Be. Know. Do. These three words are used to summarize one of the Army's primary leadership training disciplines. Soldiers are taught that to "be" a leader they must act like one, and not shy away from their responsibilities.
They must also "know" the technical and tactical attributes of their job, and role within the team. Finally, they must execute at a level that's in line with their position, or "do" what is expected of a leader.
At National Oak Distributors, Gregg Schneider and his team are working hard to exemplify the Be-Know-Do attributes of a leading position within the PBE distribution marketplace.
"We don't make markets, we service them," states Gregg Schneider, vice president of sales and marketing for National Oak Distributors. This focus on service is one of the leading reasons that the company continues to grow. "We've been successful in using an approach that combines a good price with a high level of service in capturing repeat sales," says Schneider. The company also uses the purchasing power of its 15 locations to offer greater category penetration. The result is an ability to offer their customers over 250 different lines when it comes to paint, supplies and PBE consumables.
By providing for their customer's needs, National Oak feels they can become a jobber's leading supplier. "We keep overhead costs down and work to fix mistakes. That's a big part of our culture. We feel that the jobber should want to buy from us now, instead of going somewhere else, and paying for poor, discounted service later."
One of the biggest issues PBE warehouses must currently deal with are manufacturers who would rather sidestep the WD and go directly to the jobber, or body shop. Schneider feels National Oak Distributors combats this approach in a number of different ways that provide better results for everyone involved.
"WDs are professional buyers," he explains. "We have what a jobber needs when they need it. And because of our size we can provide those products at a good margin. We also have the advantage of more experience when it comes to managing inventory. We've been doing this for a long time, and this is what our revenues are based on' inventory management and product purchasing.
"So we're at an advantage when it comes to meeting a jobber's just-in-time product needs. Buying from us allows them, in turn, to meet the body shop's JIT needs. Jobbers don't need to have everything on hand because all this does is eat into their cash flow and increase overhead costs from having to store product that won't be needed or used for months. In the end, we feel it's still more cost effective to work with a warehouse and jobber."
National Oak Distributors works to stay in tune with other trends impacting the PBE industry as well. Schneider sees corporate involvement via direct distribution creating a marketplace that's over-distributed. In the long run, this will force some warehouses and jobbers out of business because the supply lines will simply be inundated with product. Increased involvement at the end-user level from paint and insurance companies is also adding to an already competitive business environment.
Additionally, Schneider expects to see continued consolidation at the body shop, jobber and WD level. "Those who haven't or don't want to make the investment in inventory will go away, especially if they're trying to sell solely on price. The margins just are not there to do business that way when it comes to PBE," states Schneider.
"People are loyal to us because we're good at what we do," continues Schneider. And what they do is attribute a great deal of energy and resources in helping a jobber to move the remaining 20 percent of their inventory that is not paint. National Oak Distributor's success in doing just that can be seen by an inventory that turns as frequently as six times a year.
"We carry whatever the market demands, both as a whole and in examining specific geographical needs. What sells in some areas, won't in others," continues Schneider.
The company feels this is another added advantage in working with a warehouse distributor. They're able to assume the risks associated with geographical product or line preferences. Schneider estimates there to be about a 10 percent deviation in product lines from location to location. This ensures that each National Oak warehouse can meet differing demands that often stem from nothing more than local preferences. "The same products don't sell in some areas, but we're still able to take advantage of our purchasing power in providing these somewhat unique requests by making the entire inventory available to all locations," explains Schneider.
When it comes to order fulfillment, nearly 70 percent of the company's sales are done over the phone by a customer service team that Schneider feel is "second to none". However, in looking to the future, new computer systems are being enhanced to help improve a jobber's ability to place orders electronically. The goal here is to cut additional overhead costs and provide the customer with increased value.
Finally, if one needed further proof of National Oak Distributors' position as a leader in the industry, you could always look at their clientele, the biggest of which is Finishmaster, the industry's leading national jobber. "From Finishmaster to the many independent and individual jobbers that we service, our programs deliver the desired results for our customers. That's how we keep expanding our business," states Schneider.
Like any leader, National Oak Distributors looks to the future with a desire to grow and do more. Primarily this means adding to a national footprint that they feel is only 75 percent complete.
These are steps that should require being in the right spot, knowing how to manage their growth, and continuing to do the things that have made them successful.
Focused On The Cure
National Oak works to incorporate the Kaizan management approach in all that they do. Kaizan, which was made famous by Toyota, focuses on identifying how mistakes can be made and then developing practices to help avoid them. The idea is to work towards constant improvement and process refinement.
Why would this be important? Well, upon reviewing their order fulfillment process, National Oak realized there are 53 unique opportunities for a mistake to be made from the time an order is received until the time product is physically delivered to the customer.
Some simple ways that National Oak has implemented the principles of Kaizan include:
Location, Location, Location
Two large mergers and a combination of new openings have combined to form the current 15-location composition of National Oak Distributors. Here are some facts about National Oak's multiple site operation.
- In 2000, Oak Distributors, which had multiple locations on the West Coast and in the Midwest, joined with National PBE, which had multiple warehouses in Florida and the southeastern U.S. This is how National Oak Distributors came into existence.
- Sales, marketing and purchasing is headquartered in Ontario, CA. Being located in California offers several advantages, one of which is being closer to environmental issues that can impact product lines like paint guns and curing equipment.
- Many of the locations have a paint booth and classroom that can be used for training either the jobber, or their customers.
- Each location has its own customer service team. These individuals are trained to know PBE-specific issues, as well as different product options, features and benefits.
- The average size of each warehouse is about 25,000 square feet. Current locations exist in:
- Kapolei, HI
- Memphis, TN
- St. Petersburg, FL
- Miami, FL
- West Palm Beach, FL
- Orlando, FL
- Charlotte, NC
- Chattanooga, TN
- Burr Ridge, IL
- Des Moines, IA
- Auburn, WA
- Portland, OR
- Hayward, CA
- Ontario, CA
- Phoenix, AZ