In April, the Industrial Supply Association honored me with the John J. Buckley Lifetime Achievement Award. This was a humbling honor named after the former ISA executive vice president, a friend of mine and of NetPlus Alliance.
Preparing my remarks to accept this award caused me to reflect on the many changes that have taken place in our industry, none more visible than those driven by technology.
When I started in our family business, Ward Brothers Mill Supply Co., in 1969, we needed a lot of carbon paper (cue the millennials to Google “carbon paper”). To create an order, our inside sales staff used a five-page bound form (that included four sheets of carbon paper). Pressing hard while they wrote, they created a packing list, delivery receipt, invoice, accounting copy and original file copy. Technological change has certainly upgraded that process many times over.
Until the 1980s, most customers either phoned in or mailed their purchase orders. One advance I remember is receiving systems contract orders on an IBM Data Phone card-punch reader. The next major development came about with the fax machine, a big upgrade. The big debate at the time was whether distributors should offer an 800 number for their incoming fax orders.
Today, orders can be made from a smartphone in just one click, no need to pick up a phone. The tools we use have dramatically changed over my nearly five decades in this business.
What hasn’t changed is the importance of relationships and what it takes to run a profitable business. I cherish the relationships I have had in my career, a career that took several unexpected turns.
In 1987, I was one of six distributors to form the first buying group in our industry, I.D. One. This group was built on relationships developed through the founders’ participation in our trade associations, then NIDA and SIDA, now ISA. Following the sale of our distribution company, I ran I.D. One until 2000.
Fast forward to 2017, NetPlus Alliance, the buying group I started after I.D. One, just celebrated its 15th anniversary. Like the fax back in its day, today’s technology, including cloud computing, mobile, EDI and e-commerce, is transforming our industry and bringing its own challenges, challenges buying groups like ours are well-positioned to help our members meet head on.
NetPlus is celebrating its anniversary with a new logo and brand and by moving into new offices that represent the combination of old and new that distributors must embrace. The 3,500-square-foot space is a historic former manufacturing building built in 1876 on the banks of the Erie Canal in downtown Lockport, NY. The Covert Motorvette was built there until 1910 when Herbert Harrison, the inventor of water-cooled automobile radiators, started to build his products in the facility. Harrison Radiator later became part of General Motors and became its sole source for automobile air conditioners. In fact, Harrison Radiator was one of Ward Brothers’ biggest customers.
We’ll never stray far from our history. And we shouldn’t despite the changes coming at us. We must translate our product knowledge, our strong customer relationships and the pride we have in the industry for today’s buyers with today’s technology.
At the NetPlus Alliance Annual Meeting in October, Al Bates gave the keynote address on the “real profit drivers” for distributors and manufacturers. His key takeaways were to increase sales faster than inflation, force payroll to grow slower than sales, increase the gross-margin percent in small increments, and to decrease the expense percentage.
What’s noteworthy about these recommendations is that they have not changed in decades.
A key point made in my ISA award acceptance speech was how important it is to embrace change. Our business changed from being a machine shop in the late 1800s, to an industrial distributorship to the buying group we are now, NetPlus Alliance. At one point, our industrial distribution business’s sales dropped from $445,000 in 1928 to $73,000 in 1932, thanks to the Great Depression. Needless to say, we’ve had to adapt at every point along the way.
Without change, our company would have withered away long ago. I am now embracing the future with our new office and with my daughter Jennifer Murphy as our fifth-generation president.
As she said in her annual meeting speech this year – advice from Walt Disney himself that all distributors should take to heart: “Times and conditions change so rapidly that we must keep our aim constantly focused on the future.”
Dan Judge is the founder of NetPlus Alliance, a buying group for industrial and contractor supplies distributors. Learn more about NetPlus at netplusalliance.com.