Selling Beyond the Motion Control
When times get tough, diversification keeps Volland Electric on track
By Bridget McCrea, Contributing Editor -- Industrial Distribution, 10/1/2003
When a motor sputters to a stop at the Quebecor World in Buffalo, N.Y., the commercial printer's engineering maintenance manager doesn't panic. He knows that the company's printing presses must work around the clock, churning out mass market books, Webster's Dictionaries, AAA tour books and other publications, but he also knows that the company's motors and drives are in good hands.
His confidence holds steady, even when a piece of equipment decides to take a break at 10 p.m. on a Saturday night. "For the last 20 years, we've been calling on Volland Electric Equipment Corp., not only to supply our motors and drives, but also to do all of our repairs, alignments and vibration testing," says Dan Nosal, Quebecor World's engineering maintenance manager. "When something goes down around here, we know who to call."
A subsidiary of Montreal-based Quebecor Printing, the world's largest commercial printer, Quebecor World often works on a "needed it yesterday" schedule for its own customers. Nosal says this puts additional pressure on the company's vendors to turn orders around quickly and sometimes show up at odd hours to fix a piece of equipment.
Nosal says Volland Electric's quick turnaround and superior customer service keep his firm coming back for more.
Quebecor World's most recent casualty was a 150-horsepower compressor motor that quit working one night at 10 p.m. Nosal says Volland Electric sent a truck out right away, picked up the motor and delivered it back to the plant within 12 hours. "In our business, a piece of equipment that goes down can result in lost money and time," says Nosal. "Volland Electric understands this, and they constantly rush jobs for us to make sure we get everything back up and running as quickly as possible."
Seizing opportunitiesBased in Cheektowaga, N.Y., with a location in Buffalo, Volland Electric got its start as a motor repair house in 1943, the year Alexander "A.T." Volland left his position at another motor house in the area to start his own company. His son-in-law, Richard Wagner (who has since retired), joined him in running the company until 1975, when another of Volland's son-in-laws, Ron Graham, took over as owner and president, a position that he still holds today.
The family atmosphere at Volland Electric expanded in 1993 when Graham's son, Chris, came on board, followed by his brother Kirk Graham, who joined the company in 2000 and serves as shop manager. Over the years, the family-run operation was deliberately transformed into more than just a motor repair shop and today stands as a motion control and power transmission distributor, plus more. Chris Graham, vice president, says much of the diversification is driven by customers' desire to reduce the number of vendors they work with.
To help customers reach their vendor consolidation goals, Volland Electric in the 1990s began selling new motors, controls, drives, transformers, welding machines and switchgear. "We're not just a motor shop anymore," says Graham. The distributor has an in-house machine shop and a crane and hoist division and part of its core business today is nationwide Servo motor repair. In 2001, it purchased industrial supply distributor Frontier Supply and one year later acquired Mead Supply, a construction equipment rental and supply company.
Graham says Volland Electric tested the acquisition waters because Frontier Supply was just about to go out of business. Already familiar with the company and its prior owner, Volland Electric's management team approached the firm's bank about a possible "Article 9 sale of assets" purchase. "The bank shut them down one day and we took over the next," recalls Graham. Then came Mead Supply, whose former owner was disillusioned with a drop in business and unwilling to continue running the company. "He wanted out," says Graham. "We were in the right place at the right time, so we bought him out."
The acquisitions and diversification of product lines and services have helped Volland Electric stay viable in a market where its large manufacturing customers have either scaled back severely or moved out of the area. "Over the last couple of years we have been really diversifying to try to increase our sales," says Graham, adding that the company's core business remains electric motor sales and repair.
Hard timesVolland Electric's combined sales for 2002 were $14.5 million — a number that the company hopes to duplicate in 2003 by serving the automotive, metal, food and aggregate industries in western New York and Northwestern Pennsylvania. Whether it achieves that sales goal will depend on its ability to sell as much as it can into a customer base that continues to struggle under the strain of the overall economic malaise.
"The economy has been hurting us, and everyone else in the area," says Graham. "Luckily, by acquiring those two companies we've been able to maintain our sales, which were in the $15 million range before the recession set in."
Graham considers his company one of the lucky ones, since many distributors have closed in the wake of the manufacturing exodus. He blames not only the economy, but also New York's high tax and utility base for driving some of the business away, and says new company announcements or relocations are few and far between these days. "We've seen a lot of our good customers shrink or vanish altogether — primarily industrial manufacturing firms from a variety of industries," says Graham. "And you rarely hear of a company moving into the market."
In addition to broadening its operations, the team at Volland Electric has taken other steps to set the distributorship apart from its competitors. In 1998, for example, it embarked on a two-year, rigorous ISO 9002 certification process in anticipation of its automotive customers demand for such certification in the near future. "We thought customers would be asking for it," says Graham. "We like to be proactive around here, staying at least one step ahead of our competitors, and we figured that ISO would help us in that regard."
So far, Volland Electric's customers have yet to require the certification, according to Graham, who says the company is somewhat disappointed that its anticipations have yet to come true. "We have large automotive customers such as Ford, American Axle and General Motors here, but so far they haven't made any moves in that direction," says Graham. "They seem to be pushing more ISO on the vendors who supply the raw goods that go into their products, but not so much on the service and repair firms."
Standing tallJon Siverling, a sales engineer with Greenville, S.C.-based Rockwell Automation, has been doing business with Volland Electric for 19 years and calls the distributor's diversification strategy a good one, particularly in a market where its core business has been adversely affected by the overall economy. "It helps get them into places where they haven't been in the past," says Siverling, whose firm manufactures loaders, drives and gearboxes.
Siverling says Volland Electric's competitive advantage goes beyond just diversifying into new lines of business, and adds that the company stands out in its knowledge and relentless attitude when it comes to sales and service. Take a recent project involving a manufacturer of air heaters for power generation plants. For about 18 months, Volland Electric and Rockwell Automation worked in tandem to get the latter's gearboxes into the plant. The work paid off this year when the customer placed an order for the gearboxes.
"Volland Electric was very persistent in working with us to get the right products into that plant," says Siverling. "What finally closed the deal was the distributor's persistence and the way in which it pushed that persistence through to the customer level."
Jim Benesch, sales engineer for Toshiba International Corp. in Buffalo, says Volland Electric also stands out in its ability to not only make commitments, but also follow through on them. A few years back, he says the distributor took the time to travel to Houston with representatives from Toshiba's industrial division, which manufactures heavy industrial equipment, to create a proposal that led to the two companies working more closely together.
Since that time, Benesch says the team at Volland Electric has followed through on all of its promises, and then some. "The company's inside and outside staff are top notch, very knowledgeable and very aggressive," says Benesch. "From top to bottom, they are good people working for a good company."
And Graham says he and his family plan to keep it that way. Looking ahead, he sees sales growth in the company's future, and even another acquisition, should the opportunity present itself. "We definitely expect to grow our sales numbers across the board and we're also working hard to develop new business," says Graham. "And while there's nothing on the table right now, our eyes are always open for new acquisitions or opportunities to diversify even further."
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