In 2007, SKF will celebrate its 100th anniversary as a provider of rolling bearing—related products and solutions. That date will also mark 100 years of partnering with industrial distributors.

From the very beginning, these distributor partners have played a key role in our company's success. We continue to rely on distributors for their expertise and relationships with end-user customers. In return, we support distributors with R&D capabilities, engineering resources and marketing initiatives.

As times change, and new challenges such as cost-cutting pressures from end users intensify, manufacturers and distributors must build more effective relationships to achieve profitability. One way to accomplish this is by identifying new or largely untapped markets and then providing distributors with the training, technology and technical support to exploit them.

This is far beyond offering distributors new and improved versions of products they already sell. That's important of course, but merely replacing one revenue stream with another of equal size will not significantly boost the bottom line.

Instead, new markets with high growth prospects and existing markets in which distributors have not fully participated offer the greatest potential.

Here are two examples of important new markets. Together, according to projections, these markets could increase total distributor revenues in North America by approximately 15 percent, or more than $1 billion annually.

The first is the market for machine reliability and condition-monitoring products, such as hand-held data instruments, accelerometers and predictive maintenance equipment. Also included here are pump maintenance and repair services. To date, only a small number of distributors participate in this growing market.

SKF is expanding efforts to support distributors seeking a greater share of the machine reliability services market. Given the right training, technology and support, distributors can perform 80 percent of the most common machine reliability and condition-monitoring activities. For the remaining activities, which might involve more complex machine analyses and simulations, application engineers can be brought in on a consulting basis.

Participating more fully in the reliability market will not only directly impact the bottom line, it will also enable distributors to anticipate customer needs to a greater extent than ever before.

The second example involves new aftermarkets created by OEM innovations. A case in point: new automatic fryers developed for the fast-food industry. Conventional deep fryers require a lot of labor, usually in the form of restaurant employees wielding wire baskets crammed with french fries. These fryers have few moving parts. When they malfunction, the fryers or their burners are simply replaced. As a result, there's no aftermarket for replacement parts.

In contrast, the new automatic fryers require less employee labor. They have a longer life expectancy and feature several moving parts, including linear actuators. The result: an instant aftermarket for replacement components.

The automatic fryers are just beginning to show up in fast-food restaurants, but within five years will likely dominate the market. We are taking steps now to alert distributors to this emerging aftermarket and to equip them with the tools to capitalize on it.

Such opportunities exist in many industrial sectors. The bottom line: Manufacturers can open the door to new markets, but it's up to distributors to walk on through.