News

By Joe Nowlan, Associate Editor

Industrial Distribution, December 2004

Many successful distributors combine the old with the new. But few carry it over to an interior design statement as Quality Mill Supply Co. does at its Franklin, Ind., headquarters.

When a visitor enters the office of chairman Alan Gilbert, an antique, beautifully preserved roll top desk stands along one wall. A second desk holds the latest computer and Internet equipment, making Quality Mill's four sales locations/warehouses only clicks away. This convergence of the old and the new extends throughout the company.

It's not sentimental to refer to a "Quality Mill tradition," as Gilbert takes a visitor on a tour of the facilities. In the lobby are two antique doors, each emblazoned with the corporate logos of Quality Mill's preferred suppliers.

Gilbert is the son of Quality Mill's founder Alvah Gilbert. As he pages through scrapbooks containing clippings and photos from Quality Mill's early days, he points out one of the first checks his father received in 1944 in payment for a sale: $6.94 from the Cummins Engine Co.

Today, Quality Mill Supply Co. is a general-line distributor with sales and warehouse facilities in Bloomington, Franklin, Ft. Wayne and Muncie, Ind. Founded in 1944, the company distributes general MRO supplies, including abrasives, adhesives, carbide tooling, hand, cutting and precision measuring tools and related accessories. Gilbert oversees a company and 60 employees, including his brother, Larry, the company's corporate secretary, who will be retiring at the end of this year after 40 years with the company. And while various technologies and other business approaches may have evolved over the years, Gilbert emphasizes that some things haven't changed.

"It's still a people business when you come down to it," he says. "You still need to learn about your end user and what their problems are. And get out and try to solve them. That's still the same."

Avoiding commoditization

An example of a problem that needs solving virtually on a daily basis is avoiding the pitfalls of commoditization. Rather than use this as a potential excuse, Quality Mill people say it represents a challenge that has been successfully tackled head on. Company president, Mike Baker, cites their approach to cutting tools as an example.

"Traditionally, they've been our bread and butter," he says. "Our salespeople were trained to sell them. But today, we don't ask sales to spend a lot of time 'selling' those products. They are looked upon as a commodity, and there isn't a lot of brand loyalty anymore. I call them 'general purpose cutting tools.'"

Quality Mill's sales department realizes they are selling their customers more than an effective tool.

"We're trying to find more technically innovative products to sell because they're unique and you can provide the value to them," Baker explains. "So where I see the value is where someone can go in and sell the very high-end cutting tools, the very high-productivity cutting tools. They are very expensive, need to be engineered and won't fit every application. They sure won't replace all the traditional cutting tools, but that's where our efforts are."

As Baker says, items such as high-end cutting tools, among others, have a unique technology and sophistication-representing a new challenge for Quality Mill sales staffers.

"Two years ago, we began focusing on building relationships with those non-commodity manufacturers," says David Salathe, vice president of sales. "We want to sell on what that product can do. We want to focus on the actual application and production of whatever they're making. And to do that, we have to be able to sell on a technical level. Our salesmen are engineers and know how to sell that way."

Establishing value-added benefits, while conceding the commoditization of certain of its products, is part of the company's success. Emphasizing personal touch with the added value has been the approach that Quality Mill has opted for. And so far, Salathe reports, sales have gone up as well as their margins.

"That leads me to believe our salesmen are selling on what they provide to the customer in terms of technical expertise, rather than on price alone," Salathe says.

And then some

"And then some" is one of the sales slogans at Quality Mill. But frequently the "and then some" part involves ongoing training and development. When Baker and Salathe refer to the more technological, sophisticated high-end cutting tools that Quality Mill sells, they realize this also raises the training bar for them and their sales staff.

They use a variety of training methods and tools-CDs, DVDs, and Web casts. Their sales meetings can also be used for teaching, Salathe adds.

"At our sales meetings, we've been having tool shows," he says. "Much of our training now is updating them on the technology that's out there. We'll focus on new technology or [send] them to the manufacturer's facility…"

Alan Keep is regional manager for Sandvik-Coromant, Inc., out of Fairlawn, N.J. Quality Mill handles their carbide cutting tools and precision twist drills (or round tools), Keep says, calling them "the largest distributor for Sandvik-Coromant in my area of responsibility."

"We've been heavily involved in a lot of their sales meetings with what we call the Breakfast Club," he says. "We try to get together early in the morning, maybe once a month. They've been aggressive in these types of meetings and it enables us to help them become more knowledgeable about our new products and have better ability to sell them."

Hands-on teaching is used, of course, but Quality Mill salespeople are also drilled on what they need to do after demonstrating the latest tool to a prospective customer. That's a particular aspect of the meetings that Keep appreciates.

"We'll key in on accounts specific to Quality Mill and Sandvik," Keep says. "It works well, gets the sales reps talking to one another about what they're doing with accounts. 'Hey, I tried this and it went over well.' It helps us both, really."

Kevin Boyle, vice president/industrial distribution and channel management for North America, Henkel Loctite Corp., also appreciates this approach.

" 'Quality' denotes their value proposition. They really have a quality value proposition to offer the customer," he says. "And that's why they've been successful, and continue to be successful.

"A distributor like Quality Mill helps add the value proposition to our brand name and help us maintain our brand equity. Having a company of their caliber as a channel partner helps us maintain that brand equity in the eyes of the customer. And that's indispensable…"

Michelle Stark is the supply chain manager for Ingersoll-Rand/Von Duprin in Indianapolis, which specializes in security and safety products.

"We buy a substantial amount of our MRO items through [Quality Mill]," she says. "They have a person on site here as well, who is a great help in getting us competitive quotes and obtaining those 'difficult to find' items for us," Stark says.

While pleased with its current state of business affairs, the leaders of Quality Mill sound as if they are far from becoming complacent and will readily acknowledge difficulties and concerns about manufacturing overall.

"The last two years have seen a significant drop in the manufacturing base in Indiana," Baker says. "A little over 100,000 jobs have been lost. We definitely noticed it. But things have been rebounding. This year, each month has been very positive, up an average of 15 percent in profits and sales. And we've even seen manufacturing coming back slowly."

Quality Mill is also working with customers who, as Baker puts it, "might not have fit our profile in the past." Examples he cited were some in the medical manufacturing industry, especially strong in and around Purdue University in West Lafayette, Ind.

"That's something we've never gone after very much," Baker explains. "But medical is booming. Maybe it's because so many people are getting older… And there's been a lot of growth in indexible carbide tooling-that's where a lot of our growth is now."

He also cites what he calls "a lot of non-traditional [business]-adhesives and a lot of applications that were once considered non-traditional manufacturing applications, like maintenance applications, for instance. That's outside our normal core competency, but it is an area that's grown for us in the last four to five years."

Difficult early days

Gilbert's years of experience and the perspective it has given him were especially an asset a few years ago when so much of manufacturing and related businesses were hurting. Baker became Quality Mill's president in 2000, a tough time for manufacturing nationwide. And it remained a struggle for a time. Gilbert remained unfazed.

"When Mike became president, everything was going in the tank," Gilbert recalls. "He may have been second guessing himself a little then, but he wasn't the Lone Ranger in doing that, as that was happening across the country in many instances. He'd ask me, 'Am I doing what I need to be doing here?' I just said to keep our noses to the grindstone and do what we need to do."

Quality Mill staffers would meet regularly, staying aware of what needed to be done, Gilbert recalls. And some layoffs and general belt tightening were part of that, including the eventual consolidation of two locations (in Indianapolis and Columbus, Ind.) to the current Franklin headquarters, where they've been for two and a half years.

If the farmland that surrounds much of Franklin doesn't remind you that you're in Indiana, the local sports talk that Gilbert and colleagues engage in certainly will. The fortunes of Peyton Manning and the Colts as well as Indiana University's teams will come into conversational play almost as readily as high-speed tools or band saw blades.

Ironically, though, one of the rallying points for Quality Mill employees is a monthly good-natured competition inspired by another state: to be named "Cheesehead of the Month." The "reward" is to wear a cheesehead hat, symbolic of the Green Bay Packers' fans. The cherished honor-a variation on an "Employee of the Month" award-goes to an employee who has managed change the best for that period.

"Tell you the truth, though," Gilbert laughs, "a few of them don't wear it for long and just hang it on their cubicle."

Company Snapshot

Quality Mill Supply Co.

Chairman:

Alan Gilbert

Headquarters:

Franklin, Ind.

Founded:

1944

Locations:

Franklin, Bloomington, Muncie and Ft. Wayne, Ind.

2003 Sales:

$30 million

Employees:

60

Territory:

Indiana; southeastern Illinois; northwest Kentucky

Web site:

www.qualitymill.com

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