- Season: 5
- Episode: 9
In this podcast, Motion President Randy Breaux talks about the lessons learned last year and this year, and what he sees coming down the pipe in 2022. There has been an abundance of lessons learned by distributors ever since the pandemic hit last year, but Motion President Randy Breaux says some of the biggest include a better human touch with employees and keeping a laser focus on what customers want.
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Welcome to today’s podcast. I’m Mike Robuck, senior editor at MDM. Today’s guest is Motion president Randy Breaux. Motion, which is headquartered in Birmingham, Alabama, and is a distributor of industrial parts, is ranked No. 5 on MDM’s Top 40 ’21 Top Distributors list. Welcome, Randy.
Breaux: Morning, Mike.
MDM: So, just to get things going, why don’t you tell us a bit about yourself and your role at Motion?
Breaux: Happy to do so, Mike. You know, I’ve been in this business for over 40 years. I started in high school as an HVAC repair technician and moved into sales, working for a distributor before leaving high school. Continued working in the electrical distribution space during college. And then, I went to work for my first industrial manufacturer after graduating from college. Spent 26 years on the manufacturing side, the last 21 years with Baldor Electric Company. Then, made the move back to distribution in 2011 when I joined Motion. And I’ve been the president of Motion now since late 2018.
MDM: Well, yeah, so actually, you beat me to my first question. I think it’s interesting that you come from the manufacturing side and the distributor side. How has that helped you so far, maybe, particularly over the last year and a half?
Breaux: Well, I think you know, for me, it’s, it’s good that I understand both sides of the business. The relationship between the manufacturer and the distributor is critical. And you have to have gives and takes on both sides. If you understand what each needs to win a customer and win the order, the relationship really seems to be much stronger.
I also think that because our manufacturing partners know that I’ve spent time in their shoes, they have a greater respect level for me, and what we’re trying to accomplish here at Motion. If we both don’t win, then it’s only a tactical relationship. And really, what we’re looking for at Motion are strategic relationships with the supplier partners that we engage with.
MDM: OK, great. So, earlier this year, Motion announced that it hired a group vice president of automation. Can you tell us where you are in regards to animation? Automation — I should say, not animation.
Breaux: Yeah. So, automation has been a key focus for us for a number of years now. And we basically made a number of acquisitions that make up our automation group, you know. So, earlier this year, we had an opportunity to bring on a new leader there. And I’ve known Aurelio for a number of years, Aurelio Banda. I’ve known Aurelio for a number of years, as we both attended an annual meeting that’s focused on industrial automation for the last, I don’t know, seven or eight years.
So, I knew from early on that Aurelio was the type of leader that Motion needed on our team. I just didn’t have a spot — until earlier this year — for Aurelio. With that, for positions like that, we always do a national search. And even though we did a national search for the position, Aurelio was the right person for the role to lead our automation business unit.
Many of our customers today are looking for ways to improve productivity, reduce labor, and most, most recently, figure out how to combat the shortage of labor. And automation is part of the answer. So, automation will continue to be a key focus for Motion going forward, particularly under Aurelio’s leadership.
MDM: So, you mentioned the reasons why you’re embracing automation. Does it also help you as far as the labor shortage goes, to be able to automate some of these tasks and maybe free up the employees you have to do other things there?
Breaux: It does. And we, we’ve actually brought a lot of automation into our business, both in the office through the RPA, but also in the distribution centers where we’ve installed automated goods-to-person systems in our primary distribution center here in Birmingham. And we’ve got two more going up in the next 12 months in two other locations.
So, when you look at the automation that we brought into the distribution center, for example, or the products that are picked that fit into that machine, we’ve seen a 540% productivity improvement in our distribution center for those products picked through that machine. So, there’s obviously a huge automation play, both internal to Motion, but also, also external to Motion, with our customers. And we’re taking advantage of that in every opportunity that we can.
MDM: OK. So, how has your sales force adapted to the changing environment this year, with the rollout of the vaccines, and then the onset, onset of the Delta variant?
Breaux: Well, you know, we’ve been adapting since early 2020 when the pandemic began. We’re considered essential with our customers that we serve. So, we really never were shut out of the majority of our customers. We had to learn how to adapt to continue to service our customers. And I’m very proud of our team and the many ways they figured out how to continue to do so.
We’ve had a few customers now requiring salespeople provide proof of vaccination to call on them — Disney being the latest. But we know how to adapt and we know how to get the job done. So, I feel comfortable with the new COVID protocols that we’ll continue to figure out how to properly serve our customers. So, be it the Delta variant, or the Lambda or the Mu variant, we’ll figure it out. We have up to this point, and no doubt, we will continue to figure it out and adjust accordingly to continue to serve our customers — the way they want to be served — for many, many years to come.
MDM: So, my next question was whether customers want sales to visit them. But it sounds like you guys are just gonna be flexible no matter what the answer is?
Breaux: Well, they absolutely do. They just want us to do it in a safe manner. So, we have to adhere to each customer’s COVID protocols to get the job done. Many of our customers rely on us to provide solutions that they just don’t have the technically skilled people any longer to figure things out. They’ve left the company; they’ve retired or whatever the case. So, we have those types of people and relationships with the best suppliers in the business. So, we deliver solutions, not just parts.
And for us, doing it in person still outweighs any other method. Although we do have omnichannel methods to service the customers — be it online, be it through an inside call sales center, or I should say an inside sales call center. Or whatever method the customer really wants to do business with, we’re going to figure out how to do it the way they want to do it.
MDM: OK, sounds good. So, what’s on the digital technology roadmap for the rest of this year and going into next year?
Breaux: Well, you know, we were lucky in the sense that we were wrapping up a new version of our Motion.com website just as the pandemic began in early 2020. So, we launched the new version about midway through the year, last year. With better search capabilities, more rich data, better graphics and images — even have product configurators on there now and other things.
The result has been a twofold monthly increase in our online business over the past year. And we do expect this trend to continue for the next several years. Of course, we’ll continue to make further improvements and continue to give customers better digital options.
If you look at how we’re connected with our customers and our suppliers, I would say about 40% of our overall business is done digitally, through both, both customers and suppliers. Or with customers and suppliers. But that would include not just dot-com, that would include EDI connections and other digital links that we have in place today.
So, digital will continue to be a growing part of our business, both on the, on the buy side and the sell side, for many, many years to come. And I would expect that in the next three to five years, our digital dot-com business will grow to somewhere near 15% of our total revenue.
MDM: OK. So, did the pandemic accelerate Motion’s digital transformation and automation efforts? Were you, were those already kind of under the, under way?
Breaux: Yeah, I wouldn’t say it really accelerated it. We were, we were already on the path. We were just lucky that we had the vision and were already executing on it. So, you know, timing is everything, as they say. We just happened to be in the right spot at the right time.
MDM: OK. So, all year long, I think we’ve heard the two biggest concerns are the supply chain constraints and the labor shortage. For you in particular or Motion in general, do you have a sense of when the supply chain issues might be resolved?
Breaux: Well, I’ll tell you. Supply chain issues are in abundance right now. We are in pretty good shape, though. Thanks to the work of our procurement team has been doing for some time utilizing better data analytics to assure that we have the right products, at the right time, in the right place.
You have to realize that in our business over 50% of the time, our customers don’t know what they’re going to need or when they’re going to need it until something breaks. So, it’s imperative to have a robust and dynamic supply chain plan, which we do.
As we look forward, you know, I do see some moderation in the supply chain issues, but not until we get into 2022. Until then, you know, it’s, it’s all about proper planning and execution with your primary strategic suppliers to take care of the customers as best needed. So, I think we’ll continue to see the issues we’re seeing for some time now. But I do think that as we get into 2022 things will get better, and things will improve as we move through next year.
MDM: OK. And then, maybe over to the employee side, how has your training evolved from the onset of the pandemic? Are you, are you doing more virtual training? Will you continue to do so?
Breaux: Well, we are. We definitely performed more online and video training last year than ever before. Many of our customers that had employees working remotely took advantage of the new work environment and had their people brush up on their technical skills through our Motion customer training and education programs.
What we find was, what we find is that Teams and Zoom helped us with new platforms to provide training online. That was actually a benefit brought on by the pandemic. So, we definitely took advantage of it with our own employees, with the manufacturers that we, that we sell, and the training they provide to us, but also with our customers, and our customers taking advantage of the training that we provide to them.
And I think that will continue. Maybe not to the same degree. But, but I think that will continue as we ease out of this pandemic in the next, you know, six to eight months.
MDM: So, is Motion in a hybrid work environment this year, or have you gone back and forth on that at all?
Breaux: Well, we actually returned to the office in full force right after Memorial Day this year. Prior to that, we had roughly 60% of our people back in the office. We managed the COVID infection rate very well throughout the entire pandemic. But both at headquarters and the field operations, we felt, we felt comfortable after Memorial Day, with the right protocols, that we could return to work into a more normal work environment.
Today, we’re probably 95% staff in the headquarters and in our branches. We still have some employees that may have medical reasons that they need to work remotely. And we’re very accommodating in those situations.
It’s my opinion, Mike, that is very hard to create and develop and sustain a high-performing culture if you are a physically not interacting with each other on a regular basis. So, for me, getting back to the office and getting back to work was important — as long as we could do it safely. And I think we found the right combination to do that.
MDM: So Randy, what are the biggest concerns you’re hearing from Motion’s customers this year?
Breaux: I’d say its supply chain challenges with product shortages and extended lead times, followed by inflation and price increases. Freight expenses have also escalated beyond what I think all of us would have imagined. But at the end of the day, not getting product is the primary concern. So, I’d say supply chain challenges would be the No. 1 concern.
MDM: OK. So, did the new facility in Irondale open recently? And if so, what does it bring to the table for Motion?
Breaux: Well, we’ve stood up a new 110,000 square feet repair and services facility in Irondale. It’s partially open. That facility will house three of our current shops that provide mechanical and hydraulic repairs as well as hose assembling. The hose assembly area of the shop is open and operational. And the repair services locations are in the process of moving equipment and should be operational very soon.
This will bring us a lot more capability to handle more and larger repairs. We have two 50-ton cranes running the full length of the building that will provide capacity like no other shop in the area. It also provides us a new, well-designed and modern facility for our people to work in. So, we’re very excited about this new facility. And we expect that we’ll replicate this in other parts of the country in the coming years. It’s going to become our footprint, if you will, for the future of our shops and services business as we move forward.
MDM: OK. So, speaking about your footprint, can you talk about Motion’s expansion plans? Do you foresee more M&A on the horizon?
Breaux: I can. We’re very active in the M&A space and always looking for businesses that fit our strategy and growth plans. Right now, we have more than a dozen businesses in the funnel that we’re working on. When we consider an acquisition, we have three criteria that must be met. The first is a strategic fit. The second is a cultural fit. And then the third is, is we want to buy businesses that have great people.
Because of the confidentiality of these deals, of course, I can’t get into any, any details. But I can tell you that our focus will remain in the core bearing and PT business, automation, repair services and hopefully moving to process pumps in the near future. Let me know, Mike, if you’re aware of any of these companies that are for sale out there that fit the profile.
MDM: I will gladly do so, Randy. We’re rounding the final corner, corner of 2021. What is your biggest takeaway today?
Breaux: Tough question. It’s been a challenging past 18 months, for sure. And I think the last few months of this year will continue to be difficult as well. What I’ve learned matters most when you’re in times like we’ve been in is, specifically related to the pandemic, is to be honest and transparent with your employees. They can handle the truth about what’s going on and what needs to be done. But not knowing is what they hate most.
I’d also say that it’s imperative to focus on your customers. And don’t put all of your energy focusing on your internal problems. Listen to your customers, and they’ll tell you what they need, and how you can help them. Invest in that communication and act accordingly. And finally, don’t abandon your strategy and plan. If it’s solid before the pandemic, it’s probably solid after the pandemic. Just call an audible. Adjust to the moment, but don’t abandon what got you where you are.
MDM: Good stuff. All right. So, we’re down to the last question here, Randy, anything you care to add about trends or advice this year or next year for B2B distributors?
Breaux: Well, you know, we’re all pretty much in the same boat with regards to the headwinds we’re seeing. I don’t think we’re out of the rough waters yet. But I do believe that we’ll see improvements in the supply chain and moderation of inflation in the next six to nine months. 2022 should be a good year for the industrial distribution business in general, as consumers have pent-up demand, there’s a lot of money in the market to be spent. And our customers need distributors to continue to bring them solutions to keep their plants running and profitable.
That sounds like a good formula for growth for me, and I think probably for the industry as a whole. So, I think we’ll get through this year and we’re going to expect a good year in 2022 as well, Mike.
MDM: Well, that all sounds really good. So, that’s gonna wrap up this MDM podcast. I want to thank you, Randy, for joining us today. And thank everyone who has turned into, tuned into this podcast. Make sure you check back to MDM.com for more upcoming podcasts.
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