Detroit's best-kept secret

Reggie Ball's company, RB Industries, Inc., is meeting the challenges of being a start-up and landing minority-sourcing contracts

By -- Industrial Distribution, 11/1/2000

In three years, Reggie Ball has made the transition from the high-stakes world of the Secret Service to the high-powered ranks of business executives. Now he's growing his Sterling Heights, Mich.-based general line distribution company, RB Industries, Inc., into a force to be reckoned with in the Motor City and beyond.

After 23 years in the Secret Service, including missions in Sudan, Pakistan and China, Ball wanted a new challenge. At the agency, Ball rose to the position of jump team leader and coordinated about 80 agents for President Bill Clinton's trip to Sydney, Australia, in November 1996. Today, Ball uses many of the same qualities to run his company.

"I use skills like preparation, teamwork and coordination," Ball says. "Just like in the Secret Service, everything [in business] comes down to teamwork."

A mutual friend introduced Ball to industry veteran Larry Gniatczyk, who became Ball's mentor and helped him get his foot into the industrial distribution door. Since then, Ball has built his company on a foundation of strong customer service. A national contract with Lear Corp., a leading global supplier of automotive interiors, is the impetus for developing e-commerce capabilities.

As a minority-owned distribution company, RBI engages in some industry and government contracts as a certified minority supplier. Yet when talking about his company, Ball emphasizes RBI's customer service track record and technology infrastructure. And although the company is barely three years old, Ball is already in the midst of the ISO 9002 certification process.

"I'm not as interested in the minority part," Ball says. "I want to be a good supplier. I want to be on the cutting edge."

So far, the start-up is on the right track. RBI is a Tier 1 supplier to both General Motors for abrasives and DaimlerChrysler for commodities like bearings, hand tools and power tools. Other major clients include OEMs that serve the auto industry, including the Lear Corp., which is headquartered in Southfield, Mich., and Troy, Mich.-based Defiance Testing & Engineering Services, Inc.

Along with offering an extensive array of products, Ball strives for a broad customer base. RBI sells products to hospitals, local casinos and municipalities like the city of Detroit and the state of Michigan.

As Ball's expertise grows, sales are steadily increasing. In 1998, the company's first year, revenues were about $400,000. Sales jumped to $1.5 million last year and Ball expects to close this year's books with between $3 million and $4 million in sales.

Seizing opportunities

As a Detroit native, Ball has many friends and contacts in the automotive industry. In fact, Ball's father spent 32 years working on the General Motors assembly line and his mother worked at Ford for 23 years.

Ball's last tour of duty with the Secret Service brought him home to the Detroit office. While evaluating his future options, Ball learned about the opportunities available to minority suppliers.

Many OEMs, including the Big 3, set targets for the percentage of purchasing dollars to earmark for minority suppliers. In turn, these manufacturers often establish minority purchasing goals for their Tier 1 and Tier 2 suppliers. Dr. E. Delbert Gray, the president and CEO of the Michigan Minority Business Development Council, which helps pair minority companies with corporate buyers, says corporations increasingly recognize minorities' buying power.

"Minorities are purchasing more items across the world, so it makes sense for a company to do more business with minority companies than they have in the past," Gray says.

The Michigan council is one of 39 regional offices of the National Minority Supplier Development Council. Its goal is to have about 1,000 corporate members and 1,300 to 1,500 minority-owned business members by the end of the year, Gray says, up from about 650 corporate members and more than 1,000 minority business members this year.

Gray explains that minority entrepreneurship is on the rise because minorities now have more experience in corporate America and a higher education level. "They understand how to retain and satisfy their customers," Gray says.

Ball says he's faced his share of discrimination and barriers, but he says he asks people to judge him on his ability to provide goods and services. He recalls a meeting with another company president who didn't open up until Ball asked him about the bullet collection in his office.

"I have faced the minority issue all my life," Ball says. "You can either become discouraged or do something about it to help people overcome their fears."

A hand up

Although Ball lacked corporate experience, Brian Hart, the mutual friend who introduced him to Gniatczyk, says he saw in him the qualities for success. Hart, a district manager for Worcester, Mass.-based Norton Co., also says Ball's integrity deeply impressed him.

"He's so very honest," Hart says. "He's also very personable. I knew he'd do great in industrial sales."

For his part, Ball says he knew the transition from a law enforcement career to running a company would be challenging, particularly since his wife Leara was pregnant with their now two-year-old twins. In addition to Leara's encouragement and understanding, Ball credits Gniatczyk's support as a vital part of his transition.

"The only way this thing has worked is that I have complete access to him on a daily basis," Ball says. "I walk into his office and he'll walk into mine."

When the pair teamed up in 1997, Gniatczyk was owner of the Allar Co. and he reached a point in his career where he wanted to give something back. He began by sharing equipment and office space with Ball. Gniatczyk also gave freely of time and expertise through frequent discussions and by allowing Ball to shadow his sales reps and comptroller. As the months passed, Ball began making enough sales to rent the space and buy his own equipment.

"I started my business 25 years ago and [before that] I worked ten years for someone else," Gniatczyk says. "To grasp what he has in three years is amazing. He's still working ten and twelve hour days; nobody's pushing him but himself. He's very dedicated to this industry."

Before cementing the relationship, Gniatczyk wanted to make sure that Ball was committed to learning the business. The pair signed a contract to formalize their relationship, but both say they've never needed to look at it. Today, their relationship has progressed from strictly professional to a friendship, and both of Gniatczyk's sons now work at RBI.

"You can never explain what success is like unless you live it," Gniatczyk says. "To share it and see him enjoy it is a thrill."

In June, Gniatczyk sold Allar to Integra Integrated Procurement Solutions and is now president of Integra's Automotive Specialty Division. Gniatczyk allowed Ball to observe the negotiations during the merger and acquisition process to increase Ball's business experience and knowledge. This also gave Integra's top executives first-hand knowledge of the relationship between Gniatczyk and Ball. As a result, Ball explains, Integra will be introducing RBI to many of its national accounts to assist them in meeting their diversity supplier programs.

Learning with Lear

One of RBI's largest accounts is with Lear. Chosen as one of Lear's 10 key MRO suppliers nearly a year ago, RBI has a three-year contract to serve more than 100 North American plants. At press time, RBI had already launched 53 plants and is providing services like quarterly spending reports.

Chuck White, Lear's vice president of the minority supplier program, explains that Lear's supplier base had mushroomed in recent years due to acquisitions. The company combined the goals of reducing its MRO supply base and boosting purchases from minority owned firms by selecting four diverse suppliers as part of the group of 10.

Lear's goal is to purchase $250 million worth of goods and services this year from minority suppliers, or more than seven percent of total sales, White says. By 2005, Lear hopes to raise that number to $600 million.

White says RBI has really stepped up to the plate. "They were inventive enough to go out and figure out how to get it done because for the different types of products they have to handle, they have to have a lot of connections," White says.

The human network of interactions across dozens of plants is intricate enough, but the ordering system, which involves e-commerce, the Internet and procurement cards is even more complex. Thomas Smith, the vice president of operations/marketing, is spearheading the company's effort to convert RBI's system to a secure, online ordering system.

First, RBI is pairing up the internationally recognized United Nations Standard Products & Services Classifications with each item. Putting an item into the system requires entering 32 data fields, and in some cases, scanning an image.

Lear employees use a proprietary portal to click on what they want. RBI, in turn, issues the order to the appropriate vendor through gatekeeper systems powered by Datastream and iprocure. At the end of the month, Lear can write one check to its bank.

"Ideally, we want to take any catalog and punch in the order number and out pops the database," Smith says.

Working with about seven other employees in the "Lear Room," Smith's department has already entered more than 700,000 products, and he and Ball view this time and energy as an investment in RBI's future. Since the U.N. codes are a worldwide standard, Smith and Ball believe the information will eventually be useful for other accounts.

"We want to take what we're doing with Lear as a model," Smith says. "That's our competitive edge. We know how to do the long division. We've done all the work and done it completely."

Catering to customers

For Ball, customer service means helping clients solve problems on one hand and offering a broad array of goods and services on the other. RBI has a strong working relationship with Integra and several major catalog houses, including MSC Industrial Direct Co., Inc., Production Tool Supply, W.W. Grainger, Inc. and J & L Industrial Supply, which helps the company buy products at good rates.

"As companies start reducing the supply base, you've got to be a lot more to your customers than just selling cutting tools," Ball says.

Under the leadership of Dale DeWeese, the vice president of sales, RBI offers value-added services including tool repair, sharpening and grinding, bin stocking and automated crib management. Relationships with vendors allow RBI to offer manual translation services and construction rental equipment. "Big companies operate on a global basis," Ball says. "They need their manuals in other languages. I want to be in a position to provide as many services to customers [as possible]."

The service element is particularly important in a relationship like the one RBI has with Defiance Testing & Engineering Services, Inc. The auto testing company buys MRO supplies for its Troy and Plymouth facilities and some non-emergency items for its seven Westland plants.

Eric Reichert, a Defiance buyer, says RBI can obtain products more quickly and generally at better prices than Defiance can. Maureen Schwartz agrees, and says that the fast turnaround is critical in a business like theirs, even in cases where they might have to spend a little more for an emergency buy.

"We need it yesterday when something breaks," Schwartz says. "Every day that the test is running saves us a lot more money than a better price."

Ball adds that RBI will also direct customers to other sources if they are unable to meet a particular need. That approach is part of the personal service philosophy Ball preaches to employees.

"If you provide excellent service and people like you as a person, you will establish and maintain a good customer base," Ball says.

To be sure, Ball's sales, interpersonal and management skills have helped him establish a general-line distribution company in the highly competitive arena of Big 3 suppliers. It's those same skills, and the savvy to pick employees with strengths like technology expertise and a customer-service orientation, that will enable RBI to grow.