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 Staying mobile
Quad City Safety travels in new directions to satisfy changing customer demands.
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When you make a pledge to be responsive to customers, it sometimes takes you to unexpected places. How else would you explain how a safety distributor ended up managing a health and fitness center?
When John Deere management told Quad City Safety that they planned to open an 18,000-square-foot fitness center for Deere employees, Quad City president Mike Smeaton was impressed. After all, a healthy employee is a safe employee. But when Deere executives explained they wanted Quad City to manage the facility for them, Smeaton was smitten by worries.
“I don’t know anything about running a fitness center,” he told them.
Since the Davenport, Iowa-based distributor had been successfully managing onsite safety stores for Deere, they convinced Smeaton to give it a shot. He agreed, promising to share any future profits. The center turned a profit by year’s end. Today, it boasts 800 members and employs three degreed fitness experts who regularly lead health and safety classes for Deere employees.
“I guess it shows that if you get knowledgeable people and put a management structure in place — and if your goal is to exceed every member’s expectations — you’re going to be successful,” Smeaton says.
That’s just one example of how Quad City Safety stretches the bounds of conventional behavior to satisfy customers. Another example occurred about four years ago, when Smeaton acquired a safety shoe distributor. Despite his initial reluctance to get into the foot protection business, he decided to take the plunge because several customers were aggressively reducing their supply base.
“We’ve already chosen you as our safety equipment supplier,” they told him. “But we still buy safety shoes from three suppliers. If you get into that business, we could reduce two more suppliers and you could have our safety shoe business.
”Remembering his pledge to be responsive to customers, Smeaton bought Blackhawk Safety Shoes in Moline, Ill., picked up several major brands (Wolverine, Carolina, Nautilus, Doc Martens, John Deere boots) and asked Blackhawk’s former owner, Dan Rumler, to head his new protective footwear division.
Safety shoes are now one of the fastest-growing product segments the company handles. It will sell about $300,000 in shoes this year out of a 2,000-square-foot retail store, which is significant, considering four years ago Quad did not sell to the retail market. The bulk of the sales, however, come from two safety shoe mobile trucks, fully stocked stores that travel direct to manufacturing and construction sites. One truck recently sold 175 pairs of shoes in a single day. The mobile units occasionally carry socks, insulated clothing, earplugs and other personal protective equipment (PPE) for add-on sales opportunities. Both trucks are booked for months in advance and Smeaton plans to add a third truck soon.
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The emphasis is on service
They don’t call it personal protective equipment for nothing. Perhaps more than any other type of distribution, specializing in selling safety supplies is a high-touch business. Customers, like Tom Belowske Jr. of Blackhawk Foundry and Machine Co. in Davenport, Iowa, value local inventory, quick response times and personal service.
“They know what I want and they’re always looking for something better,” says Belowske, who buys between $200,000 to $250,000 of gloves, safety glasses, hard hats, respirators and other PPE supplies per year.
He says field salesman Jeff Miller often makes product substitution recommendations to help him keep costs down or to find a better solution. For example, after struggling unsuccessfully to reduce eye injuries in the foundry, Miller recently located a new source for safety goggles that do a better job of keeping sand, dust and grit out of workers’ eyes. To help lower costs, he recommended that Belowske buy replacement lenses instead of purchasing new safety glasses, and helped find a better quality earmuff to replace a cheaper brand that broke frequently.
“They work real hard at trying to keep my costs down because they know that’s important to me,” Belowske says.
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Cutting transaction costs
It didn’t take long for Smeaton to recognize the pitfalls of selling safety shoes. It requires a big investment in SKUs, yet inventory turns are slower than other product lines. That combination causes transaction costs to skyrocket.
“A driver would sell 30 to 50 pairs of shoes in a day. He’d be gone for a week and then he’d have 200 line items that needed to be billed,” says company controller Dave White.
The customer waited for an invoice and Quad City waited to get paid. Writing up tickets and handing them to data entry for manual keying was a time-consuming and costly process. They’d have a stack of orders to enter at a time, which created additional chances for errors.
“Plus, inventory was not replenished in a timely manner, so we were looking at stockouts,” he says.
Today, the shoe mobiles are equipped with laptop computers. Using a modified database developed in Access, drivers immediately enter orders and print an invoice. Since they can link to the company’s mainframe while still on the road, there are fewer delays in replenishment. If the company adds styles or changes prices, information updated on the mainframe automatically shows up on the truck’s computer.
Smeaton anticipated that branching into safety shoes would give his salespeople something new to offer customers. He was surprised to learn it also opened new doors.
“The safety shoe business has gotten us into accounts we couldn’t get into before,” he says.
Sometimes, the shoe business has enabled them to remain in contact with customers even after they’ve switched safety suppliers. For example, one former customer started buying gloves and other PPE products from a general-line industrial distributor. Quad City maintained contact because the shoe mobile stopped in every month or so and its outside salesperson also kept in touch.
“Because we still have a presence in the plant, we found out about a special project where they needed fall protection and instrumentation,” he says.
As a result, Quad City managed to pick up some business it might not have known about if it didn’t keep communication channels open.
“We’re always trying to offer higher value to our customers,” says vice president Roger Bayness. “Their expectations have grown and we’re trying to keep ahead of them. We keep looking for offerings for those customers who want to deal with fewer suppliers.”
Leveraging mobile sales
Utilizing what it learned from operating mobile shoe trucks, Quad City plunged into another new venture this year: mobile first aid. Dubbed First Aid Supply Team (FAST), the mobile units target non-traditional accounts such as offices and restaurants, plus manufacturing facilities.
Three first-aid vans cover three routes in the Quad Cities area (Davenport and Bettendorf in Iowa and the Illinois cities of Moline and Rock Island). The goal is to grow to 15 routes within two years, covering Iowa, Illinois, southern Indiana and western Kentucky (where Quad City operates a branch in Henderson).
They drive to the customer’s place of business and fill first-aid cabinets on the customer’s site with bandages, aspirin and other supplies. But just like the safety shoe business, selling first-aid supplies is a low-dollar, high-transaction business. Most competitors write up orders by hand, pull the order, fill the cabinet and ask the customer to sign a receipt, then bring multiple tickets back to the office where someone prepares invoices and mails them.
“We’ve equipped the vans with laptops just like we did with the shoe mobiles,” Smeaton says. “The drivers go out to the van, enter the order, print a pick ticket and an invoice. They take the invoice in to the customer and, in most cases, we get paid immediately. The customer loves it. A high percentage of companies pay on the spot, so we have virtually no receivables.”
The service has succeeded beyond his expectations.
“It’s a value-added service for customers. It’s a good way for Quad City Safety to service the small accounts. We know it will open doors for us like the mobile shoe business did,” he says.
The newest frontier
Electronic commerce is the newest frontier customers are urging Quad City to explore. Once again, Smeaton has decided to go where the customer beckons. He recently populated an online database that a new customer, hair care and consumer product manufacturer Alberto-Culver Company, will use to order safety supplies.
It required Quad City to build a database from scratch, following the parameters the customer established. In this case, the customer uses a procurement system from Commerx, a provider of e-commerce software and business process automation solutions.
“One of the most pressing issues for our company is the request from our customers to populate data and images to either their site or a Commerce One, Ariba or some other system,” Smeaton says. “Trying to populate and maintain those sites is a huge issue, and it’s going to continue. It’s a big dilemma for distributors to have to communicate with all the various systems. It’s one of my biggest concerns.”
But whether pondering a request to manage a health and fitness center, sell safety shoes and first-aid supplies, or test the waters of e-commerce, Smeaton will do what he’s always done. He’ll weigh each opportunity carefully. Then he’ll stride forward, always aiming to exceed the customer’s expectations.
This article originally appeared in the July/Aug 2001 issue of Progressive Distributor. Copyright 2001.
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