On the cutting edge
Innovative service offerings keep Aronson-Campbell at the forefront of the Northwest market
By Susan L. P. Srikonda -- Industrial Distribution, 11/1/1999
In the fiercely competitive Seattle market -- where distributors fight to win the loyalty of buyers at The Boeing Co. -- Aronson-Campbell Industrial Supply Inc. continues to grow despite multiple rounds of vendor reduction, consolidation, and widely varying production cycles at Boeing, its largest customer.Aronson-Campbell accomplishes this feat, in part, by being on the cutting edge technically, offering customers such innovative services as fully automated tool crib distribution systems and grinding services. The other side of A-C's success is steeped in the tradition of what has always defined great distributorships: building strong relationships with customers and suppliers and maintaining a commitment to providing customers with the best value in terms of quality, cost and delivery.
In the words of vice president Bruce Buchberger, the guidelines for satisfying customers are relatively simple. "People like it when you make them more productive at their jobs. It's real simple: more parts, less time," Buchberger says.
Three heads are better than one
Two brothers, John and Joe, join Bruce Buchberger in the executive offices of Aronson-Campbell.
John, the oldest Buchberger brother and president of the company, entered the business, then-named Aronson Industrial Supply, in 1970 as an outside salesman after spending three years at Boeing as a purchasing agent. John and Bruce, who has a commercial banking background, bought the business in 1983 and renamed it in 1987 when they acquired Campbell Industrial Supply. Joe, the youngest brother, joined the company in 1988 after gaining experience in marketing at Clorox and today manages the company's sales and marketing efforts.
Although A-C is a family-owned business, it breaks the traditional mold of distribution businesses whose ownership is passed from generation to generation. The unique three-point leadership of the business has not gone unnoticed.
"They use the three brothers to the best of their abilities," says Jonathan Saada, vice president of sales for Hanita Cutting Tools, Inc., an A-C supplier for close to 20 years. "Bruce is the money guy, for example. They really fit very well into their three jobs.
"Here you have three brothers, it's family-owned, and their vision goes through all three major aspects of the company -- sales, finances and general management -- through the three brothers," Saada says. "It's the perfect situation. You don't have the irrationality of a one-man show. It gives it an equilibrium that you don't find often."
As for the brothers themselves, the triangle of leadership has been a natural progression.
"It's like the spokes of a wheel," John says, "everyone has their own specialties and their own accounts. It's a real balance. It wasn't by design; it was just luck. We're very fortunate. We like each other, we get along and we've been successful."
Technical offerings
One thing the Buchberger brothers all share is an interest in the technical aspects of the business, which has helped A-C develop its own niche as a technically oriented distributor specializing in cutting tools, although they offer a full line of industrial supplies.
"Our dad was an engineer at Boeing," Joe says, "so the engineering side of things is in our genes. We're all the kind of people who want to know how something is made."
That interest in technology has recently lead to a new program called "Automated Services" that has earned accolades from customers like Joanne Ellis, an MRO buyer for Precision Machine Works Inc. in Tacoma, Wash. Precision Machine Works is an aerospace machine shop specializing in exotic metals like titaniums used to make landing gear beams, struts, landing gear parts, seat tracks and more.
The Automated Services program combines tool crib automation software with touch screen hardware or hand scanners connected to vending machine-like dispensing stations or locker stations.
Precision Machine Works currently has three of A-C's vending machines on site, and has plans to add five more to complete its tool management program. A-C has been doing business with Precision Machine Works for close to 30 years, Ellis says, and was chosen to provide the tool management system because "they offered the best program with the most extensive product line. The technical support and services are one of the best things they have to offer," Ellis says.
"Our vending machines are a high priority," Ellis says. "They help us track our spending, control our inventory and track what it costs to make our parts. We're able to issue larger items out of our tool room and we have vending machines filled with smaller items that are site-specific. That's really quick and a time saver. The information goes into our computer system, and the vending machines are inventoried and filled and taken care of completely by Aronson, so that takes one more headache out of the whole system. It's really working well for us."
Boeing connections
The connection between Aronson-Campbell and Boeing is multi-faceted. Not only does Boeing continue to be A-C's largest customer, but many of the distributor's other customers, like Precision Machine Works, do work for Boeing.
"I would guess that Boeing is anybody's largest customer in the industrial supply business [in this market]," says Bruce. "Whether you're selling paper supplies or industrial products, it's probably like Detroit and the auto industry. If you're in this market, you're either selling to Boeing or you're trying awful hard."
As the biggest airplane manufacturer in the world -- Boeing will produce more than 600 planes this year -- the company carries a lot of clout with its suppliers and A-C has worked hard to make the cut as Boeing, like manufacturers nationwide, has worked to consolidate its supplier base.
"There's a lot of focus [at Boeing] on better managing costs," says Sam Godwin, superintendent of Boeing's cutting tool service center. "Boeing's really working hard at getting better relationships with its suppliers and wanting suppliers to help them come up with innovative ways to help them cut costs. Boeing's been around for a long time and we have the intention of being competitive for a long time in the future. The key for us is to manage and control costs so that we can predict what our costs will be and to keep our costs in a favorable range for our airline customers."
A-C efforts to provide an engineered product and to stay abreast of technology have not only kept the company on Boeing's preferred supplier list, those efforts have also won A-C the opportunity to represent Boeing in a unique partnership. Boeing selected A-C to market its cutting tool service center to other manufacturers and job shops that need end mills, drills, routers and other tools refurbished and re-coated.
Godwin says Boeing selected A-C as a partner for this new venture because their values closely matched Boeing's corporate values, and because of A-C's commitment to providing the "best value in terms of quality, cost and delivery."
"The way they handle themselves and have dealt with us as customers most closely resembled how we wanted to be perceived in the industry for our regrind services," Godwin says. "They're our point of contact. I wanted our customers to feel and perceive that they were getting quality service. Our commitment to our customers is quite high and it's very important to us that Boeing products are perceived of as being of very high quality."
Though A-C's relationship with Boeing is long, it is always subject to Boeing's production cycles. For 2000, Boeing has already announced it will limit production to 425 airplanes.
However, the long-term potential for Boeing is huge, Joe notes, particularly in the Asian market.
"Asia is their growth market in the next 20 years," Joe says. "China itself is really an untapped market. You get that economy rolling and they'll sell a lot more planes [in Asia]."
"We feel really good that we're still serving a market that's growing and it really should continue to grow into the next century," Bruce says.
Overall, the manufacturing industry in Seattle is simply holding steady as the city's equally famous corporate giant, Microsoft, spawns software industry growth which creates little, if any, new business for industrial distributors.
In part to compensate for the stagnant Seattle manufacturing market and for lulls in Boeing's production cycles, A-C opened its Spokane, Wash., branch four years ago and the company is looking for much of its future growth to come from its Spokane and Portland branches.
"We want to spread our geographic base. The marketplace in Spokane has actually grown because it's got affordable labor and benign tax issues. And it has a different customer base and that's healthy for us as well," John says. That market includes medium and small machine shops, aluminum industry, forest products industry, and government installations.
"We always keep our eyes and ears open for the right [market] opportunity," Bruce says. "The market obviously has to be big enough. Our niche is metal working and if the town's not big enough, it just doesn't make sense."
Striving for excellence
A-C's goal over the years increasingly has been to offer highly engineered products and the company made a recent push to hire salespeople with strong technical backgrounds, as part of their effort to differentiate themselves from their competitors.
"We're trying to sell a product that makes our customer actually more productive," Bruce says. "We've found that if you go out and make your customer more productive, business comes your way and it seems to stick with you. If you just want to go out and 'me, too,' then it becomes just 'where's the bottom of the price list?' It's worked for us, sales have grown."
A-C's commitment to providing extra value for the customer is appreciated by suppliers like Niagra Cutter Tool, which has sold its line of high speed steel, cobalt steel and carbide end mills, and milling cutters, through A-C for 15 years.
"They're a quality-focused distributor," says Sherwood Bollier, president of Niagra Cutter. "We see the relationship with Aronson as one where cutting tools are an important product that they bring to end users and they have both the selling expertise and the technical expertise to bring those products to end users. Today, customers don't need to be sold. What they need is technical or application knowledge."
Bollier notes that the distributor's role is vital to a manufacturer because it's the distributor who often helps customers qualify the brands of product they are considering.
"Aronson has had a long-standing relationship with Boeing and other customers. Those relationships are what give us access to the customer," says Bollier. "Of course, distributors today are really tracked on performance, bringing in the right types of products. They're also tracked on many types of services such as inventory and technical knowledge. Still, I think the thing we see is that good distributors, like Aronson, are still listening to their customers and doing the things they need, whether that's integrated supply, stocking, technical support or whatever. Aronson has always been able to emphasize those key things."
COMPANY SNAPSHOT
Aronson-Campbell Industrial Supply, Inc.
President: John Buchberger
Locations: Seattle and Spokane, Wash; Portland, Oreg.
Founded: 1890
1998 sales: $30 million
Employees: 42
Product categories: MRO supplies,
specializing in cutting tools and abrasives
Web site: www.aronson-campbell.com
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