Serving customers well

Even in the midst of tough economic times, Factory Supplies Co. stays ahead of the pack with its customer service focus and product expertise -- Industrial Distribution, 5/1/2001

Other articles from this Cutting Tools Report:
Tool technology: Distributors make up for reduced vendors' application support
Using cost controls in a downturn
View point: Empower your salespeople


Factory Supplies’ CEO Tom Peterson (left) and president Ange Fiorello are working hard to diversify into other areas to keep sales up.


By Bridget McCrea,
Contributing Editor

Customer driven
Training outside reps
Building customer rapport
Company snapshot

Ange Fiorello and Tom Peterson really know how to work their connections. As owners of Rockford, Ill.-based Factory Supplies Co., they know the region within a 60-mile radius of their headquarters inside and out. Such knowledge not only helps the full-line distributor’s customer base, but its vendors as well.

“They’re able to get me into accounts,” says Ron Spaulding, technical sales rep for East Long Meadow, Mass.-based American Saw Manufacturing. Recently, Factory Supplies sprang into action when Spaulding inquired about a large steel service center that wasn’t buying American Saw’s Lenox product line.

Knowing that the end user did a good share of band sawing during the production process, Spaulding paired up with Factory Supplies to present a portfolio on “Why You Should Buy From Factory Supplies” to the potential customer.

“It was nicely done and it outlined a program that the customer would be entitled to if they were to buy blades from Factory Supplies,” recalls Spaulding. “Unfortunately, we didn’t get that business, but it was a valuable exercise because it opened a door for both of us. Now, that door is always open, and there will be more opportunities for us to talk to that customer.”

Spaulding points to Factory Supplies’ professionalism and its solid relationships in a crowded marketplace as the reason for that door opening. Plus, as an Authorized Lenox Saw Service Center, the distributor has its own welding facilities and purchases coil stock from American Saw. Then, it welds the stock to length for each customer. Every few months, the welds are tested and analyzed by the manufacturer for quality and consistency, thus ensuring that they are up to American Saw’s standards.

“We’ve invested quite a bit of money in our two welders and equipment,” says Fiorello. “If a customer calls at 9 a.m. in need of a rush blade order, we’re able to weld the blades and have them out to the customer in about two hours.”

To ensure that ample stock is on hand when those customers call, Factory Supplies inventories about 100 sizes and types of coil stock. In addition the raw material, the distributor maintains an inventory of popular blades available for immediate delivery to customers.

And it’s not just saw blades — it’s everything. According to Jim Thompson, account executive for 3M in St. Paul, Minn., Factory Supplies is simply not afraid to stock product. He calls the distributor “one of 3M’s largest abrasive suppliers in northern Illinois. “They sell actively and maintain inventories for some of the larger consumers in this area,” says Thompson. “That’s a big issue when you head east out of here and into Chicago, where nobody wants to stock anything for anyone.”

Customer driven

Founded in 1939, Factory Supplies was purchased by Fiorello and Peterson in 1996. At the time, both were working in the manufacturing field, dealing with OEM customers. “We saw the opportunity to use our background in management and sales to take over the company and do our best to grow it,” recalls Peterson.

Without making any drastic changes to the company or its focus, Fiorello and Peterson took the reigns and continued serving the company’s manufacturing, general machine shop and tool and die customers within a 60-mile radius of Rockford. They also kept a sales rep stationed in the industrial area of Madison, Wis., but continued to operate from a 30,000-square-foot warehouse, office and showroom location. The company’s primary products include abrasives, cutting tools, precision tools and gauges. With 20 employees, Factory Supplies’ annual sales hover in the $8 million range, and have reached as high as $10 million when machinery sales were up.

Training outside reps

That may not happen this year, according to Peterson. Facing the toughest year economically since he and Fiorello bought the distributorship, he says Factory Supplies is working hard to control costs and diversify into other areas to keep sales numbers up. Adhesives are one area that the company is branching into, as is the hiring of outside sales reps who have more technical knowledge than sales experience.

He says that outside reps become an extension of the manufacturer’s engineering staff, offering services at no charge, solving critical problems and offering viable solutions. To fill that need, Factory Supplies trains its reps in-house, works in tandem with its vendors, holds weekly sales meetings and also sends reps to off-site training classes.

“If they can’t solve it, they bring in an expert from the manufacturer to get it done.”
-- Jerry Weaver, Taylor Co.

Customers have taken notice. At Rockton-based Taylor Co., a manufacturer of soft ice cream machines and hamburger grills, Factory Supplies has been a key supplier for as long as 25-year company employee Jerry Weaver, director of purchasing, can remember. “Factory Supplies puts an emphasis on getting the engineers, then working on their sales techniques,” he says. “They really try to get to the engineering side of things.”

That comes in handy when Weaver gets wind of a polishing or machining problem occurring on the plant floor. When that happens he says Factory Supplies is always quick to respond. “If they can’t solve it, they bring in an expert from the manufacturer to get it done,” says Weaver, adding that competitive pricing is another thing that keeps Taylor Co., coming back to Factory Supplies.

Along with fair pricing and good customer service, Factory Supplies also provides customers with a proprietary tool crib management software program at no charge. Used to monitor inventory that’s assigned to various jobs, the software helps customers keep tabs on how much product is being consumed.

Still, Peterson feels that Factory Supplies’ status as a full-line distributor and its exceptional product lines are what keep customers coming back, regardless of the myriad other options available to them. “We have over 500 different vendors to choose from,” he says, “which literally gives us access to hundreds of thousands of different products that we can sell to our customers.”

Building customer rapport

At Rockford-based Industrial Mold, a plastic injection molding manufacturer, 90 percent of the tool crib is stocked by Factory Supplies. The two companies have such a good rapport that when tool crib manager Dale Duhammel is out of the building, the distributor’s sales rep Bob Mitchell has carte blanche to go through the crib’s drawers and replenish as needed.

“Bob has the okay to go through my drawers and I never have to worry about him overloading us or anything — I know he’ll only sell me what I need,” says Duhammel, who has been buying from Factory Supplies for 10 years. He says the distributor calls on him every Monday and Friday to take orders, which are delivered the same afternoon by a Factory Supplies delivery van.

“We have two vans that load up every morning, make their deliveries, then come back during lunch and reload,” Fiorello adds. And while the system sounds simple enough, there’s always the last-minute call to contend with — the one that comes in just 10 minutes after the van leaves the loading dock. No sweat, says Fiorello, who enjoys getting out on the road himself to deliver once in a while.

“Over the last five years, Tom and I have made many deliveries to customers,” says Fiorello. “We feel it’s a great way to get out and visit with the customers, and to let them know we really care,” he says. “It sure beats saying ‘sorry, the truck already left, you’ll have to wait until this afternoon or tomorrow.’ We do everything humanly possible to serve the customer because we’re in the service business.”

Looking ahead, Factory Supplies is battening down the hatches for a year that so far hasn’t been kind to manufacturers and their constituents. Even so, Fiorello and Peterson are confident that their attention to customer service and willingness to hold more stock than the typical distributor will help keep their sales numbers at a respectable level for 2001.

And while rampant consolidation has seen the disappearance of many small cutting tool distributors in the last few years, Fiorello says there will always be room for the locally-owned, independent distributors like Factory Supplies. “Our success going forward will be based on the value-added services that we can deliver to the customer,” he says. “That’s the key.”