No more beating around the bush
Bush-Miller welcomes the competitive edge garnered by merger with Motion Industries.
By Susan L Srikonda -- Industrial Distribution, 3/1/1999
NEARLY TWO YEARS HAVE PASSED SINCE Bush-Miller, Inc. celebrated its 50th anniversary, and the company is poised to begin a new era in its history. Adding itself to the growing list of power transmission distributors recently acquired in the U.S., Bush-Miller has joined the Motion Industries conglomerate. The two companies settled the acquisition agreement in December.The acquisition of Bush-Miller will give Motion Industries a stronghold in the central Pennsylvania marketplace, an area of the country that is largely new territory for the company. The mid-size distributor also offers a strong customer base that encompasses a wide array of industries -- from food processing equipment to fabricated metals, paper products and aggregates.
"[The acquisition of Bush-Miller] enables us to grow into that market in a very positive way and to continue our expansion in the East," says Bill Stevens, MI's president. "It's a key part of our growth strategy."
So what motivated Bush-Miller, a successful, respected regional distributor with five branches and name recognition throughout its geographical area, to sell? President David Miller and other principals at the company were anticipating the future of the industry and its impact on their business.
For some time, Bush-Miller has fought to retain its lead in the market as it kept a watchful eye on local competition and, increasingly, on national companies moving into the area. National chains, Miller says, have typically moved into the area to service one customer. "Then once they're here, they have to justify their existence. They're not going to just sit back and say 'we'll just take care of this guy.' They go out and start making calls and try and develop more business," he says.
Despite its commitment to service, competitive operations and premier product lines, as a mid-sized distributor, Bush-Miller faced one distinct disadvantage in its fight to retain marketshare: the inability to service national accounts.
"That's probably the largest handicap of being a mid-sized regional distributor, " says Mike Anstine, vice president of Bush-Miller. "If a facility here in Lancaster or York wanted to give a power transmission contract for their plant facility here in Lancaster and their sister plant in Detroit, we geographically couldn't do it, so we'd be locked out."
The company's union with Motion Industries has eliminated that competitive disadvantage and is allowing Bush-Miller to retain its ability to meet the specific needs of its local market.
"We're very pleased with the terms of the agreement," Miller says. "It seems to be a wonderful merger of the way we do business. Motion Industries is expecting continued growth and because of the expanded product line and our ability to compete on national contracts, we certainly can be competitive now with everyone else. Motion Industries has a tremendously good name throughout the industry ... We should be able to take what has been offered to us and multiply that. Our growth should be better over the next couple of years than what we've been experiencing."
Interest in acquisition among small and mid-sized distributors like Bush-Miller is a paradox. On one hand, many distributors deplore and even fear the consolidation of their industry. On the other hand, they also recognize the inevitable shrinking of their ranks and, individually, are eager not to be left out in the cold.
It's not uncommon for the small distributor to aggressively pursue opportunities to sell, sometimes going so far as to canvas national chains with letters expressing interest in being acquired.
"If the offer was right, I think most independents in the U.S. are available for sale," Miller says.
And the winner is...
With small and mid-sized independents throughout the U.S. looking to sell, or at least not to be overrun by national chains, what was it about Bush-Miller that appealed to Motion Industries?
"Their reputation in the market, both with customers and suppliers, was such a wonderful fit with our company," says Stevens, "as were both the products they sell and the way they go to market and the way we go to market." Stevens says that the companies also share philosophies on issues like emphasizing customer service and providing training opportunities to employees in order to develop both their product knowledge and skills.
The qualities that made Bush-Miller a good candidate for acquisition are the same qualities that made the company a leader in its regional market for more than 50 years. Among those qualities are the company's commitment to quality, attention to detail and flexibility.
Bush-Miller has gone out of its way to put quality programs in place, though the principals have not felt that ISO certification was necessary. In 1993, for example, the company hired a consultant to help create things like minimum job expectations and performance measurement parameters.
"Benchmarking is really a basic part of our quality program," says Miller. "Unless you have some way to benchmark yourself, you really don't know how well you're doing or if you're improving. Our computer systems allows us to track 99 different areas that we watch to tell how well we're doing."
The company distributes a monthly letter to employees, complete with graphs and diagrams, that shows how the company is doing in regards to customer errors, internal mistakes, etc. The letter also includes a sales report that includes financials like corporate sales, branch sales, gross margin dollars, etc.
Disclosing financial information is another aspect of the company's efforts to create a culture focused on quality by demonstrating to employees the connection between customer service and the bottom line. The company's low employee turnover rate reflects the value of this open management style. With the exception of two retirements in 1997, the company's headquarters in York, Pa., has gone for nearly five years with no employee turnover.
Bush-Miller puts the same kind of effort into cultivating its relationships with its business partners. In fact, having well-established relationships with manufacturers like T.B. Wood's Inc., Martin Sprocket & Gear, Inc. and Rockwell Automation/Dodge has gone a long way toward contributing to the company's success.
"We have been very fortunate to have very long term relationships with the premier product lines," says Anstine, "that gives us tremendous benefit that we are an authorized distributor for the very top bracket of manufacturers in the industry. Up to now, we've focused on specific product lines with a few manufacturers in each one, but now we will be bringing a broader mix of products and additional manufacturers to meet changing customer demands."
"With our manufacturers, we probably have a better relationship than most other mid-sized companies do because of the years of experience and the stability that our company has offered: same product lines, same people, same way of doing business. I think that's important to the industry," Miller says.
Bush-Miller's suppliers have come to count on the company's commitment to their products.
Took Coder, vice president of sales for T.B. Wood's, which manufactures belted drives, flexible couplings and electronic variable speed drives, characterizes his company's relationship with Bush-Miller as one of strong, mutual commitments to a product line and the training necessary to sell it well.
"The other part of the relationship is that we've always had a relationship where we can be straightforward with one another about an issue and where we can work out any situation that comes up based on good business judgement and ethics," says Coder. "Also, they consistently educate us on what our customer wants and needs. So we have this true partnership: it's not just selling to a distributor and this product ends up somewhere out in space. They make sure there's always a value they perform as the intermediary between the end-user and us so that we can maintain and expand our business."
The value Bush-Miller places on the distributor-manufacturer relationship is one reason that the company has not been interested in joining a buying group or a consortium, a step which Miller and Anstine felt would severe their direct connection to their suppliers.
"When you have a strong relationship with a manufacturer one-on-one, you have much more bargaining power when a job comes up and you need a good price on something," Miller says. "If you're connected through a buying group, then all the power is at the buying group's headquarters 500 miles away and you don't have the same relationship with the manufacturer."
The company's commitment to providing its customers with flexible, dependable, quality service is an equally important component of its success.
Pfaltzgraff Co., which manufactures dinnerware, has purchased power transmission products from Bush-Miller for more than two decades. Roger Vetta, maintenance manager for Pfaltzgraff recalls a Sunday morning two years ago when an AC drive in the plant failed. Vetta called Bush-Miller at 6:30 a.m. and sent one of his employees to meet a Bush-Miller employee at a nearby branch of the distributor. Because Bush-Miller had the necessary replacement AC drive on the shelf, Pfaltzgraff only lost two hours of production time.
"They just seem to be there every time I need them," Vetta says. "I think sometimes you forget what good service is -- you tend to take them for granted a little bit."
Foodcraft Equipment Co. has been a Bush-Miller customer for more than 10 years. President Mike Curtis credits the company's service, prices, delivery and commitment to the customer for winning his repeated business.
"They actually help us do our business better," Curtis says. "They'll assist us in choosing components and will point out alternative components. They know us and our equipment well enough that they can provide service and make recommendations. They understand their products very well and that's important."
One of the things that Miller and Anstine hope their company will be able to retain in its new role as a division of Motion Industries is its ability to remain lean and flexible in order to meet the demands specific to customers in their market area like Foodcraft and Pfaltzgraff. Though that's not a small goal, if history is any indication, Bush-Miller will accomplish it with small, precise steps.
"We're dedicated to the small things that other people push aside," Miller says. "We're very intent on doing the minute things right. If you call us up and say 'this drive you sold us back in 1959, we don't know what it is anymore, can you find out?' Well, our customer orders from 25 years ago are all on record. That's the kind of attention to detail that's important. We're very careful to do the small thing right, because if you build the base properly, it helps the rest take care of itself."
COMPANY SNAPSHOT
Bush-Miller, Inc.
Headquarters: York, Pa.
Branches: Lancaster, Bethlehem, and Reading, Pa., Baltimore, Md.
Founded: 1947
Employees: 60
1998 Sales: $24 million
Primary products: Power transmissions, bearings, conveyors and components, and materials handling products
Web site: www.bush-miller.com
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