It requires many things to be a distributor these days, especially resilience.

Acquiring a distributorship back in 2000—with the industrial economy beginning a drastic decline—certainly required resilience. Then to have that distributorship receive six weeks' notice that a primary customer is switching integrated suppliers, and live to tell about it, really requires resilience.

So if nothing else, that characteristic is among the reasons for the success of RPM Inc., headquartered in Grand Rapids, Mich.

When discussing his acquisition of RPM, owner Bruce Baker knows the sale date (2000) will raise eyebrows. He admits he didn't let cold, unemotional business logic stand in the way.

“April of 2000 was the perfect time not to buy a company in the distribution business,” Baker says.

Baker worked years ago for Grand Rapids Supply before heading to Tennessee to work for Martin Supply. He later accepted an offer to return North and work for Shively Brothers, also in Grand Rapids. Shively was in the process of setting up integrated supply programs with the Delphi Corp. to serve two plants in the area, Baker explains. He moved back to get that established. But as it turned out, Delphi's plans were put on hold.

During this period, Baker was in a local hardware store one day and ran into one of RPM's owners, whom he knew. The owner said he was interested in possibly selling the business and Baker said he might be interested in hearing more. The deal was hammered out soon thereafter.

Upon taking control, Baker says he expected to find $7 million in sales but explains, “I watched it go from about $6.5 million in 2000 down to about $3.5 million as recently as just a couple of years ago.”

This happened, in part, because the previous owners were focused on one major customer, the cereal maker Kellogg Co.

“It dominated the company's business,” Baker says. “[RPM]…was doing well, as many companies were in the mid-90s, but so much of it was focused on that one [customer]. It was like they'd neglected some of the [other] core businesses.”

Baker realized changes needed to be made and a company restructuring soon followed. The company also developed a strategic marketing plan.

“I didn't look at it so much as what we did wrong, as much as just the economic climate in the state of Michigan and the country in general. A lot of things happened [nationwide], and around here a lot happened with some of the key customers—like the office furniture industry, for example,” he says.

In looking at the company and its potential customers, Baker broke things into two major core product segments: belting and power transmission (bearings, motors and general PT materials).

“We went over the strengths, weaknesses, opportunities and the costs analysis,” he says. “And we came up with what we thought our best opportunities were.”

First, Baker and his staff realized there were several potential markets for belting that the company hadn't fully tapped. For all the technological innovations throughout the industries RPM served, demand for belting had never really faded.

“Conveyor belting can be anything. There can be a conveyor with a belt on it in almost any type of facility—like a grocery store, a warehouse, a stamping plant, paper mills—all across the board,” he says.

In looking at the power transmission side, Baker says, “We found they [previous owners] had still maintained business, primarily to OEMs. A lot of those were conveyor-associated OEMs—meaning people building conveyor systems and materials handling systems. We figured that if a guy's building conveyor [systems], he's probably using belting too; so we made sure to go after that part of it.”

RPM represents Ammeraal Beltech, a European manufacturer of industrial, lightweight and medium-duty conveyor belting. Ron Volk works with RPM as Ammeraal's vice president of distribution sales.

“We've worked very closely with [RPM] on a number of accounts in and around that western Michigan area,” Volk says. “They've done a very good job for us not only in promoting the product to that marketplace, but in doing the inventory, fabricating, installation and everything else that's needed.”

When you think of a distributor located in Michigan, it's easy to assume that the automotive industry makes up the lion's share of its business. Not in RPM's case. Automotive is one industry RPM doesn't go after, Baker says.

“The automotive people can be difficult to deal with,” Baker says. “I'd worked in auto when their whole thing was to drive the prices down, and they didn't necessarily recognize the value you could bring. So we elected to stay out of that segment.”

RPM instead has focused on other Michigan industries—most of which are doing much better than the Big Three auto makers are these days.

“We've focused more on food processing, agriculture, bakery, fresh fruit and vegetable,” Baker explains. “And we've been successful in paper mills and cardboard box folding.”

RPM also has customers working in steel mills, gravel pits and limestone quarries.

RPM serves the local Keebler Baking Co. plant, known for its various cookies and pastries, as well as its Keebler elves. The plant is located about two miles from RPM, which handles much of its belting needs.

Keebler was acquired by Kellogg after RPM started serving the account. Kellogg had been using an integrated supplier, Precision Industries, for its own operations before it bought Keebler. Following the Keebler acquisition, Kellogg continued to purchase products directly from RPM for about six to nine months, but then brought the integrator into the mix.

“When Kellogg made the decision that Precision would be the supplier, we were given the opportunity to quote prices along with other suppliers,” Baker says. “And we were able to get the business because we were competitive.”

RPM worked with Precision for about three years, then Kellogg switched its integrator from Precision to Strategic Distribution (SDI). That meant a big change, Baker says. Previously, all the orders for belting, for example, would go through Precision and they, in turn, would supply the Kellogg plant.

“So everything Kellogg bought, they bought from Precision Industries,” Baker explains. “From that, they went to a different type of integrated supply, where instead of being the buyer of everything, SDI was the facilitator for Kellogg to buy everything.”

RPM was given six weeks' notice of the change in integrators. It could have been worse, Ammeraal's Volk explains, as six weeks isn't all that short a time frame. In some cases, he says, companies have been lucky to get even two weeks' heads-up.

“When companies make a change they don't always announce it right away. And when they do announce it, it may be 'Oh, by the way, it becomes effective next week' or something like that,” Volk says. “Bruce was in a situation that was difficult in that he was doing all the service work, providing the inventory. Now all of a sudden he's got someone else between him and the customer.”

One major challenge RPM faced with the change in integrators was, literally and figuratively, getting on the same page as Kellogg.

“What happens during such a transition is every integrator owns the information they have on the plant,” Baker explains. “When they switch, some may or may not be willing to share that with the new integrator. In fact, in most cases they aren't.”

In this case, Kellogg still had its system set up as “buying” products from Precision Industries, their former integrator.

“When they threw the switch, so to speak, on this change, [Kellogg] had information in their system but a lot of it was out of date,” Baker recalls. “My challenge was to resurrect all the data I could and get all the information to them that I could, so the items I was selling to their plant would still be ordered from us. And that was where the big transition was.”

Baker used to work in data processing and cites the old adage of “garbage in, garbage out” to illustrate the importance of entering correct and accurate information.

“[Kellogg] really didn't have the information structured the way they wanted it. To their credit, they worked hard and were scrambling, trying to get information organized and find out who can do what,” he says. “So when they changed their system, we had to go back and get our name on their 'buy card,' if you will, as the supplier of record for probably about 400 items we had custom fabricated for the [Keebler] plant. All this, and still keep the plant running,” Baker says.

The transition was not without its periods of misinformation and communication breakdowns. In all, it took about eight sometimes hectic weeks to get everything ironed out, but since then, “it has gone pretty smoothly,” Baker says.

“[For Ammeraal], the biggest challenge was to make sure we could maintain continuity of service and supply,” Volk says. “Having someone right there in Grand Rapids that was doing it, made it a lot easier if we could keep them involved, which we were able to do. “[RPM] made that switch relatively simple and seamless for everybody.”

RPM has developed relationships with several companies and industries in the Greater Grand Rapids area, Baker says. The company also reaches out to a lot of Michigan farm co-ops and belongs to the Michigan Agricultural Assn., for example.

“We promote through their book,” he says. “That's been successful for us because a guy who's a small farmer looks into the association books and sees us under conveyor belts.”

RPM is also a member of the IDC-USA buying group, something Baker is enthusiastic about.

“One of the keys to our success in the OEM and power transmission business is our membership in the IDC. It's something that's given us a competitive edge,” he adds.

About the company's name: RPM. Why name it RPM yet handle no automotive lines? Baker explains that the previous owners came up with that moniker, or rather, its original name: “Rubber Power of Michigan.”

“So I inherited the name,” Baker laughs. He is an avid boat owner and explains that it is customarily considered bad luck to change the name of a boat, even when a new owner takes over. He has applied the same superstition to his company.