"In the beginning, companies just want
to know what your price is," says H. Dean Horn, president and CEO of Rath. "It
takes time for things to develop. But as you gain each plant's trust, the price
mentality changes."
About 10 months ago, Horn called on a
local plant of the stamping company. The plant wanted to buy from Rath, but its
corporate headquarters made purchasing decisions. Horn maintained contact with
the plant, and when the company's print management contract expired six months
ago, Horn's perseverance paid off. His contact at the Ohio plant introduced and
recommended Horn to the corporate contact.
Rath Information Systems bid on the stamping company's contract for 16 items, including tags, continuous forms, unit sets, checks and letterhead. The distributorship won the business. "HISS!" After gaining this initial business, Rath was able to sell the manufacturer more products. Currently, it provides 55 printed pieces. "CLANK!" Horn says his distributorship's next goal is to supply 4-color marketing materials. "PING!" "You have to walk before you can run in manufacturing accounts," Horn says.
Serving a Well-Oiled Machine
Approximately 50 percent of Rath's sales are to manufacturing firms. "You sell to what's in your area, and we're in the Ohio industrial belt," Horn says. The Midwest is a manufacturing mecca. (See "Top 5 Manufacturing States" on left.) And Rath serves one of the largest manufacturing niches--automobile manufacturers and parts suppliers.
This niche purchases a lot of traditional forms. "In the manufacturing arena, you still get involved in multipart, continuous forms," Horn says. For example, one of Rath's customers, Honda of America Mfg. Inc., ordered a multipart identification tag to place on parts traveling through its plants. The complex tags were constructed of different-sized paper and included an affixed label, bar codes, sequential numbering and cross-web gluing. "That's a lot of features combined that not everyone can run on a typical press," Horn says. Providing such a complex tag fosters customer loyalty.
Forms, labels and tags are mainstays of Rath's business to the automotive industry. Some vertical markets are losing large portions of business to technology--restaurants key in orders on computers rather than use guest checks, and many consumers and businesses order fewer checks because they can make payments online--but Horn says the automotive industry hasn't instituted many practices that eliminate forms. "They're not in business to worry about paper reduction," he says. "They focus on automation in cars and car production, not in paper."
Gaining Clients With Slick Service
The manufacturing industry isn't immune to change, and savvy distributors seek new ways to woo and maintain clients. Lisa Sandstrom, president of Viking Business Products Inc., Fort Wayne, Ind., has sold to manufacturers for 11 years. Approximately 60 percent of her distributorship's business is to manufacturers in the automotive, medical, electrical and metal-stamping niches. Viking Business Products' clients buy continuous checks and invoices, wide-format roll paper, tags, envelopes and labels. But Sandstrom jumps at the chance to supply unusual products--ones that make her stand out from competitors.
Several years ago, a manufacturer of exhaust systems approached Sandstrom with an odd request. The company's parts were coated in oil and placed in large corrugated boxes for shipping. But the oil was eating away at the boxes. The company wanted a protective sheet to place in the boxes to prevent corrosion. Sandstrom told the client she could help--then immediately turned to DMIA for help of her own.
Information Central, DMIA's members-only Source Hotline, provided Sandstrom with contact information for plastic bag manufacturers. She found one--a plastic extruder--that offered a unique and effective solution: Sandstrom provided the exhaust systems manufacturer with 72 x 72-inch blue film plastic sheets with an ultraviolet inhibitor. The sheets acted as a buffer between the oily parts and the boxes, with the UV inhibitor preventing corrosion.
Such orders help make Viking Business Products indispensable to customers. But they're not what keeps the distributorship focused on the manufacturing industry. Sandstrom says large volumes and repeat business are the primary advantages of selling to manufacturers. "If they run out of production orders, they shut the plant down," she says. "There are a lot of must-have products."
Robin Rose, president and CEO of Rose Printing Services Inc., a distributorship in Southfield, Mich., says the upside of the manufacturing market is "there's so much business out there." The mistake distributors make, he says, is in focusing on big companies. "Large manufacturers usually have all-inclusive print management agreements with big printing companies," Rose says. "You can't just walk in and sell them a label."
But if you focus down the supply chain, you'll find lots of opportunities. For instance, Rose sells to automakers as well as parts suppliers, including a company in Michigan's Upper Peninsula that produces electrical wires for cars.
Encountering Cogs in the Wheel
Lots of prospects, large orders and plenty of repeat business. Sounds great, right? Well, sometimes selling to the market is as frustrating as a broken assembly line. "We're at the mercy of what this industry is doing," says Sandstrom, who adds that much of the manufacturing purchasing power in northeast Indiana departed as companies merged and new owners bought printing elsewhere.
But no market is without problems, and distributors who are dedicated to the manufacturing sector find ways to conquer challenges. Here are four challenges in the manufacturing market and solutions adopted by some distributors:
Challenge: Paper reduction on the factory floor.
"Business forms used to be a big part of the manufacturing process," Rose says. "With automation, there are still some products used--bar coded labels and tags." But in many plants, some documents have been eliminated. For instance, Rose says lots of manufacturers that used forms to track the progress of parts through their plants now monitor the activity on computers.
Solution: Offer alternate products.
Thermal and thermal transfer tags and labels are hot products in manufacturing. Also, consider supplying marketing materials to manufacturers. Rose Printing Services has provided everything from simple post cards offering rebates to car buyers to high-end brochures promoting new vehicles.
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Top 5 Manufacturing
States
According to the U.S. Census
Bureau's Annual Survey of Manufacturers, these were the states with the
highest value of shipments in 2000:
1. California $447 billion
2. Texas $345 billion
3. Ohio $259 billion
4. Michigan $229 billion
5. Illinois $214 billion
The state with the lowest value of
manufacturing shipments? No surprise. It's Hawaii ($3.7 billion).
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Challenge: Companies opting to convert multipart documents to laser sheets.
"A lot of people are under the illusion that printing information on plain paper is the better choice," Sandstrom says.
Solution: Present a 4-tiered argument.
First, Sandstrom explains to clients that time and money are wasted by printing multiple copies of job orders, packing slips, bills of lading and other documents that could be combined. Second, most companies print documents in black. "If your invoice is going to a company with a stack of papers, how will yours stand apart from everyone else's?" Sandstrom says. Third, many documents require terms and conditions. With custom forms, legal information can be screened on the back. Fourth, forms printed on blank paper typically lack image-enhancing features such as color logos.
Challenge: Getting access to print buyers.
"Years ago, I used to walk in and get time with the print buyer," Horn says. "Now trying to get appointments is like pulling teeth."
Solution: Make friends with the gatekeeper.
"Your first contact can be an enemy or an ally," Horn says. "Treat the receptionist with respect, and she can get you in to see the right people." But Sandstrom says even that technique can be futile in the manufacturing industry, where employee cutbacks sometimes render receptionists obsolete. She says some manufacturers place an employee phone-number list in the reception area with a message to "dial 301 to get the receptionist." The person who answers usually doubles as a receptionist and customer service rep or some other job.
The key to Sandstrom's success is to talking to print users, not necessarily print buyers. "Purchasing can get the God syndrome and not let you in," she says. "That's when you talk to the quality-control people, shipping and receiving, and [employees who maintain the inventory]." Sandstrom says if these employees need products, they requisition purchasing employees, who often just rubber-stamp the orders.
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Viking Business Products
Inc., a distributorship in Fort Wayne, Ind., supplies a variety of
products to manufacturing companies. Shown here are a receiving inspection
tag, a waterproof envelope with four grommets and a clasp closure,
fluorescent green warning labels, and die-cut circular labels.
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Challenge: Economic woes in the manufacturing industry.
According to a recent economic outlook report by the National Association of Manufacturers, manufacturing output decreased 7.6 percent between September 2000 and October 2001. The report says, "It will likely take two years for manufacturing to recover from the downturn that began [in October 2000]."
Solution: Control your involvement--and risk--in the market.
Rose says many car parts suppliers, a target of his distributorship, are in financial trouble. Several have filed for bankruptcy. Despite the slump in manufacturing, Rose Printing Services still serves the automotive and auto supplies industry--but with caution.
First, the company monitors the industry as a whole, reading news articles and trade publications and following information released by manufacturing and auto trade associations. Second, it carefully examines information provided by its customers' other vendors. Third, it keeps a close eye on client activity and payments. If a solid customer begins lagging on payment, Rose considers limiting business with that client. "You must have the constitution to tell yourself the solution is to not let matters get worse," she says. "That's typically hard to do with a loyal client."
Susan Keen Flynn, a freelance writer based in Cleveland, is
a frequent contributor to Print Solutions. Email us your comments at editors@printsolutionsmag.com.
