Movin' up the line
Once strictly manufacturers' reps, machine component veterans J.R. Kuntz Co., Inc. move further into distribution with systems design
By Ken Brack -- Industrial Distribution, 10/1/1999
TONY BOITNOTT HATES THE HAND-HOLDING. When Boitnott, a senior manufacturing engineer at Copeland Corp., comes up with a rough design for new production equipment, he doesn't want to walk his distributors through the entire process of completing the design and adding components.He doesn't have to with J.R. Kuntz Co., Inc. The Dayton, Ohio firm, which has evolved from being a manufacturers' representative and today operates as a distributor for half of its business, is known for its systems design skills and know-how in a variety of machine components, specialized cutting tools and assemblies, automation and more.
The talents of J.R. Kuntz's salesmen and engineering staff complement their counterparts like Boitnott at customers' plants. Owner Larry Peters, for example is a former Chrysler manufacturing engineer and tool and die shop veteran; one sales engineer has designed equipment for machine tool and manufacturing industries. The company serves Kentucky and the southern two-thirds of Indiana and Ohio, and has built a broad customer base that includes the automakers, their parts suppliers and many specialized machine makers.
"I've worked with them for over 20 years and have been completely satisfied with their abilities," says Boitnott, who works at the Copeland plant in Sidney, Ohio where about 1,500 people make refrigerant compressors and related products. He says Kuntz has helped with special machinery, primary designing of fixturing, cutting tools, clamping and work holding systems and more.
"I try to use them a lot because I know what I can expect and it's quality work," he says. "And they're usually right in there with competitive pricing."
The $8 million company was started in 1949 by J. Robert Kuntz, a former General Motors engineer who was among the first to test out carbide for drilling gun barrels during World War II. (Kuntz, who is 84, may also be familiar to some as a longtime golf memorabilia collector who founded the Golf Collector's Society). Peters, who cut his teeth as a toolmaker, came to J.R. Kuntz as a sales engineer in 1969 and bought the company in 1983.
While the company continues to represent many primary suppliers -- including one of Kuntz's first lines, U.S. Drill Head -- under Peters' leadership it has moved heavily into distribution, which makes up about 60 percent of its income. Peters says the shift is obvious for two main reasons. Margins are a lot higher as a distributor and customers increasingly want the service and support from a distributor that helps them design special equipment such as metal cutting machines and computer controlled machinery.
Peters recalls back in the early 70s watching one of Kuntz's veteran salesmen make sketches for customers' systems and have them built at a shop. He saw the value in furnishing "everything [the end user] needed for a project -- a machine base, slides, spindles, whatever. He could place one order to us and we could pull it all together."
"Things keep moving in that direction," he adds. "People want you to take systems responsibility for different projects."
At the same time, Kuntz began picking up product lines that complemented each other, which naturally required Kuntz to take ownership of inventory and resell it, rather than be paid on commission with the principal supplier doing the invoicing.
"That's kind of what brought us into distribution," Peters recalls. "You had to be a distributor or you couldn't get the line."
Automotive customers and job shops that make parts for the automakers make up about half of the firm's customer base. Other key customers are special machine builders, small tool and die shops, other job shops, and other machine tool distributors and tool builders. The company has 13 employees and two Dayton facilities.
One of the suppliers the firm represents is Cogsdill Tool Products, an 83-year-old manufacturer of specialty deburring, burnishing tools, precision reamers and more. Kuntz and Cogsdill formed a relationship in 1993, and one of the results was Kuntz's acquisition of another manufacturers' rep, Techneering, Inc., which today is a division of Kuntz.
Cogsdill had acquired a competitor, Sandvik, Inc.'s Madison Cameron Division, which Kuntz had represented. Cogsdill then agreed to keep Kuntz as its rep. To accomplish that, Peters suggested that Kuntz buy out Techneering, a Dayton-based representative for Cogsdill, and did so in 1994.
Today Cogsdill considers Kuntz to be its exclusive distributor assigned to automotive and machine tool builders in southern Ohio. While Kuntz handles the billing for Cogsdill products, because of the specialized nature of the tools, it carries little of the manufacturer's stock.
Technical team understands needs
Gordon Robinson, vice president of sales at Cogsdill's northern region for automotive, says that while few distributors have become experts on how to apply his company's tools, Kuntz comes close.
"We tend to be a little bit choosy in the sense that we need someone who can devote the time to us because of the technical aspects of the tools," says Robinson. "These are sold to engineering people basically and require salesmen who have more than cursory knowledge."
"What we like about them is they have a very strong capability in terms of salespeople at our important customers," he says. "They do a fine job for us."
On the other end, several customers also laud J.R. Kuntz's performance.
Rick Young, a manufacturing manager at Flowserve Corp., which makes chemical pumps and related components in Springboro, Ohio, has worked with the firm more than a dozen years. He calls it "exceptional" in pricing, support and design capabilities. For example, Kuntz designed hydrostatic test equipment for testing pump casings and covers.
"In the old days we had a lot of time-consuming, hands-on tooling and fixturing to do that," says Young. "Working with us, they came up with equipment that takes a lot of the time out of it."
"They're actually technical people and they understand their products very well," he adds. "The follow-up has been excellent. Usually they don't leave me until it's right."
Ralph Forgy, a senior manufacturing engineer at Delphi Automotive's chassis plant in Dayton, says Kuntz provides personalized service. He says engineers there often rely on Kuntz for design help to build production units such as hydraulic-driven drills.
"We go back 20 years or more," Forgy says, referring specifically to Barney McClain, Kuntz's vice president of sales and marketing.
"It's been a good working relationship because he understands what I'm looking for. If I've got a technical question he can pretty much answer it."
In addition to hands-on technical skills, Kuntz managers tout tracking and reporting sales leads among their strong points.
"We think the key to our success is our ability to communicate with our principal to track leads down, and report them," says sales manager Dale Shields.
Taking direct hits
In some instances though, the firm, like other distributors, is forced to react quickly when a manufacturer goes direct with a product line. Kuntz reports success in retaining customers after the loss of two major lines in that fashion. Choosing a competitor's line and convincing customers of the product's value takes time and testing, Peters concedes.
In one instance, Kuntz is testing out a new line of PCD tools that cut aluminum and brass. It's been a long haul: in March, Kuntz had put 16 months of effort into that new tool line.
"Most of these products we're talking about are special, not standard," says Peters. "All you can do is keep trying and trying."
"A good way to keep your current product lines is to have a broader base of customers," he adds. "I think we're okay now, we've done that."
Meanwhile, Peters sees a bright future in distribution and the company joined the Industrial Distribution Assn. last year. As a small company, J.R. Kuntz needs to network with others and hear developments that may benefit it.
"I.D.A. has always put together terrific market information to help you understand how we stack up against other distributors," he says. "I think you have to belong to an organization that lets you network with other distributors and exposes you to other manufacturers as well."
This story was reprinted from ID's special convention issue for the Spring Convention of the American Supply and Machinery Manufacturers' Assn. and the Industrial Distribution Assn., published in May.
COMPANY SNAPSHOT
J.R. Kuntz Co., Inc.
President: Larry Peters
1998 Sales: $8 million
Founded: 1949
Headquarters: Dayton Ohio
Locations: 2
Primary products: Machine components, specialized cutting tools and assemblies, automation equipment
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