Afew years after graduating from the University of Illinois, Eric Kozlowski and Brian Pfeifer assessed the distribution industry and noticed an opportunity: Though the U.S. market was saturated with distributorships large and small, there were no companies catering to American manufacturers that were moving their operations overseas.

The two were well-positioned to make that observation. Pfeifer was working for bearings manufacturer Timken Co. and Kozlowski was working for a small export firm.

To fill the niche they saw, the pair scraped together their meager savings—about $100 each, they say—and started Industrial Motion Inc. in 1994 out of president and CEO Kozlowski's bachelor apartment.

Their insight bore fruit. Today the company has offices in Singapore, China and India, in addition to its headquarters in Mooresville, N.C., and employs about 40 people worldwide. The niche they noticed 13 years ago has widened in the intervening years; the average distributorship loses 9 percent of its business each year when companies move operations abroad, according to INDUSTRIAL DISTRIBUTION's 61st Annual Survey of Distributor Operations.

But Industrial Motion is not your average industrial distribution operation. Rather than focus on a specific product line such as bearings or power transmission products, Industrial Motion specializes in, well, everything. Everything, that is, a Fortune 500 manufacturer needs to keep its overseas plants up and running. Though the pair decline to reveal their annual sales numbers, they say the company represents about 6,000 different vendors to meet the needs of its more than 615 customers in 32 countries, supplying items ranging from raw materials to gearboxes to conveyor belts for facilities in Asia, India, Latin American and Africa.

Providing such a wide array of products is one of the major demands of their unique business, says Pfeifer, the company's vice president.

“To bring all those products to one place, that's an amazing challenge,” he notes. “You have to build this massive database of suppliers yourself.”

“The other thing is that you can't be the expert on all the product lines. … We have hundreds of thousands of line items,” Kozlowski adds. “We rely upon the expertise of the manufacturers for the products we're selling. ... What we'll do is go back to the manufacturer and say, 'Here's the issue we're having. Could you send the information back to us?' Then we relay that directly back to the customer or take it to our engineers. In a sense, it's kind of outsourcing that technical expertise to a certain degree.”

For example, when Industrial Motion had a customer in Mexico with a specific problem, they turned to Rick Sanchez, inside salesman for PVF and pumps distributor GFI Stainless in Corona, Calif.

“They asked if I understood Spanish,” Sanchez recalls. “Rather than them trying to figure it out, they asked someone here if we could see what their customer was looking for.”

But that's not to say Industrial Motion lacks expertise. Kozlowski says they're required to know the ins and outs of each client's operation, whether it's in Singapore, Siliguri or Shanghai.

“You get a feel for all the products they use. After a period of time, you're actually able to capture all of those products they're going to use year in and year out. That lets them forecast use,” he says.

“We've done a lot of forecasting to be able to buy in bulk for all [of a company's] facilities and ship to them individually,” Pfeifer adds. “We can reduce their costs by doing larger purchases and then selling to individual facilities. We've even gone as far as devising new common part numbering systems for manufacturers, so they have one common part number among all their facilities.”

Another major challenge is the cultural and language barriers involved in conducting operations overseas. When they opened their first foreign office, in Santiago de Queretaro City, Mexico, Kozlowski says, he spoke just enough Spanish “to be able to find a bathroom.”

“Fortunately, all the companies that we were selling to were all Fortune 500 companies and companies that were easily recognized household names. Generally, the people that they hire are bilingual. That comes in very handy,” he notes. “As we grew, the next office we opened was in Singapore. The first employee spoke Chinese and very good English, [so] it wasn't too much of a challenge as far as the language barrier goes. Now every employee we hire worldwide is bilingual.”

“You better have someone who speaks the local language. You better have someone who's working in that culture, or knows the culture, working in that office,” Pfeifer adds, noting that less than 10 percent of the Chinese population speaks English. “You have to hire excellent people and place a lot of trust in them. When you're so far away from your customer base and these offices that you have are 16,000 miles away, you can't just get in your car or fly for three hours and be there.”

Surprisingly, the pair says recent headlines about recalls of Chinese-made products haven't hurt their business—nor has the decline in the value of the dollar against foreign currencies.

Pfeifer maintains that the weak dollar may have actually helped business and notes that Industrial Motion has begun doing business in local currencies.

“Customers see a lot of benefit in that as well, because there are no import costs. They rely on us to [source the product] and we just deliver it to them in Singapore dollars,” he notes, adding that Industrial Motion's quotes expire after 30 days, long before currency fluctuations can affect them.

“I don't think [the weak dollar] really hurts us in a lot of ways. They obviously can get more value for their money now. It may have even helped [our business] in some cases, because they've gained more purchasing power,” Pfeifer says.

And the duo says there's a simple reason why recalls of products made in China haven't had an impact.

“Ninety-eight percent or 99 percent of our products originate here in the United States,” Kozlowski explains. “We don't buy a lot of products [overseas] and sell them back to other countries. We are truly supporting the manufacture of those parts here in the United States.”

Pfeifer says that's due to the original premise of the business: Contact American manufacturers with plants overseas and find out what they need to keep those facilities running.

“We knew they needed U.S. products because most of the technology they were using was made in the United States. Where were these companies going to get their parts?” he says. “We found over time that some [were sourcing parts overseas] on a local basis, but they were also going back to their corporate facilities [in the U.S. for parts]. Our service lets them concentrate on their core business.”

Another founding premise is a common theme in distribution—customer service. It's especially critical to Industrial Motion's business, because lead times are so long. Weeks can elapse between the time an order is made and when it ships out, as each product must first arrive in North Carolina, be inspected to make sure it's the correct item and is undamaged, and then be re-packaged for safe shipment overseas.

Add to that the varied complexities of foreign customs regulations—some nations require items to be inspected by their customs officials even before they leave the United States—and it's a potential disaster if an incorrect or damaged item arrives on a client's doorstep.

“If we ship something to China and it's wrong, it's completely different than shipping something wrong [within the United States],” Pfeifer notes.

“We're always focused on service. When you're an international manufacturer or purchaser sitting over there in China and you're trying to buy a widget from the U.S., it can be very challenging. Just getting the quote is a challenge in itself,” Kozlowski adds. “We need to make sure that everything that goes out of this facility is 100 percent correct and packaged well, so that by the time it gets to the customer they're happy.”

That intense focus on service has kept Ganesh Thiagarajan, a procurement associate for the energy firm Cairn India Ltd., very happy. One episode in particular stands out as emblematic of the way Industrial Motion treats its customers, he writes in an e-mail.

Cairn's manufacturing plant in southern India had a major breakdown, he recalls, and the manufacturer of the spare part needed to make the repair told them it would take 20 days to send the part.

“We contacted Industrial Motion in India and they got back to us in no time and confirmed that they could ship the spare part the very same night from [the] U.S., as they have this item in stock. We heaved a sigh of relief. They shipped this item to us the same night at a reasonable price as we are regular buyers of Industrial Motion,” Thiagarajan recalls.

“The Industrial Motion team works round the clock for us and it helps during crisis too,” he adds. “Our machines do not stop, as we are in safe hands. We feel that we can rely on Industrial Motion because they deliver on their promises and commitment to us.”

Three things distinguish Industrial Motion from other suppliers, notes Chaman Soni, a purchasing manager for medical device manufacturer Becton Dickinson & Co.'s plant in Bawal, India: Timely delivery, cost savings and reliability.

Soni relates another tale of Industrial Motion's diligence on behalf of a client.

“Hydraulic filters, sensors and some tools were lost in transit by our freight company,” he explains via e-mail. “Since this requirement was critical, we requested Mr. Deepak Malhotra of Industrial Motion's Delhi [office] to help us. He contacted his U.S. office immediately and all these parts were shipped once again to us, without waiting for the new purchase order from our side. I have not seen any such supplier who will go out of the way to help in such a critical time.”

The focus doesn't end with customer service. Industrial Motion's suppliers say Kozlowski and Pfeifer stay on top of every transaction.

Sanchez of GFI Stainless notes that Kozlowski and Pfeifer pay close attention to the details of each order they place.

“They're one of the few customers that follow up. They place an order with us and [Kozlowski] follows up with either a phone call or an e-mail to make sure their order's going,” Sanchez notes. “It helps on my end and their end. Some of these orders are coming from overseas, so it takes four to five weeks. If something's misplaced, we're really behind.”

And they pay attention to the little things, making sure every detail is correct, Sanchez adds.

“They're really precise as to what they want, so it makes it a lot easier on our end to supply them what they need. They request the same part numbers our vendors or we use. That way, when they get the product it's according to what their customer requests. There's a very minimal [product] return because of that [level of] precision.”

“They're extremely easy to work with,” adds Bill Barbee, outside salesman for belting and power transmission products distributor McLeod Belting Co. in Greensboro, N.C. “They're extremely efficient, very easy to work with and laid back at the same time. … My sales that are going outside of the States are a direct result of what I've been selling to Industrial Motion. It's definitely helped McLeod penetrate markets we've never been in before. We do sell internationally, but now we're selling items overseas we hadn't before.”

Asked about the possibility of catering to clients' operations in the United States, Pfeifer says they've considered the idea but decided to pass.

“We've been asked by different customers [to set up shop here], but we have a lot to capture outside of this country and that's what were going to continue to do,” he says. “The domestic market and the international market are two different animals completely.”

As for the future, Industrial Motion is considering opening other offices overseas in markets they haven't fully penetrated, Pfeifer says.

For the time being, though, it's business as usual for this unusual business—learning exactly what their customers need to run their foreign plants and making sure they have it in order and on time.

“There's plenty of market share for us to capture outside of this country for sure, a lot of companies moving out of this country to countries where we've had a presence for some time,” he says. “You live and learn by your mistakes. It can be perilous if you don't continually and effectively monitor. If you make a mistake, just make sure you don't make it a second time.”