The items that make up a traditional power transmission product line may not appear particularly trendy from a distance, but they continue to provide slow-but-steady profits for many distributors.

This “slow-but-steady” pace of growth is fine, but some distributors are concerned about the “steady” part these days. As with anything associated with manufacturing, there is concern about customers' businesses failing or moving offshore.

“Manufacturing is going away and as a distributor out here, the business pie we all share is getting smaller and smaller,” says Tim Zerger, bearing, power transmission and gearing business group manager for Kansas-based PT distributor IBT.

In addition, many PT products are being upgraded technologically—meaning longer lasting products but fewer replacement sales down the line.

Power transmission products have been a staple of IBT's product line since the company was founded in 1949. Over the years, demand for such power transmission items as gear boxes and ball bearings has not wavered, Zerger says.

“The PT business is 'old school.' It has been around for a long time,” he explains. “But our bearing and PT businesses are still doing pretty well this year.”

Being consistent is one thing, but it's also important for distributors and manufacturers to strive to improve those product lines, he adds—even the oldest of old-school products.

“Some [companies] are even working on improving the ball bearing,” Zerger laughs. “I don't know how, but [they've come up with] ways to make them run faster or cooler with different types of lubrication.”

Customer demand is driving many of the improvements in the PT industry. And while customers are looking to save money, IBT's salespeople are also looking down the road.

“Customers are looking for cost savings and things like that. And our people are also looking for long-term savings for customers,” Zerger explains. “So we try to be problem-solvers in looking at the older technology and convincing our customers to move to the newer technologies.”

IBT's power transmission salespeople are showing customers how to switch from certain types of belt drives, for example, to higher-performance, more energy-efficient electrical drives. Roller chains are another example of improved PT products. Zerger says many times IBT customers have opted for newer and enhanced, but higher-priced, models which can give customers a longer product life—two to three years, in some cases, rather than six months or so.

“Customers will be willing to pay more once they realize there are some true cost savings,” Zenger explains. “In the long run, they save money [due to] less downtime and less maintenance costs.”

At some point, though, distributors recognize that more efficient products that don't need replacement as often as their predecessors may mean fewer sales.

“While companies are willing to spend more money to get that payback down the road, our business may level off since we're not changing those [parts] as often,” Zerger admits.

Product development has been a longtime tradition in power transmission product lines. While some PT items have remained fundamentally unchanged, other products have evolved, says Keith Nowak, president of MPT Drives, a Madison Heights, Mich., distributor.

“PT product lines such as sprockets and chains haven't really changed and are still in demand. At the same time, though, gear boxes, for example, have changed in terms of energy-efficiency and shelf life,” Nowak explains.

Nowak says some of his customers respond to the more durable items and will pay more for them. But just as at IBT, this can mean MPT may sell fewer replacement products down the road. Nowak sees this more as an opportunity than a sales dead-end.

“It is a double-edged sword for us in that way,” he admits. “Those products do last longer and become more efficient. But that can also be a selling point, too, enabling OEMs to increase their sales. That can keep our long-time OEM customers in business.”

While PT-related products have been steady in sales, the industries distributors sell them to have been less steady. This is especially the case for MPT Drives, which counts automotive firms as among its more important customers.

“For [automotive], this is more than just a down cycle,” says Nowak. “It's been down longer than we've seen [before].”

MPT Drives sells to OEMs that build machinery used in the automotive industry.

“Last year was a nose dive, [in automotive]” he says, describing his company as “90 percent power transmission.” As a result, Nowak is almost relieved that 2008 has been “flat, maybe up a little for us.”

Rowland Co. is a Philadelphia-based distributor of power transmission-related products, explains Bart Yost, vice president.

Yost has seen much of the same PT product developments as IBT and MPT Drives—“all pretty much customer-driven,” he sums up, citing longer shelf lives for brakes and clutches, especially.

“Some of the brakes and clutches Rowland specializes in use different and more improved friction materials that enable them to last longer, depending on how the customer uses them, or how hard they work them,” Yost explains.

So while newer, improved PT products may well help a customer stay in business, companies may still have to compensate for a drop in replacement sales. In that case, what can a distributor do? Nowak shrugs and sums it up by saying, “You just have to find something else to sell.”

All the companies in this article are, in one way or another, exploring other potential customer bases. Both IBT and MPT Drives have found “something else to sell” in the alternative energy customer base—which may prove to be a major revenue source in the years ahead.

When selling to an industry that has been struggling, such as automotive, distributors like MPT Drives have to be especially vigilant in looking for other sales targets.

“You have to come up with newer products and sell to different markets. Things like wind energy [developments] are starting up here in Michigan,” explains Nowak, who views it as a potential revenue option to MPT's automotive-heavy customer base.

In addition, MPT is also doing more business with manufacturers of solar energy products, he says. United Solar Ovanic, a division of Energy Conversion Devices, makes photovoltaics—solar laminates that convert sunlight to energy. The company, based in Auburn Hills, Mich., is also developing a line of car batteries, Nowak adds.

“[Solar panels] have really taken off for them,” Nowak says. “We sell them some couplings and bearings, in addition to other parts for the various machines they use. [They produce] very thin sheets of solar panels that are almost like paper. It's pretty interesting stuff and they can't make it fast enough.”

IBT has also begun to make inroads into emerging forms of alternative power such as ethanol and wind energy, Zerger says. It is a growing industry for IBT, he adds, and one to which it could sell more products down the road, in addition to the bearings, couplings and gearing products they currently provide.

“There are a lot of our power transmission [items] used in the wind energy industry,” says Zerger.

At Rowland Co., “probably 80 percent to 85 percent of our business is PT-related,” Yost estimates. This year, business has been solid but there have been occasions when Rowland has had to react when customers' businesses have failed, been acquired or moved offshore. The company expanded its targets to include more of the southeastern United States, as well as some companies in Latin America, Yost explains.

“We've had to chase things a little,” Yost says. “Some of our core customers that had been here in the U.S. closed up shop or went to different products. So we've been doing more business internationally and that's been growing a bit.”

Both Rowland and IBT work with some large companies that have “reliability engineers” or “performance engineers,” Yost says, who are set on finding ways to cut costs and streamline expenses by analyzing their company's processes. That analysis can often lead to the customer calling up and saying, “Can we do this task for this much less? And when?”

While many PT products have been improved, some distributors have new and improved sales tools of their own. Zerger explains that IBT's salespeople use a software program that can measure the number of kilowatts the customer might save if they go with a newer, albeit higher-priced, PT product. Kilowatts saved mean dollars in customers' pockets, Zerger explains.

“We have a [computer] program where we can [plug] into their system and … calculate the kilowatts to show them the payback they'd have just in electrical savings,” Zerger says.

Knowing that there may be less need for value-added repairs, let alone replacement sales, is viewed as a potential sales opportunity by most distributors.

“They might think that we helped them with one project and could also help them with another,” Yost says. “We're customer-focused so if something helps them run better and reduces their operating expenses—that's what we're all here to do.”