Distributor Boosts Sales With Expanded Product Offering, Expertise
Michigan distributor R.M. Wright Co. Inc. has leveraged an expanded product line, a small, highly-trained sales staff and strategic use of technology to increase sales and meet customer demand for value-added services. R.M. Wright tripled its inventory from 1997 to 2000 and saw sales jump from $2.5 million to $6 million during that time. Industrial Distribution (2/1)
From the pages of Industrial Distribution
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Smooth Transition
By Sheri Qualters, Contributing Editor -- 2/1/2001
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."
Respected
expertise
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."
