When Bob Suding has a problem with one of the PLCs on the shop floor at Intermatic Corp. in Spring Grove, Ill., his first call is to Kiser Controls, a fluid power distributorship based in neighboring Burr Ridge, Ill. Suding could call the product's manufacturer for help, but he says he doesn't need the level of technical detail they provide as a matter of course. Instead, Kiser Controls acts as an interpreter of sorts, sifting through the technological jargon to find the information needed to solve Suding's problem. Such service makes Suding's job as Intermatic's senior electronic engineer much easier these days.

"As a distributor of products, and I've seen a lot of distributors, [Kiser Controls is] tops," Suding says. "They can sort through a lot of this technical stuff and say, 'Here's what you need.' It's real-world information."

Intermatic, Inc. makes consumer products, such as timers, timing switches and low-voltage outdoor lighting systems. The company is a typical Kiser Controls customer, using Programmable Logic Controllers (PLCs) and related high-tech products to automate its production lines. (PLCs are computers used to control manufacturing processes.) Kiser Controls has been selling such high-tech items since 1993 as a way to complement its traditional fluid power business, which is rooted in pneumatics.

The practice of adding "companion technologies", as they're called, is a growing trend among fluid power distributors looking to grow their businesses and keep up with advancements in technology. PLCs, sensors, motors and drives are some examples of companion technologies that can be used alongside traditional fluid power products in factory automation.

"We didn't know the fluid power industry would go that way, but it has," says company president Kerry Kiser, recalling the decision to expand into electronic controls more than 10 years ago. "We wanted to grow, and we didn't see that much growth in fluid power [components]. Now, fluid power is integrating with electronics more and more."

Kiser Controls is using that early entry into the electronics market to stay afloat in a tough marketplace. The company serves various manufacturers in northern Illinois, northwest Indiana and parts of Wisconsin—a customer base that is continually under siege as companies move to other countries, where labor and production costs are lower than they are here at home. The ability to provide both fluid power products and electronic controls makes a distributor more valuable to the customers that remain, Kiser explains. But the strategy doesn't end there. Adding complementary lines is an ongoing mission for this small company. Its newest product offering is a line of conveyors, which complements both fluid power and electronic controls.

Like most small companies, Kiser Controls is a service-oriented business, and has been since its doors opened in 1961. Kerry Kiser's father, Bill, founded the company as a manufacturer's representative firm in suburban Chicago. He worked out of his basement in the early years, representing just one fluid power product line. The firm evolved over time, eventually becoming a full-fledged distributor of pneumatic solutions for fluid power applications. Despite that growth, Kiser Controls was never just a product peddler. To this day, the firm offers engineering and fabrication services on many of its pneumatic products.

Kerry Kiser joined the company in 1979, starting out as office manager, then moving into sales, and eventually working his way to general manager. He became president in 1996, around the time his father semi-retired from the company. The company grew steadily throughout the '80s, and in the early '90s began looking for ways to diversify to continue that growth. The goal was realized in 1993 with the founding of the company's electronic controls division. Management started by hiring a salesperson with experience in PLCs. Once the company was off and running with that product line, a servo line was added, followed by a robotics line. (Servos are electro-mechanical control devices that can be used for factory automation. Robotics are used in factory automation, as well, often to replace functions performed by people.)

Today, those companion technologies represent 35 percent of Kiser Controls' business. Kerry Kiser expects that figure to grow to 50 percent over the next five years, in part because of the service that comes along with electronic controls. Even more so than traditional fluid power solutions, controls require service before and after the sale. Such services—everything from training and programming to troubleshooting—are things the distributor can charge for, which is a key component in the growth strategy of most companies these days.

"We're looking for the sale that takes some engineering," explains Kiser, adding that many customers are unfamiliar with electronic controls and, to make matters worse, have lost that technical person on the shop floor who used to take care of any problems that arose. Therefore, "you become that technical, engineering person. And you can charge for that."

As one example, Kiser Controls has offered a fee-based, basic PLC class since 1995. At one point, the company was running a class every month, but demand slowed with the weakening economy. The company offers training on other electronic products as well.

Kiser Controls went through some tough times before its venture into electronic controls became profitable. The initial plan was to bring controls to existing fluid power customers, but that didn't work. As Kiser explains, the company's fluid power customers trusted Kiser Controls as a fluid power source and were leery of turning to the firm for solutions in what was essentially uncharted territory. As a result, the company pursued new business for the controls division. Today, Kiser Controls has well-established business on both sides of the equation, and is seeing more crossover between fluid power and controls customers.

As luck would have it, just as the controls division became profitable in the late '90s, the economy began its downward slide. The company has had to adjust to a slower business climate, going from 37 to 25 employees in the last two-and-a-half years. On top of that, they've cut expenses by putting some employees on a four-day work-week and by cutting pay for all managers—which Kiser says was a hard sell.

"That's tough for people to accept," he adds. "But it was either that or let people go."

Though times are still difficult for fluid power distributors, Kiser Controls is fighting back. Kiser admits that conditions will never again be what they were in the late '90s, but he's convinced that his company is in the right position to capitalize on the business that is still out there. The company is merging its fluid power and controls business, for example, so that a single sales force handles all accounts and all products. Each seller will bring in one of Kiser Controls' engineers—there are two on staff—when necessary for technical assistance.

The ongoing addition of complementary product lines will help too, says Kiser, since there are few industries left for the company to penetrate. Kiser Controls sells to a variety of manufacturing businesses—pharmaceutical, packaging and printing companies, and machine builders, for example. The plan is to build business in those industries with new products. This will happen on several levels: by bringing new solutions to existing customers, attracting new customers with new products, and building volume with customers who previously didn't buy enough to make them worthwhile accounts.

"Our biggest challenge has been how to cope with the loss of our customer base," Kiser says. "What can we do to grow?"

The answer: acquiring good product lines and taking business from your competition.

"We're working on both," he adds.

For Kiser Controls, becoming a high-tech distributor means more than just adding high-tech products to your line card. This small company is looking within, as well, to find places where technology can help do things faster and better. One project on the table is finding a way to better automate Kiser Controls' front-end systems—essentially, better managing customer relationships from the sales opportunity to the sale.

"We're looking to technology to make sales management and opportunity management better, so that things won't fall through the cracks," Kiser explains. "This is something that will be very helpful for us."

Kiser says he wants to track the effort the company puts into creating new business and building existing business. That measurement will allow the firm to assess where it is spending time wisely, and where it is not. The idea is to put in place a new customer relationship management system that will be accessible to all employees.

Of course, the catch with new technology is justifying the cost—always a difficult proposition for a small company. Kiser says he hopes to implement the new system before the end of the year. The next step, he adds, is integrating Kiser Controls' systems with its suppliers' systems to streamline procurement and inventory management processes.

The goal behind such strategies is in sync with Kiser's philosophy on continually adding new product lines: it makes for a more valuable distributor in the eyes of the customer. For Kiser Controls, there's no better way to go to market.