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This article appeared in the January/February print issue of Industrial Distribution. This online version is the second of a two-part series. See Part 1 here.

In January 2012, Industrial Distribution premiered its Watch List in an effort to shine light on the kind of distributor that might not make The Big 50 List. Some of these companies are too small; some don’t fit into the traditional MRO niche that The Big 50 has carved. Yet this series of short profiles takes a look at the “ones-to-watch” outside of the 50 biggest MRO distributors — notably those who are taking steps to improve operations and grow their businesses through acquisitions, training and development, product line expansion, or other best practices.

ECP

ECP is an aftermarket distributor specializing in replacement circuit breakers and motor controls. According to company owner Lane Batson, ECP carries the slow-moving C and D items that full-line distributors hesitate to stock, and offers access to no-franchised lines. “Other companies do the same, most of them selling surplus, but that’s the twist: ECP is a factory authorized distributor for a baffling array of competing suppliers lines – almost every major manufacturer of either controls or breakers willingly sits side-by-side with it fiercest rivals on ECP’s shelves – and, as such, ECP sells only original, unused equipment.”

This interesting approach is coupled with the company’s ability to find obsolete items, both new and direct from the manufacturer, as well as reconditioned items that might be unavailable in new form (and Batson stresses that the company takes elaborate precautions to make sure the equipment won’t be mistaken for new). As for its stand-out service, Batson considers the main one ECP’s ability to provide its customers deep stock from authorized sources.

Batson purchased the company on Jan. 1 from its previous owners and has increased both sales and margins. He owes part of this to having close relationships with distributors and manufacturers, allowing for increased market share and loyalty. Additionally, Batson’s 20 years of experience in distribution and a Masters Degree in Industrial Distribution from Texas A&M mean he has the right knowledge base for this kind of work. “Counterfeit products have been a huge problem for manufacturers. Over-distribution has been a huge problem for manufacturers. Keeping the right mix of stock on the shelf has been a huge problem for manufacturers,” says Batson. “I have worked with distributors and manufacturers to develop a mix of inventory that serves all of the distributors well. It might be a B, C, or D mover for the one distributor, but by having multiple distributors selling that product the volume increases to an A mover for us. We are a master distributor with a twist.”

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Bolts & Nuts Corp.

Bolts & Nuts is a value-added partner to OEMs of fasteners, C-parts, and MRO components, with facilities in Tennessee, Illinois, North Carolina, and Georgia, and with plans to open a new facility in early 2015 in Nebraska. The company’s executive chairman, Dave Hadani, says Bolts & Nuts is one to watch because of the aggressive approach it has taken to expansion: first throughout the Southeast, and now with a push into the Midwest by adding at least one (perhaps more) new facilities per year over the next five years. 

“Furthermore, we have been investing significant resources in technology, as well as have significant capital from our investment sponsor, a major investment firm out of Nebraska, to pursue further acquisitions. We have a number in the pipeline that, when closed, will result in tripling our growth, and exceeding $100 million in revenues,” says Hadani.

But it’s not all about dollars for Bolts & Nuts. According to Hadani, the company initiated in 2014 a major Community Cares initiative to participate, contribute, and lead in the communities in which it operates “so that we represent ourselves, our team, and our core values to community as one of our four key stakeholders.” Also, Bolts & Nuts hangs its hat on the fact that it did not reduce headcount during the recession. Hadani feels it’s been worth it, and that the company has recovered faster from the recession than the rest of the industry. Part of it he owes to a unique VMI program, designed to be customized and personalized to the needs of each customer. The results? “We have sustained significant growth over the past few years.”

Wisconsin Industrial Supply Co. 

Located in Franksville, WI, Wisconsin Industrial Supply Co. looks forward to marking its 30 year anniversary in September, but that’s not all this distributor of cutting tools has to celebrate. Over the past few years, a partnership agreement with the WIDIA Corporation (part of the Kennametal Group) has resulted in benefits from financial rebates all the way from marketing to shared testing cost and building inventory credits. The addition of some of WIDIA’s innovative products to its line has meant Wisconsin Industrial Supply can offer customers highly valuable products bolstered by its own service offering. The distributor is one of the few cutting tool houses in the U.S. that has invested in a full-blown grinding facility for the proper maintenance of production grade cutting tools.

“We believe our greatest asset is the idea that we do not just sell products, but we provide value to our customer,” explains owner and president George Yust III. “If we cannot be successful in accomplishing this objective, then we do not invoice, or will credit them for, their previous sale.” Another point of pride for Wisconsin Industrial Supply is its hiring and training process. The company typically hires staff from the general workforce and then spends a significant amount of time and resources on training. The results have been a highly-skilled workforce and great retention. This long-term, educated staff keeps customers satisfied: “We work closely with (the customers) to improve their challenging application by using the best possible tooling available or improve their process.”

Finally, a succession plan is brewing, as George Yust IV is groomed to take over a business that’s thriving and “in the best position for growth that any small business could hope for,” says Yust III. Additionally, the company grew its customer base by 15 percent in 2014 and is looking to add even more customers in 2015. “The small distributor is not dead,” he says, “they are only in the process of a metamorphosis.”

​ILMO Products Company

ILMO is a family-owned, privately-held corporation founded in 1913, with 10 locations, nearly 100 employees, and more than 6,000 customers. This single-source provider of industrial, medical, and laboratory gases in bulk, micro-bulk, cryogenic, and cylinder solutions also offers bulk propane, welding, and safety equipment, industrial supplies and accessories, and welder rental and repair services.

According to Blair Austin, Marketing Director for ILMO, the company is one to watch because “the right team is in place to adjust how we serve our customers to meet their new and evolving needs.” ILMO’s leadership was keen to market changes that were occurring and continue to occur, Austin explains, and committed to hiring exceptional talent despite recessionary times, so work could begin on how the company would best provide value to its customers once the economy improved. “ILMO’s team is an exciting balance of energy, agility, ingenuity, and product knowledge so critically required by our customers.”

Recent improvements to its operations include the implementation of the company’s first CRM in 2013, along with a marketing automation and email program. Since, Austin cites big efforts in the way of achieving operational goals, including:

  • Onboarding & adoption of Lean manufacturing & management principles. 
  • The earning of Atmospheric & Specialty Gases Preferred Provider endorsement from Missouri Biotechnology Assn (MOBIO).
  • ILMO Specialty Gases’ laboratory’s ISO Guide 34 accreditation.
  • A careful strategy created to address succession planning in key roles throughout the company (preparations for Baby Boomer retirements).
  • Expansion in ILMO Propane geography.

And despite all the recent success, ILMO is focused on looking forward. Says Austin, “We’re most proud of what is coming, and how well we’ve taken our customers’ true needs and values and translated that into better ways of serving and engaging them. We’re experts in our customers’ industries and their applications of gases and gas-related equipment, and we’re thrilled with the conversations we’ve been having with them lately, and the changes it’s allowing us to make, ensuring our growth for another 100 years.”

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