority of users and make it available. These innovations are not that common and that is why they are so successful when they do happen. Unlike the disruptive innovations, the next one in the cycle is the sustainable innovation, which improves a certain product compared to the previous one. Whether it is the functionality, design, characteristics, or anything else that improves it in a certain way. At the same time, when we create a new product and launch it to the market, the company has no intention of continuing the sales of the old model and withdraws it from the market soon. That means that new production plants will not be opened because by now the old product was replaced by the new one. Finally, in order to further increase a company’s efficiency and profit, efficient innovations were introduced. They make it possible to reduce the production time from three months to three weeks, etc. By implementing an efficient innovation we wish to achieve a fast return on project investment and that is understandable. However, if we look at the larger picture, we know that a certain number of workers will be laid off due to the process automatization and the increasing use of technology in all processes.

By following the financial metrics we set out, as taught by our finance professors, and now advised by our financial consultants, we are very prone to frequently return to the development of efficient innovations in order to further increase the capital, even slightly. In developed countries, the cost of capital is close to zero. The problem occurs when we need to use it, and this is actually the core of the problem that mankind faces today. The capital is concentrated in a single location, available only to a very small number of companies.At the same time, when you need funds for a long-term, and therefore socially affirmative project, we have a problem caused by the unavailability of the funds. Unfortunately, only these types of projects create new markets, increase the possibility of employment, and directly influence the inclusive growth.

IDMS concept and advantages of the modular concept

Aleksandar Peters: For us, the IDMS is also a portal for ethical and natural business and cooperation. For the customer it represents the ability to take advantage of the modular concept, no matter which machine is being considered, while ensuring his company a strategic benefit.

To put it simply, in the Wheel system module, for example, our tire is innovative and is produced by the world's best manufacturer in the value ratio which gives the proportion that in a 5 year-period your equipment will consume 20% less tires for the same performance, which, for example, means that instead of replacing 5 sets the same job can be done with 4.

Or the Energies module, which has a positive environmental impact through the regeneration of the battery, and also results in doubling the battery life. Therefore, we save double the amount of resources, and reduce contamination of the living space by half, and finally, offer the user the possibility to use the energy sources over the long term. Of course, the end user has significantly reduced costs of ownership for his equipment.

Consulting and optimization of logistics processes

The third module LTC Consulting, which refers to consulting and the optimization of logistics processes, opens a window for improvements and savings and constant healthy innovations, which would optimize your business and improve the complete logistics and production processes, providing increased productivity along with significantly lower costs.

Naturally, all IDMS modules are related to the machine itself, while we use a clear and unique business philosophy as a catalyst.

Quality growth is surely not possible without anchorage in the consulting approach and differentiation with regard to the market in which the business is conducted, without focusing on the sale of goods and services, but exclusively on the job to be done, in order to raise the creation of value to its desired level. By analysing the value proposal, it is possible to clearly see what the buyer expects, and “what kind of a job needs to be done”. On the other hand, by looking at the profit proposal, we will surely find ourselves in the wrong place, where there are unfortunately a large number of companies which deprive themselves of productive communication, by simply exchanging it for trade, which is not our idea at all. The idea is to see which value developsbehind it, and to avoid becoming a non-cost based part of the company which has been forced to deal with transport, since it has to warehouse its goods, but instead we want it to become a part of the profit. We will ensure savings, secure the process, and the safety, and most importantly, the possibility for our clients to focus on their job, in which they are professionals. We also do the same for our clients, as professionals in the field of intralogistics. I believe that having such an order in business, and in general, is naturally and perfectly balanced. Therefore, the result of such an approach provides the best feedback to the client, ourselves and to the whole company, as well.

In an operative sense, we are able to notice all problems in real time, and the client can see the status of his vehicles at any time, thus turning yesterday’s cost into today’s profit.

Strategic benefits

The activity, efficiency and reliability of the IDMS system can be best seen in terms of renting/hiring, i.e. when a company hires equipment (forklift trucks) with no investment or ownership, on a daily, monthly or multi-year basis. The experience and results oflong-term rentals (from 3 to 5 years) in the last 3 years, since we have started implementing the IDMS concept, have shown the remarkability of such a business model. Having 300- 400 forklift trucks for long-term rental with complete service is an excellent result for such a small market, and a completely clear trend.

Aleksandar Peters: What actually is renting? Renting is a basic need of a growing economy, whereby a user does not invest in fixed assets, there is no depreciation, and no costs of purchase, sales or expenditure, and it operates outside the sphere of risk and potential loss in terms of the cost of ownership (TCO – total cost of ownership).

Rent is a good investment because the company initially does not invest its resources, but has all the necessary equipment, which is a huge saving. In the first step, the client does not invest money, but gets the best equipment for the most suitable time period, meaning a long-term lease, whereby, for example, FCA Srbija will secure for itself all of its logistical means for a period of 5 years, and companies like Vibac Balkani, Johnson Controlls, Magneti Marelli will secure for themselves safe, operational and available logistics. As a rule, long-term rental comes with full service during the rental period, which allows extremely precise budgeting of costs.

In combination with the forklift rental contract, an optimum full service agreement is also made to match the client’s working needs, by means of which the client is completely protected against any additional or unplanned costs for the forklift itself, unless the costs are caused by an accident. One part of the contract is the service performance, including not only repairs but other services too. Another remarkable advantage for the end user is the lack of any credit exposure, since we provide financing with financial partners, and the customer receives the final product, along with its fixed monthly costs and 100% availability and operability.

Stefan Fijala: Via IDMS, we not only facilitate the client’s path to final products, without the need for collateral required by leasing companies and banks, but we also directly influence the growth of their profit. A large number of our customers are on the stock market, which means that any commitment of funds, that is, borrowing, causes a decrease in the value of their shares. At a time when you should capitalize, you are already at a loss due to the depreciation, which nullifies the fixed asset value.

Aleksandar Peters: When companies invest in fixed assets, they automatically block capital, which is always needed more for new quality personnel, innovations, turnover, developments, raw materials, production, and materials.

Uniqueness strategy

When it comes to strategy, ours is based on uniqueness, and we have also defined our mission, vision and strategy according to the same principle. Our mission is to create strategic advantages, and the connection of quality products and services related to internal logistics by delivering unique solutions. That is our mission. That is exactly what we want to offer our customers. Our vision is to redefine the natural branches by creating new generations of products and services in the field of interlogistics, ensuring the delivery of unique value for our clients.

Logistics – the potential of the future

Since 1997 we have noticed that there are certain aspects of this industry that are at a standstill, that is, that some wrong solutions are still in use, but that definitely has to change because logistics really is the potential of the future, that is, it is an area where the greatest savings will be made in the future. The improvement of logistical processes presents a possibility for enormous savings, which, interestingly enough, are not related directly to savings within production.

Companies are becoming increasingly familiar with outsourcing trends and they know that complete logistics should be delegated to professionals who specialise in the improvement of the logistical process.

We are on the way to doingthis through our vision, and that is what we want to do. For this reason we have also created web-based after-sales software – LogiMIND. Now, for the first time ever we can track a forklift’s path, from the moment the customer acquires it to the end of its working life, and with a simple click of the mouse, we can gain complete online insight into the forklift’s status in real time, its operational/service status, an overview of incoming services, analytics, as well as the possibility to communicate with the service team, which reduces response time to just 1 hour. It is interesting that the recent LTC standard was 24 hours, which is the standard throughout the industry! These are the types of strategic advantages we are talking about when implementing the IDMS business model in the right way. Neither the user nor ourselves find it acceptable to have the equipment stay unused for 3 days due to malfunction, so we need to think that through on time. The IDMS system analyzes precisely those types of events and it will predict the necessary steps. The IDMS provides us with information when it is necessary to create a service center at a specific location so that we can meet the user’s requirements. The IDMS communicates with the market and provides us with feedback on what needs to be done and where, so that we can efficiently implement the necessary systemswithout jeopardising other processes and the company’s business activities, while simultaneously creating value and ensuring profit, both for the client and us, and society in general.

The values of our company

Stefan Fijala: Our employees are our greatest assets, and transparency and trust, upon which we have laid the foundations of our business, entail creating a unique business culture necessary for transforming the whole of society into something better. The human dimension in business is extremely important to us, nothing could work without people.

Aleksandar Peters: A company consists of people and that very fact is directly connected to life. We did set a parallel that a philosophy applied in life can absolutely function within a business model, while discoveries made here can automatically and safely be applied in one’s life and family.

How did we, in fact, come up with the idea for the IDMS model? We observedbusinessphilosophies and placed them into the sphere of life, and took life philosophies and placed them into the sphere of business, while making sure that we did not create anything unnatural.

Here it was confirmed that the impulse of action, both in life and business, or in any other third correlation, or in human interaction, is completely the same. It is the moment when we, as people, change and become better by building better relationships with partners. We are, thus, safe, and the society becomes better. IDMS is a concept and a proof that real life values are also applicable in business.

Stefan Fijala: All ambitious people led by success or accomplishment will often use an additional hour when they arrive home to respond to e-mails in order to receive confirmation of their success, rather than invest this hour into their families.

Aleksandar Peters: If we do not invest in life, then we must ask ourselves what kind of life we are living. If we decide not to invest in our family and its strength and quality, the question is: where is our faith?

We, as people, want a confirmation right away that everything we do is the right thing. In that, we forget that the real joy is on the way to success. The journey is what matters , and reaching the destination is not that important, because it is guaranteed. Actually, the journey is the true life experience.

Application of the IDMS concept – rationality assessment

Stefan Fijala: Although we have only been applying the IDMS concept to the full extent for just over a year, our clients keep confirming every day that the concept is working. They have recognised the good nature and effectiveness of the business model and they testify to how good they feel using it. By applying innovation with specific and clearer benefits, we have additional motivation and live matter that gives extraordinary possibilities for progress. Finally, the confirmation is also in the statement: You made it! This is what we have been looking for!

Suddenly the business itself becomes more comfortable and different from previously. We deal with details in a professional way, but continuously manage the crucial issues and deal with important strategic benefits. This is the essence and the subject matter of our interests. The IDMS concept brings premium products to the client, that is, the most expensive and the most efficient product at the lowest price in comparison with much cheaper and inferior technologies on the market.

Our system provides us with the possibility of planning and investment at the right moment.

We may now proudly announce that STILL GmbH Hamburg, a leading logistics equipment manufacturer in the world, has recognised the extraordinary potential of the IDMS model for progress in the world market, and at this moment we are consulting and implementing the business model together in the STILL dealerships in our region, in Europe, and in South Africa.

Our values

And finally, we reach the answer to the question of what our values are, what we believe in, and what differentiates us from other companies. We believe that by applying corporative values we have a chance to create unique conditions for the whole of society.

LTC is no longer a company that sells equipment, but a system that is supposed to enable and deliver higher values with three-fold benefits: for the client, for the company, and for society.

This is exactly the reason why IDMS is much more than a business model – for us it is undoubtedly a concept for living!

Biographies

Stefan Fijala, Master’s degree in Economics in the field of Strategic Management. He graduated from the Faculty of Business Studies as the best student in his generation. During the studies he was awarded several scholarships, of which the most important are Scholarship from the Ministry of Education of the Republic of Serbia and Univerzal Bank. His professional interests and research areas are industry analysis and strategy formulation with a focus on creating a sustainable competitive advantage. He is an Executive Director at Lift Truck Co. Before that he worked as a teaching assistant at Belgrade Business School, teaching Management Information System. Within the research he led and participated in dozens of projects on strategy. During his professional career, he has participated in dozens of international seminars and he also went to prestigious Business School INSEAD to vocational training.

Aleksandar Peters, Bachelor appl. in Business Administration, Economics. He graduated from Intercollege, University of Nicosia, Cyprus. He is the founder and CEO of Lift Truck Co. During his professional career he was CEO at STILL GmbH for Serbian and Montenegrin market. He has participated in several international conferences and seminars on the management and development of business systems. He has led or participated in hundreds of projects related to consulting, screening and optimization of logistic processes. His professional areas of interest are strategy, logistics and innovations.