Keeping America's largest cereal plant up and running is no easy task for Jerry Dailey, who is expected to do just that as maintenance manager for Kellogg Co.'s 1 million-square-foot Omaha, Neb., plant. For the last four years, Dailey has been charged with maintaining plant operations and keeping the facility stocked with supplies that range from No. 2 pencils to the bearings used to run the machines.

What many don't know is that since 1999, Dailey and his team have relied on Omaha-based Precision Industries to manage its $6 million storeroom. And what started as a locally based relationship has over the years spread through the rest of Kellogg.

Today, Precision Industries serves as an integrated supply partner for the entire company—a testament to the family-owned distributor's dedication to quality and customer service. Dailey says the distributor also helps the cereal manufacturer diagnose and solve problems, improve processes and implement cost-savings initiatives.

Chalk it up to the distributor's "can-do" attitude, says Dailey.

"Precision Industries has been a true partner to Kellogg," he adds. "We've grown together over the last six years, adding everything from electrical expertise to hydraulics, and serving as a one-stop shop for our company."

Large by industry standards, yet still owned by the same family that founded it three generations ago, Precision Industries ranks as one of the small percentage of family-run businesses that make it to the third generation of ownership. With 132 locations and 900 employees, the company prefers not to specialize in any one product area, but instead offers its North American customer base a wide range of products and services, including bearings, power transmission, safety, tools and fasteners.

With $215 million in sales in 2004, Precision Industries' customer base includes a high number of food manufacturers, such as Kellogg, along with various automotive, transportation, durable goods, paper, and consumer product manufacturers.

Founded in 1945 by Sebastian Circo, who passed away this past September, Precision Industries is recognized in two distinct business segments: a branch distribution business that provides product to the general public and contract customers, who make up 55 percent of the distributor's business; and the supply chain services group, which comprises on-site integrated supply and other indirect supply chain services to make up the balance of its business.

Chris Circo, Sebastian's grandson and current president and COO, credits his family's strong values and willingness to capitalize on opportunities with helping to keep Precision Industries in a growth mode for the last 60 years. What started as a single store run by a former bearing industry account manager has been transformed into one of the largest independently owned industrial distribution firms in the nation.

During its early years, Precision Industries was run by Sebastian and his brother Paul Circo, who together grew the firm organically by opening locations throughout the Midwest. Sebastian's son (and Chris's father) Dennis Circo joined the firm in 1969 after graduating from college, and took over the reins in 1987. Dennis serves as the company's chairman and CEO today.

Like his father, Chris Circo took a straight route into the family company, starting with tasks like dusting warehouse shelves when he was just eight years old. Somewhere between those early jobs and his current role as president, Chris decided to test the waters of employment outside of the family business.

"I went to work for a competitor back in 1997, and came back with a wealth of experience in integrated supply and supply chain services," says Chris, who took over the firm's supply chain services group in 2000, then moved into his current role in January 2005. "That group continues to grow at around 30 percent annually."

As each new generation took over the helm at Precision Industries, Circo says it brought "new and wild aspirations of growth and expansion" to the planning board. Those aspirations took the distributor on a path of expansion that spread nationwide, and into both Canada and Mexico, in an effort to serve large customers like Union Pacific Railroad, Hormel Foods, 3M, Goodyear Tire and Rubber, and Exxon/Infineum and Ford Motor Co. The rapid, organic growth helped propel Precision Industries from a $14 million distributor in 1980, to one that's expecting $251 million in sales this year.

Circo points to his father's "partners in profit" program as one of the firm's key drivers. Developed in response to a request from one large customer to stock certain inventories, the program centered on "partnering" with customers in a way that would benefit both client and supplier.

"They would give us all of their business for a certain commodity," says Circo, "and we'd strive to eliminate redundancy in the supply chain and minimize paperwork."

Those partnering efforts were actually an early model for commodity management, which in time would help shape Precision Industries' supply chain services division. And while many distributors dipped a toe in integrated supply during its 1990s heyday, this distributor stuck in its entire foot and today stands as a pioneer in the space.

"Our business is built around partnering with specific customers, so while we started off as a bearing and power transmission distributor, we've since moved into many different types of products—mainly at our customers' request," Circo explains. "It was a natural fit and an evolutionary process that led us to success in the integrated supply space."

Not all of Precision Industries' customer relationships are based on integrated supply, though many of them date back 30, 40 and even 50 years. When Jim Craven needed an important tool to fix a customer's machine recently, for example, this purchasing agent for concrete plant manufacturer Coneco in Blair, Neb., knew exactly who to call.

"One of our customers was broken down, and we needed a special screw conveyor in a hurry," recalls Craven. "Precision Industries went to bat with their supplier, and got it shipped to me the next day."

Craven has been calling on the distributor for 20 years, and says Coneco has been working with the firm since it was founded in 1945. Located in close proximity to the distributor, Craven says he's gotten to know the Circo family, and is impressed with its ability to successfully transfer ownership from one generation to the next.

"It doesn't happen often," says Craven, "but each new generation has done a very good job, and has helped grow the firm quite a bit since its origins in 1945."

Circo says the generational transitions have been smooth for the most part, and based on succession plans outlined well in advance. Planning aside, he says clear communication among family members is especially critical.

"We're not a very political company, and that's just fantastic in my mind," says Circo. "We're all very direct, and we say what we want to say, both good and bad."

Of course, everyone knows running a family business also has its challenges.

"Sometimes it's difficult to separate the roles," says Circo. "I have to step back and ask myself, am I talking to my dad, my boss or my friend here?"

At times, the family has turned to outside resources to help it sort through such issues. When Circo returned to the family business in 2000 after his three-year stint working for another distributor, for example, the management team underwent an executive assessment to find out "how things click" at the top of the organization.

"We looked at how we operate and how we're all programmed, and through that, we learned a lot about each other as a management team," says Circo. "It helped us understand not only our strengths and weaknesses, but also what makes each of us tick, and why we are the way we are."

Also challenging independent firms like Precision Industries is the closely held nature of the business, which doesn't allow for much outside investment or involvement.

"We're well capitalized at this point, but I know that I can't go to the market and raise money through an equity offering," says Circo, who, on the other hand, considers himself particularly lucky in that his Precision has a very lean management structure and can make decisions very quickly.

Circo, who envisions a time when his 3½-year-old daughter becomes the company's fourth-generation owner, says he expects continued growth for Precision Industries over the next few years, much of it organic, although he doesn't rule out an acquisition in the near future. He also wants to create a third division, focused on service parts management, from the company's supply chain services division.

For Circo, heading up the family business is all about balance.

"We clearly understand the problems that come when you grow too quickly, so we've been very careful not to do that," says Circo, who has turned away numerous integrated supply and supply chain programs so as not to compromise the firm's existing or prospective clients.

"Measured, profitable growth will be the order of the day," he says. "We think our strategies are sound, so we'll just keep doing what we're doing."