Strong and independent

Since being sold by Kennametal, Strong Tool & Supply has a new lease on life and renewed energy and determination.

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Like a horse freed from its bridle, Strong Tool Company is bursting with energy. Purchased in April 2002 from Kennametal Inc. by former Bowman Distribution executive Cedric Beckett, the company is anxious to explore the advantages of independence.

Having experienced what it’s like to work for a $2 billion corporate giant, employees at this Cleveland-based distributor display enthusiasm about their chance to once again be part of a regional powerhouse.

In its heyday, Strong Tool’s sales soared to nearly $90 million, which included seven distribution branches and a steel business unit that was later sold when Kennametal acquired Strong in 1998 and folded it into its J&L Industrial Supply subsidiary. In 2001, the toolmaker began an unsuccessful search for buyers for its distribution arm and ultimately decided to separate its Full Service Supply business and its catalog division.

What remained of Strong Tool was about $30 million in sales of metalworking tools, abrasives and MRO supplies to the automotive, aeromotive, medical, construction products, tool and die, and machining industries. When Beckett bought Strong Tool from Kennametal, it had four branches in Ohio, two in Indiana and one in Erie, Pa.

“A number of things attracted me to the company,” he says. “No. 1, it has a reputation for quality and is viewed as a company that brings solutions to its customers.” Other appealing characteristics included an excellent management team, top-quality brands and a geographic footprint in the manufacturing-dependent Midwest.

After the acquisition, Beckett added branches near two other midwestern manufacturing hotbeds, Toledo, Ohio, and Detroit. He also quickly changed its management structure to better position the company for growth.

Previously, inside salespeople reported to the operations side of the business and outside salespeople reported to the sales manager. Now, inside sales and field sales both report to the branch sales manager, who reports to the vice president of sales. Along with the v.p. of sales, three other vice presidents — business development, finance and administration, and sourcing — report to Beckett.

Beckett believes the changes will enable the company to focus on sales growth and turn employees from order takers to order makers. He wants to build on Strong Tool’s rich history and become more diversified in its product and service offering in order to appeal to a broader customer base.

Three-pronged growth plan  
Beckett hopes to offer a fresh perspective that will help Strong Tool to once again become what he likes to call a “super regional” distributor. He expects growth to come from three areas. First, the company expects to see incremental sales increases at the branch level by continuing to emphasize its outside sales expertise in cutting tools and abrasives, and opening up the two newest branches.

He also anticipates growth in ancillary product lines. While retaining relationships with key abrasives and cutting tool suppliers such as Norton, Kennametal and Greenfield Industries, the company wants to expand into other MRO product categories.

“We’re actively looking at the relationships that could complement our product offering,” he says. “We’re trying to find best-of-breed. We have the No. 1 or No. 2 line in pretty much everything we sell and we’re looking for the same thing for the complementary products.”

A newly inked relationship with Induserve — the industrial and commercial arm of hardware cooperative TruServ — should open the door to additional MRO products, plus provide Strong with print and online catalogs and other marketing support.

Fred Kirst, vice president of MRO for TruServ, says the relationship gives Induserve and Strong Tool greater buying power and offers each side complementary expertise.

“Strong Tool is obviously very deep in their categories, but when you start talking about janitorial, maintenance and safety, those are categories we offer all of our members without having to worry about vendor minimums and carrying inventory. They’re already making the sales calls, it’s just add-on sales,” he says.

E-commerce is the third growth opportunity Beckett sees. “Traditionally, we have been known for our feet on the street, our technical salespeople who go out and provide solutions to customers,” he says. “Now, we want to broaden our time to sell. We want to take advantage of the Internet to service our customers.”

Vice president of sourcing Matt Mazur says the goal is to maintain that segment of the marketplace where Strong already has expertise, and simultaneously grow in other markets. It will require different approaches. Field salespeople will continue to run tests and supply engineers and machine operators with advice on the latest metalworking technologies, while other segments will be handled by inside salespeople, direct mail, telemarketers and the Internet.

Offering non-traditional sales channels extends the company’s reach. “A maintenance guy in a plant can place a catalog or Internet order while our field salesman is working somewhere else in the plant,” says Mazur.

A new look  
The change in ownership and management structure have provided Strong Tool salespeople with new opportunities. But it also brings new sets of challenges.

For example, some salespeople find it easy to transition from a metalworking-only emphasis into a total MRO solutions supplier. Others struggle with selling unfamiliar products, some of which they consider beneath their status as engineered solutions providers.

“The MRO solution is a huge shift for salespeople,” says Dale Deweese, vice president of sales. “What we’re trying to do is introduce new tools that will take them into new areas.”

The new tools include a Web site with an online catalog, a print catalog focused on metalworking products, monthly sales promotions, fax and direct mail promos, and other marketing pieces. Salespeople have a goal to grow sales of MRO products at their top accounts to 15 percent of the account’s total purchases.

To do so, they’re developing detailed customer profiles to expand their contacts within accounts.

“When you look at our process, historically it’s been to own the contact, meaning the relationship with the engineer or production manager,” Deweese says. “We want to expand that to owning the machine that our tools are on and owning the production line. So, we’ve asked salespeople to ask their current contact for an additional contact in the facility that procures MRO product.”

Salespeople who are comfortable selling a total solution will continue to be the key contact at some facilities. In other situations, Strong may assign inside salespeople to help introduce its MRO solution to customers.

“We only have to do one of three things,” says Deweese. “Sell more to existing customers, sell something new to a new customer or raise prices. You can throw the last one out because it doesn’t work. It’s pretty easy to sell something new to existing customers because of our relationship with them. All we need to do is get our people excited about our new offerings, provide them with incentives to do what we need them to do and create an entrepreneurial spirit.”

Managed solutions  
Strong offers a variety of commodity management, inventory tracking and order convenience programs to satisfy customer requirements. For example, its E-mail Order Entry system allows customers to enter orders at their desk and submit them via e-mail in a standard format that reduces order entry errors.

CribMonitor is an inventory management solution that uses bar codes and scanners to manage tool crib replenishment in high-volume production settings.

LiveWire provides direct connectivity from the customer to Strong Tool’s Prophet 21 business system.

Strong’s newest offering, ToolBoss, is a vending machine system designed primarily to dispense inserts, end mills, reamers, drills and other cutting tools, but could also handle abrasives, small diameter belts and virtually any other MRO items that fit into a drawer. Different from candy machine-type dispensing units, the drawer configuration provides added flexibility and security because it’s not necessary to repackage products in inventory, it can handle a variety of product shapes and sizes, and items can be replenished one drawer at a time.

Mazur says inventory replenishment programs are popular with customers because they can be configured to suit their specific requirements. For instance, customers can lease or buy the vending units, generate a variety of usage reports, and establish parameters to limit use of the machines to certain employees or departments.

“They also create a barrier between you and your competition,” he says. “You’re no longer battling every week for transactional business.”

Program flexibility like the kind Strong offers can be difficult for large national chains to provide customers. With its newfound independence, Strong Tool has the ability to react quickly to customers. According to Beckett, it’s the reason why employees, suppliers and customers of Strong Tool feel energized.

“We want customers to know that even though we’ve transitioned from being part of a $2 billion company back to being independent, we’re still the same company,” Beckett says. “In fact, we can bring more solutions now than we did before. Our customers are excited about our ability to be independent and bring them more solutions.”

This article originally appeared in the November/December 2002 issue of Progressive Distributor. Copyright 2002.

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