Finding money in holes

Industrial manufacturer and distributor Jergens Industrial Supply changes with the times to help customers lower costs.

by Paul Markgraff

When Cleveland-based Jergens Inc. opened its doors in 1942, the company’s sole focus was manufacturing fixturing and workholding products and distributing them to northeastern Ohio through its internal distributorship Jergens Industrial Supply (JIS). That focus served the company well for many years, until the marketplace started to change. Customers began to demand a broader range of technical solutions.

About 10 years ago, Jergens management realized the company was walking past a huge opportunity to sell products other than its own, so JIS began distributing a small mix of other products in northeast Ohio. The budding distributorship’s product mix consisted of 70 percent Jergens products and 30 percent products manufactured by other companies. Today, Jergens-manufactured products represent only about 30 percent of JIS’s total product mix.

When the metalworking market slumped under the weight of the 2000 manufacturing recession, JIS’s sales took a hit, but quickly rebounded. The distributorship used technical savvy and its ability to cultivate value-adding relationships to increase sales and gain market share in northeast Ohio while other metalworking distributors just tried to stop the bleeding. Over the past 10 years, JIS tripled its sales and cemented a number of customer relationships using tested value-added techniques.

The company also won honorable mention from the Industrial Supply Manufacturers Association Value-Added Partner of the Year Award competition for distributors in 2003 at the ISMA/I.D.A. Spring Convention.

Helping customers at the source
JIS’s increased sales and continued growth are a function of its dedication to improving customer processes on the plant floor. Sales manager Mark Pierson says real customer savings are not found in the price of a product; rather, they are found at the machine spindle.

“We don’t sell drills; we sell holes,” says Pierson. “The cost isn’t in the drill bit; the cost is in the hole it produces.”

More precisely, savings for metalworking customers come from reduced setup time and cycle times. Using any number of Jergens-made products and other metalworking tools, Jergens salespeople help manufacturers find ways to increase productivity and decrease tool cost.

“You can buy an end mill from a dozen people here in Cleveland, but we are not selling it as a commodity,” says Pierson. “We go in to a customer and ask to solve their worst problem. Once we do that, it gives us credibility to go after their next problem. The byproduct of all this is increased sales for Jergens.”

Knowledge is king
The most difficult part of solving problems for customers is first getting the customer to explain his problem and then taking JIS to the plant floor. The distributor uses technically savvy salespeople with years of metalworking experience as leverage to get there.

Pierson methodically pursues salespeople with a strong engineering and mechanical background. He spent 20 years in manufacturing and seeks salespeople with similar backgrounds.

“We really put an emphasis on finding people with technical backgrounds like mine,” says Pierson. “That way, we can go in and offer solutions from raw stock to finished product.”

He says the manufacturing downturn brought about a drop-off in expertise within companies. Layoffs and retirement removed valuable knowledge resources from the supply chain.

“Lately, we have used that to strengthen our position in the marketplace,” says Pierson. “Customers can count on us to bring that expertise back into their facilities. For the customer, that is a very valuable asset.”

Erasing the status quo
When JIS salespeople reach the factory floor, they begin the value-adding process by asking one simple question: Why do you use this process? Operations manager Duane Frager says, many times, the answer comes back: Because this is the way we’ve always done it.

One aerospace parts supplier, asked by a customer to reduce costs by 10 percent, approached JIS for ideas. The supplier’s application produced 30,000 parts requiring a .217 hole drilled 1 inch deep. The company always used a high-speed jobber drill at a cost of $1.50 each. It routinely drilled 300 holes before the drill went bad, which was a method of machining that had been in place for years.

JIS proposed that the customer use a Titex coolant-fed carbide drill at a cost of $57 each. The drill decreased cycle time from 24.6 seconds per part to 3.6 seconds per part and increased tool life from 300 holes to 1,125 holes per bit. Overall cost savings reached $9,600 (click here for case study).

“That’s one part on one machine,” says Pierson. “We were able to go into that plant and duplicate this change many times over.”

Another customer came to JIS with a problem with one of its high-speed press applications. This metal stamping facility used a high-speed punch to cut about 2.3 million holes a week. The punches would dull about every 1 million hits, creating press downtime and defective product.

Twice a week, the facility shut down the press, pulled out the punches, sharpened them, reinstalled them, made adjustments and then got the press running again.

JIS suggested using a Dayton Progress punch and added a coating to the tool to reduce wear and boost tool life.

The new punch increased hits to 3 million between grinds, which reduced press downtime by two-thirds and increased part production to 3 million a week. The customer recouped savings of more than $76,000.

“The annual savings is not in the cost of the punches we sold,” says Pierson. “The cost difference between the punches is miniscule. The savings came from increased uptime.”

Partnership is power
Pierson says there are times when JIS helps customers on a pure partnership level and the company doesn’t try to sell a thing. That strategy has worked wonders.

Because the distributor’s first order of business is reducing setup and cycle times, the customer views JIS salespeople as partners, rather than salespeople trying to make a buck at all times.

To view a standard documentation form from JIS, click here.

This article was prepared exclusively for ValueAddedPartners.org. Copyright 2003.

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