Associated Equipment Distributors (AED), headquartered in Schaumburg, Illinois, is an international trade association within the construction equipment industry that serves its members well. For almost a century, AED has epitomized the crucial role that distributors play in the American economy. And as its membership grows, so does its influence in working for the best interests of its members.
The manufacturing industry in the United States is the largest in the world, producing over 18 percent of global goods, and it is essential to the nation’s GDP. Manufacturing accounts for 12.5 million jobs, or 8.5 percent of the workforce (The Balance, January 26, 2018).
For manufacturers, being able to operate efficiently is crucial. One primary avenue for ensuring that products get to market and into the hands of consumers is through direct sales. However, this can prove to be a challenging option for a manufacturer, as it requires specialized knowledge in areas such as marketing and supply chain strategies, which may be neglected or overseen by sales executives.
Their other recourse is to turn to distributors who will handle the tasks that many manufacturers are not capable of or merely choose not to undertake. Because of this, the manufacturer–distributor partnership is crucial in helping both parties realize their ultimate objectives of increasing sales and profits.
Morton Hunter Sr. began his career in 1913 as a salesman for a machine distribution company, Kern-Hunter Inc. In 1914 he bought the company, and it became known as Hunter Machinery Company. He soon realized the need for a collective presence for distributors and established AED in 1919.
AED has been growing in services, strength and members since its inception, with the development of new programs and educational resources that “better enhance distributors’ daily operations,” says Sara Smith, AED’s director of marketing and communications.
Member companies include those engaged in the distribution – both rentals and sales – of equipment used in the construction, agriculture, forestry and mining sectors.
The Association has 775 members, of which 438 are equipment distributors. It also includes members representing service firms, manufacturers and financial institutions. The majority of AED’s members are in the United States and Canada. “We do have a few that are located in areas such as Saudi Arabia, Poland, Italy, Guam and the United Kingdom,” says Smith.
“In the past, the Association has catered toward heavy equipment distributors,” Smith says with regard to membership prerequisites. “However, in our recent efforts, we have really honed in on smaller dealerships to encompass everyone that is related with the construction equipment distribution industry.”
AED’s outreach resources include numerous events, such as its popular and educational AED Summit that brings together those with a vested interest in the North American construction equipment industry, namely dealers, service providers and manufacturers, all of which showcase their latest products and services. Manufacturers like to participate in these shows because it helps generate brand recognition. “They’re talking to their prime customers, which are the distributors,” explains Smith. “Manufacturers can conduct meetings and have that face-to-face interaction with various construction equipment distributors where they might not be able to connect on their own.”
Providing industry education is a core focus for the Association, as Marty McCormack, AED’s associate director of development and workforce education, explains. “We offer a number of different continuing education pieces for distributors.” Such educational resources include over forty webinars encompassing “a number of different topics. The webinars are on-demand, so that employees can go through at their own pace.”
There are also eight live seminars annually, covering a broad range of topics and self-study courses, similar to the on-demand webinars. These courses can “provide employees with certification in different areas,” affirms McCormack, explaining that there are eight certification classifications available to members.
AED’s Leadership Development Institute (LDI) was established in early 2017 and is a one-year program developed for young managers who are expected to “prepare for broader organizational roles,” says Smith. “This program enables students to strengthen their leadership abilities, deepen cross-functional knowledge and explore the strategic connection across lines of business.”
LDI incorporates a capstone project in which students assess the need for improvement and engagement of best practices at their own dealerships. LDI provides each student with an executive coach who serves as their mentor throughout the program, assisting with individual development plans.
According to Smith, through the LDI program, “students can learn from each other, whether that’s for personal growth or mistakes that have happened in the past. It’s kind of an open table. Everyone can come together and discuss areas of improvement and how they can grow as leaders. We completely sold out of our first program. So it’s definitely something that we’ll be implementing every year, because our members have found such great value in this particular program.”
As a trade association, AED serves as the heart of the industry and is well-versed in sector thinking and developing long-term strategies to aid in identifying emerging issues as well as possible solutions. This involves industry-specific research to establish a clear and broad picture of what is happening in the industry now and into the future.
McCormack explains that AED and The AED Foundation had commissioned a research report through the College of William and Mary in Williamsburg, Virginia. “The industry is losing potentially $2.4 billion a year in revenue because of the technician shortage,” he says. “This report really backs up the claims that we make. Then we talk to legislators and other stakeholders and distributors.” He explains that, in 2018, The AED Foundation will be commissioning a new report that will look at the numbers from previous years. “We assume the problem has gotten a little bit worse. Distributors are losing even more potential revenue than they were in 2015 to 2016.”
“That’s such a great number: $2.4 billion in potential revenue. That means that it’s also $2.4 billion in opportunity,” Smith adds. For this reason, AED and The AED Foundation have implemented one part of the solution in the form of the Certified Technician Program, which was launched in September of 2017. The Association approached colleges and dealerships and “actually created a program called the AED Foundation Certified Technician Program,” she says. To date, over 180 AED Foundation-certified technicians have completed the program.
In addition, The AED Foundation provides accreditation for high schools, colleges and technical schools. The AED Foundation Accreditation is an important credential for postsecondary community colleges and technical schools that recognize and value the importance of the broader, more complex and more sophisticated skills and knowledge sets, both technical and academic, that today’s diesel/equipment technicians require. When a college holds AED Foundation Accreditation, it represents an acknowledgment that individuals partaking in the program are “getting the highest technology education,” says McCormack. AED has evaluation team leaders assigned to each college to assist with the process and ensure that they meet all the requirements for accredited technology programs.
McCormack also says that such accreditation programs will bring more technicians “into the pipeline and into the distributorships as quickly as possible.” Distributors know, before the hiring process, that the technician with these certifications has a basic set of skills required for the industry. “We received a great response from dealerships. It’s something that they really asked of AED and The AED Foundation… It definitely can be a lucrative field. This is a field that has immediate job openings. It’s a bright future.”
AED’s government affairs program is “a leading voice for the construction equipment distribution industry in Washington,” says Smith. In 2017, the Association established its first in-house Capitol-based office, and in doing so, “scored major victories in the new tax law,” she says, “particularly by successfully lobbying for removal of a provision that would have prevented construction equipment dealers from taking advantage of one hundred percent bonus depreciation on new and used equipment.”
AED also has an annual Washington Fly-In at which lawmakers are present to listen to members’ concerns. “The Association’s senior leadership frequently meets directly with members of House and Senate leadership, White House aides, and senior administration officials,” says Smith. “These meetings have increased AED’s visibility in Washington, resulting in positive policy outcomes.”
AED’s 2018 legislative priorities arising from these meetings include pushing a major infrastructure investment package, advocating for policies to help address the industry’s skilled workforce shortage, providing regulatory relief to job creators, and working with Congress to make many of the temporary provisions from the recently passed tax law permanent before expiration in a few years.
“We have more than doubled our attendance at this particular event in the last couple of years,” Smith says of the Washington Fly-In, “simply because we’re providing the education and topics that the dealers want to know more about.
“We are fighting for our members,” Smith says. “If you have an issue, we are going to get to the forefront of that and help not only you but also your peers and other distributors who are more than likely facing those issues as well.”