President Michael Hamzey's military background is evident in the R.M. Wright Co. Inc.'s use of market research, its analytical approach to technology decisions and even its spotless warehouse. Yet the absence of employee turnover during the last four years combined with rapid sales growth highlights the leadership at the helm of this small but ambitious distribution company.
Nearly half of the 20-member staff worked for Hamzey since before he bought out a former partner in 1997. Hamzey has worked in the fluid power industry for more than 30 years, since he attended college on the GI Bill and worked part-time as an inside sales rep. His trademark thoroughness and organizational skills are the same, but his company is reaching new heights.
Mirroring the company's expanded supplier list and broader product line, sales have climbed from about $2.5 million at the end of fiscal year 1997 (March 31, 1997) to $6 million at the end of fiscal year 2000. During those years, R.M. Wright also established a sales office in Flint. Hamzey's goal is to surpass $10 million in sales within a few years, which would propel it into INDUSTRIAL DISTRIBUTION 's mid-sized category.
The Farmington Hills, Mich.-based fluid power distribution company leverages the time and money it saves by running a structured company to meet—and plan for—customer needs. Written job descriptions and the efficient and strategic use of technology are just two examples of the work environment.
"We have an efficient, organized company," Hamzey says. "Everyone knows their role."
The absence of chaos allows employees to focus on the core competencies of providing expert product recommendations and specialized equipment services including repair and rebuilding through its subsidiary NPI, which does repairs, rebuilding and fabrication work. Customers—including a Tier 1 fluid power distributor with an integrated supply contract—and suppliers give R.M. Wright high marks on these criteria.
A tight ship
Marketing manager Dennis Rheaume explains that the written job descriptions are an instrumental part of the company's high customer service level.
"We work closely together," Rheaume says. "If somebody is on vacation we have more than one person who can carry the ball. Customers are looking for reliability and performance."
When it comes time to evaluate new opportunities, Hamzey relies on research data and the staff's knowledge to help him make an informed decision. When the company considered getting into the cordless power tool market in 1999, for example, it researched the market potential and pricing structure.
"We want to make sure that we don't get bogged down in the day-to-day and lose sight of opportunities that are out there," Paulson says.
Much of the smooth sailing can be attributed to the selection, implementation and use of technology options. Before investing in any new software package, Paulson says, the company determines how well it fits with the company strategy and needs. Then R.M. Wright spends the time and money to train employees on the best use of the systems.
One use is a reporting system that analyzes the discount policy to ensure the larger volume customers get the best deals.
"We don't just invest in technology," Paulson says. "We ask ourselves how it will help us."
The results of this thoroughness are obvious to suppliers and customers alike. Stephanie Misch, a purchasing agent for Roseville, Mich.-based Dominion Technologies, describes the company's performance as fantastic and says any problems are taken care of immediately. Dominion purchases filters, regulators, lubricators and valves from R.M. Wright and uses them to build machines used by auto manufacturers.
Fenton Wells, vice president of sales for Kittery, Maine-based Watts FluidAir, a pneumatics component manufacturer, says R.M. Wright is a tight-knit and focused company. Wells says this makes it easy for the two companies to put together a detailed sales and marketing plan.
"They manage their people and processes tightly," Wells says. "Hamzey lays out a plan and manages to the plan. We know where we fit in and what support we need to bring and there's good communication."
Although many R.M. Wright employees are comfortable doing other jobs, the company makes the best use of a small staff by encouraging expertise. One employee has electronics and electrical knowledge, while another is an automotive specialist. Lou Zoia, a senior buyer for Madison Heights, Mich.-based Weldmation, Inc., has first-hand knowledge of the value of R.M. Wright's expertise. Weldmation manufactures welding machines for automobile and appliance companies.
"There have been times when our engineering force didn't know what valve to put in and they'd come and help them to recommend [one]," Zoia says.
R.M. Wright's stature in the business is high enough for another fluid power distributorship to hire it as a Tier 2 distributor. Although the two companies are distribution peers, the multi-branch J.H. Bennett & Co. Inc., which is headquartered in Novi, Mich., is a Tier 1 distributor to about 10 companies, including the Big 3 auto makers.
J.H. Bennett's president Ray Blashill says Hamzey's integrity and honesty and the R.M. Wright staff's technical expertise are key components of the relationship. Blashill says the companies started working together about five years ago, and R.M. Wright is now a preferred partner. Blashill explains that J.H. Bennett deals with about 1,200 suppliers and sells up to 300 brands to a facility, so the integrated supplier needs partners who understand the nuances of particular products.
"They don't possess the complement of resources to be involved in commodity management or integrated supply," Blashill says of R.M. Wright. "But this has no bearing on their sales, marketing or technical support ... They offer so many other valuable functions they shouldn't be disconnected from the supply chain."
Suppliers also appreciate the high level of service provided by R.M. Wright. Steve Phillips, distributor relations manager with Troy, Mich.-based Ross Controls®, says it's not unusual for R.M. Wright employees to service Ross equipment at an automobile factory—no questions asked.
"Even when the equipment didn't necessarily go through their organization," Phillips says. "Because it said Ross Controls they were there nights and weekends without questioning how the order went on that particular part."
Another supplier, Cincinnati-headquartered Clippard Instrument Laboratory, Inc., offers a different perspective on R.M. Wright's tendency to go the extra mile. Regional sales manager Ed Ehrhardt says R.M. Wright's willingness to do the legwork when a customer is looking for a custom-made solution has paid big dividends for both companies. Ehrhardt says he worked with R.M. Wright sales manager Jack St. John for more than a year to settle on a deal that was acceptable to R.M. Wright, Clippard and a customer.
"St. John and I worked together to achieve business at a customer they weren't doing business with," Ehrhardt says. "It took pulls from both companies."
More is more
Along with top-notch customer service, R.M. Wright offers customers a broad range of fluid power products. In four years, the company has tripled the products it offers. The company has about 15,000 part numbers in the computer system now, Hamzey says, up from about 5,000 in 1997.
Yet far from slowing the company down, most of the extra stock moves fast. CFO and secretary/treasurer Skip DeLisle says R.M. Wright keeps $500,000 to $550,000 worth of inventory on hand and averages eight turns a year.
Zoia values R.M. Wright's broad product line along with its reliable delivery. "They have a lot of stock and the availability is very good," Zoia says. "They have been a company that we can count on."
The relationship goes even deeper with Dominion Technologies. Misch says R.M. Wright is an important source of Watts FluidAir products.
"When we first initiated using Watts with them, we were having major difficulty getting a vendor to stock material," Misch recalls. "They agreed to put the money up and stock it in their locations. They're one of the best suppliers for filtration equipment."
Fluid power is one of the more technical product lines sold by industrial distributors and Hamzey understands that value-added is more than a clichéfor his customers. Hamzey says about 10 to 15 percent of his customer base requests engineering work and the NPI subsidiary helps him provide that service.
Started in the late 1970s under the previous joint ownership to do rebuilding jobs for the auto companies, NPI offers R.M. Wright customers product repair and manufacturing of items like small clamp cylinders, air drop assemblies and air prep panels. Other lines of business include making robotics components.
The expanded product line and refocus of the subsidiary is great for business, but it means that R.M. Wright is outgrowing its two buildings, which are located about a half-mile from each other. This year, the company plans to move into a 12,000 square-foot space with more room for each part of the business. The pending move will consolidate R.M. Wright's traditional distribution functions with its fabrication services, and Hamzey hopes the synergies will propel the company toward higher sales. If the past four years are any indication, R.M. Wright will plan and execute a smooth transition.
Selling outside the box
Organization and thoroughness don't prevent R.M. Wright Co. Inc. from taking calculated risks and seizing opportunities. The Michigan-based company is evaluating a variety of non-automotive distribution opportunities west of the Detroit metropolitan area, and has not overlooked startup firms as potential customers. One example is the relationship the company developed with Ann Arbor's SysTech International, almost from the time it opened its doors in 1998. SysTech builds zero air generators used in emissions testing in various states. Sales manager Jack St. John says that after R.M. Wright checked out SysTech's management, the distributorship extended credit to them, the same as it would for an established company. St. John says it was important to develop the trust factor with the customer rather than require cash-on-delivery.
In fact, SysTech president Lothar Geilen says R.M. Wright offered some leeway on payment terms when times were tough. "When the business relationship started, we started at zero," Geilen says. "In this case R.M. Wright believed in our capabilities. We never felt they weren't taking us seriously. They took the time to investigate our situation." Geilen says St. John worked with SysTech on tubes, fittings and valves as it tweaked the equipment. A complicating factor was that SysTech was a subcontractor to an emissions testing company seeking Massachusetts certification. Once the certification came through, the risk paid off.
"We did a substantial amount of business with them last year," St. John says. "I was still trying to develop this territory, [and if we didn't take a chance] I would have lost this business."