Earlier this year, INDUSTRIAL DISTRIBUTION sat down with Kaman Industrial Technologies president T. Jack Cahill to discuss the aftereffects of 2003, how well his own company did during the year, and his opinions on other issues important to the industrial distribution industry. Following are his responses to some of our questions.

Industrial Distribution: How would you characterize 2003 for the industrial distribution business, and how is 2004 shaping up so far?

Jack Cahill: 2003 was a year of transition. After three years of a recessionary environment in the manufacturing sector, we finally saw signs of a recovery in the last quarter of the year. Industrial distributors, which typically lag the overall economy, began to see slight improvements in their business towards the end of the year. However, I think most distributors are still operating cautiously.

This year, we see more reason for optimism than we have in several years, continuing the improved trend from late last year. The macro-economic factors, such as industrial production and capacity utilization, indicate a much-improved manufacturing environment.

ID: Kaman posted another increase in sales in 2003, adding to an increase in 2002. How do you explain your growth over the last few years?

Cahill: Kaman's growth has been a result of our continued emphasis on our strategies of building long-term relationships with key customers and expanding into key growth markets. Both of these strategies have helped us grow, with an additional emphasis on selective acquisitions.

ID: Kaman made an acquisition in 2003, Industrial Supplies in Birmingham, Ala. What are your plans for 2004?

Cahill: We have made three acquisitions in the last three years. While we cannot be specific about any of these types of activities that may occur in the future, it is our strategy to develop and grow our business. We will be working hard in our business to execute this growth strategy.

ID: What are the major challenges facing the industry today?

Cahill: The industry must continue to react to a domestic economy that is losing jobs and traditional industries to other world economies. Globalization of the industry will drive a great deal of strategic planning in the future.

ID: How will Kaman respond to more manufacturing moving offshore?

Cahill: We will be looking at ways to service customers who are moving out of the North American market as well as developing new products and services that are suited to the industry that remains. There still remains a tremendous amount of opportunity to deliver value in the domestic market.

ID: What is Kaman Industrial Technologies doing to meet some of today's market challenges?

Cahill: We are investing in our strengths and keeping focused on our plan. This includes our expansion strategy to cover markets which are key to our growth and that are necessary to service important national customers. In addition, we are building our organization to meet the more critical challenges of globalization and demands of today's technology-driven businesses.

ID:What is your view on the role of today's small distributor (those with less than $15 million in annual sales)? In your opinion, how secure is the small distributor's place in the supply channel?

Cahill: These distributors fill an important role in our industry and I expect it will continue. Small distributors who are able to focus and execute on a singular approach to become the most expert in their arena will survive. These distributors also help to reinforce the notion that closeness to the customer and a high degree of expert service are still needed and valued by the end user.