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Taking care of business 24/7

By Kimberly Griffiths, Associate Editor -- Industrial Distribution, 8/1/2004

Situated in the back corner of an unassuming industrial park in Fort Wayne, Ind., TFE, Inc., seems like, from the front, a calm, collected and tan-colored business that may or may not do anything dynamic. Only the foolish would judge this book by its cover. From within, the concrete warehouse haven roils with power transmission and fluid power intensity, focused on one thing: servicing their customers the best they can.

Open early and late (6 a.m.–10 p.m.) Monday through Friday, TFE, also known as Transmission & Fluid Equipment, is always accessible—customers have sales staff's emergency contact numbers to use at any time—and ready to provide hose, bearings or motors to their client accounts.

"Chris himself has driven up to drop product for us in the middle of the night," says Chad Conley, vice president of Indiana Phoenix, Inc., a front-discharge concrete mixer builder in Avilla, Ind. "If we have a problem, they are always there to help."

Chris Hughes, co-owner and president of TFE, is proud of his company's 24-hour emergency service.

"A lot of our customers work through the night, with third shifts and that sort of thing," he says. "We just want to be there for them during all their active hours. We build a pattern of being there when they call us for any kind of emergency. We feel that helping someone at 3 a.m. may have them think of us at 3 p.m., during regular hours, too."

TFE's policy is for its salespeople to have their emergency phone numbers—home or cell phone—on their business cards. If customers need something, they are calling someone they know and have worked with. From that call, the help is on its way.

It's all good

"TFE has good people, good products and good value," says Conley. "We've bought products from them since we opened our doors in October of 2000. They have the knowledge to help us grow, and keep up with all our changes. They've done an awesome job of working with us."

TFE, in addition to providing basic products for Indiana Phoenix, also produces valve separation assemblies for the cement mixers' water tanks, and kits for the trucks' front hydraulic systems.

"We'll continue to grow successfully together," says Conley. "They will be a major part of our future."

But cement mixer assembling is not the only industry for which this distributorship provides products. The company's customers span a huge range of industries, from small manufacturers, steel companies and food producers to farmers and OEMs.

"We don't have any one market," says Hughes. "When suppliers come in and ask who we sell to, we have to say that we just don't have any one focus in one area. Maybe someone in Oregon can say they sell to the lumber industry, but we don't have that ability."

TFE's wide variety of customers helps them out most in slower times. Take for instance, the recent economic turndown in manufacturing. As Hughes points out, the country still needed to eat, so the distributor's food industry customers kept making orders.

But even while the company's customers are varied, the distributorship's products and services run pretty much 50/50 with fluid power and power transmission.

"Service is something we pride ourselves in with both fluid power and power transmission," says Hughes. "For fluid power, we'll go out to a customer, bend tubes and make up hose assemblies for them on site. Or they can bring a piece here and we'll plumb it up for them.

"On the power transmission side, we're not so much into installation, but we get involved in engineering support and helping customers spec the right item," he says.

Bar coding, receiving orders by Internet, wiring motors for specific applications, the ability to fabricate more than 9,000 hydraulic hoses per week, and a metal-working machine shop with one full-time and part-time machinist are just a few more of the services and benefits TFE provides its customers.

Non-diluted product lines

Founded in 1964 by Hughes' father, Robert, and six other stockholders, TFE started out as basically the same distributorship it is today. Then known only as Transmission & Fluid Equipment, the new distributorship was housed in a two-story house, and only brought in $35,000 its first year. Robert and one other partner bought out the other five in 1969. A few years later, in 1973, the company topped $1 million for the first time.

In 1993, Robert bought out his final, remaining partner, and brought his son, Chris, into the business as a partner. Robert and Chris Hughes co-own the company, though company secretary and treasurer Robert is beginning to shift more customer accounts to other sales staff, and more of his management duties to Chris.

"We really started with the same lines we have today," says Chris Hughes. "Early on, my dad was able to get a lot of the quality product lines, such as Dodge-Reliance and Gates Rubber. Gates was one of the first lines we picked up, and now we're the company's largest independent distributor in the state."

For TFE, in order to do a good job for its suppliers, the distributorship has to focus on them, become their outlet in this area, and not dilute the vendor's presence in the area.

"We've stuck very close to our roots with the power transmission products such as bearings, electric motors and chain sprockets, as well as the fluid power side, including hose and hydraulic fittings," says Hughes. "We are proud of the lines that we have; they are some of the best names in the industry. We've not sold ladders or safety glasses and that kind of extra equipment in the past, like our competitors are now, and we haven't wanted to stray from that."

Gates Rubber Corp., a hose, belts and hydraulic hose manufacturer in Denver, has anointed the distributorship a certified hydraulic hose assembly fabricator, and TFE distributes the manufacturer's full industrial hose and hydraulic hose product line.

"Gates has a broad product line, so we can take care of any customer that comes our way," says Hughes. "They have high-quality products, in which we pride ourselves. We feel like we are an extension of their factory in this area, providing just-in-time service as well as stocking product for customers ranging from a large OEM to a small contractor. We've had a great relationship with them."

Part of TFE's philosophy is that they started with good, high-quality lines, and they haven't diverged from that. Hughes takes pride in the fact that TFE is an independent distributor without hundreds of locations across the country like some of their competitors.

Jason Koehrn is a sales engineer for Rockwell Automation–Dodge/Reliance Electric, a manufacturer of industrial power transmission products and one of TFE's top vendors.

"Chris's father, Bob, was selling Reliance about 30 years ago, and Dodge from the get go," says Koehrn. "TFE is one of our key independent distributors in this area of the country. We've had a good relationship with them from the beginning."

TFE and Rockwell Automation could be the poster kids for a good manufacturer-distributor relationship, as Koehrn works closely with TFE's outside salespeople, and with Hughes on inside strategies and product management.

"There's a real synergy there between the companies," says Koehrn. "We both benefit from this relationship, and our work together will continue to be as good, or probably better, than it has been."

Rolling the dice

Three years ago, TFE opened a second location in Indianapolis—a gamble for the distributorship that prides itself on a concentrated presence. But the gamble has paid off, as the location has done so well for TFE that the operation is already moving into a building twice the size of its original space.

"When did things start getting tough in the economy? Three years ago. And when did we open up in Indy? Three years ago," laughs Hughes. "That's been a tough one, opening up a new location—our first attempt outside of our original building, too—in a down economy."

The economy in Indiana seems to be bouncing back with the rest of the country, and TFE is experiencing a bit of a comeback. Business has been flat for the last couple years, but now Hughes sees a lot of good stuff on the horizon, and for that, they are excited.

Says Hughes, "People have been cautious regarding spending money on a lot of big projects. Though now they are actually being forced into spending money on things that need to be repaired. But they also are feeling more confident in the economy and spending money more naturally. Things have been growing for us, and we are seeing that really take off even stronger now."

"We're there for them"

Along with customers spending money on contracts and deliveries, TFE's counter area has had a good walk-in trade. As long as TFE has been in business, the distributorship has had a counter, and the space in Indianapolis is no exception.

Because the company has so many accounts whose product buying doesn't include the counter space, the area's sales figures are harder to figure, but Hughes says the counter accounts for about 3 percent of the company's $10 million in sales.

"It's not a big number, but it's a huge service for our customers," says Hughes. "Some customers who don't normally use the counter, like an account that may have regular deliveries, may find one morning or afternoon to be short one thing that they need right then. They benefit from being able to come in and pick up that one V-belt at 9 p.m. that night."

The distributorship's extra-long counter hours, second Indiana location, 24-hour emergency service, and can-do attitude are definite benefits for their customers, says Hughes.

"We just try to service our customers the best way we can, and if someone needs something any hour of the day, we're there for them," states Hughes. "…We try to stock for our customers what they are buying and have it here for them to access any time during the day or night."

And all that comes from a small distributorship behind the modest glass doors of a tan building in a low-key industrial park in northern Indiana.

 

Company Snapshot

TFE, Inc.

President and co-owner: Christopher C. Hughes

Secretary, treasurer and co-owner: Robert B. Hughes

Headquarters: Fort Wayne, Ind.

Founded: 1964

Locations: Fort Wayne and Indianapolis

Employees: 37

Sales: $10 million

Territory: 60-mile radius of both locations

Web site: www.tfe-inc.com

10 years and counting

TFE's Chris Hughes, co-owner and president, has more than just products to be proud of. Longevity among the company staff has become something of a feather in TFE's cap.

"Everyone out of our Ft. Wayne office has been with our company for more than 10 years," says Hughes. "We understand that we are a small company, but we provide all the benefits that an employee needs, so they don't feel the need to go to a larger company."

Up until this year, TFE had been paying 100 percent of an employees' health care, but with the increases, the company had to "bite the bullet a bit," says Hughes, and require its employees to start contributing as well.

But even within the sales department, TFE has held on to its people.

"We've been fair, and refused to play games with them, such as changing commissions or territories," says Hughes. "If an account gets big, it doesn't become a house account. They keep it. We're saying, 'Congratulations, you've got a big account.'"

TFE doesn't set "bogeys" or put levels for salespeople to strive for to achieve a commission.

"These are commissioned salespeople with an unlimited potential. Why put caps on them?" he asks.

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