When most end-user customers think of areas where they can cut costs, maintenance chemicals are rarely at the top of the list.

Maintenance chemical manufacturer CRC Industries Inc. changed all that by engineering a five-step process, called the Risk Reduction Partnership Plan, that saves end-user customers money. By focusing on what it can do for customers, the CRC of today is making a difference in the bottom line and holding on to customers because of service rather than price.

“We don’t sell stuff in a can,” says Ken Cantwell, director of marketing for CRC Industries. “We sell solutions to problems.”

Because of the company’s innovative approach to cutting customers’ hard costs, CRC Industries was awarded the Industrial Supply Manufacturers Association Value-Added Partner of the Year award at the 2001 ISMA/I.D.A. fall convention.

Producing the package
CRC Industries developed and launched the Risk Reduction Partnership Program to put everyone – CRC salespeople, distributor salespeople, and end-user customers – on the same page.

The Risk Reduction Partnership Plan is a five-step process that works to identify and implement real cost savings. The program is featured in a 5-page fold out brochure that outlines CRC’s approach. A CD-ROM and VHS video that bring to life exactly how the program works also support and communicate the full value of the plan.

But the real benefit is documentation. CRC quantifies and documents savings that relate to stock keeping unit reduction, transaction cost reduction, application savings, process improvements, training costs, regulatory reporting, risk minimization and any other goals a company defines. This is where companies get to see the actual cost savings on paper.

The company designed the program and all of its components to help its distributors and end-users learn the methods and reap the rewards of tightening the supply chain.

“Everybody says they can do value-added and provide services but at the end of the day they talk price,” says Cantwell. “With our detailed program we can say from experience, ‘Here’s what it is, here’s what it means and here’s how we accomplish it.’ That’s when the customer will say, ‘I think you guys know what you’re talking about. Let’s move forward.’”

Paving a path toward profit
Telling a customer how to cut costs and actually doing it are two different things.

That’s why CRC developed the five-step process. It not only looks good on paper, it works in practice. The first part of the process is to develop a risk reduction plan. A CRC representative sits down with the end-user customer’s key decision makers and together they design a plan targeting specific cost generators and potential areas of risk such as productivity, regulation and safety. CRC looks at all types of regulation: local, federal and worldwide compliance.

After developing a basic strategy, CRC digs deeper. They analyze current products, their use and application requirements. The idea is to obtain a big-picture understanding of how the customer currently conducts business.

Once that is established, CRC identifies possible solutions that fit specific needs. The solutions match criteria, such as eliminating product duplications, maximizing regulatory compliance, improving operating efficiency and productivity, and reducing administrative costs in paperwork and reporting.

CRC also provides product training and support, demonstrates how to handle, store and dispose of its products and may even explain which personal protective equipment to use. The product training and support also includes hazard communications training. CRC educates workers about hazardous chemical inventory, material data safety sheets, hazardous warning labels and other information and training.

Finally, CRC provides customers with documented cost savings. The documentation provides an accurate picture of hard cost savings.

Theory in action
The Risk Reduction Partnership Plan helps CRC salespeople establish themselves as solutions-oriented instead of product-centered. When they visit customers today, they discuss ideas for solutions, rather than products.

CRC’s program helps their own salespeople by urging them to collect and report their best practices on a regular basis. Each fiscal quarter, every salesperson submits his or her best cost savings case study to a six-person management team consisting of the vice president of sales and marketing, the director of marketing, the national account manager and three sales managers.

The management team reviews the case studies and awards a cash prize to the top five. More important than the cash, the salespeople win recognition within the company, because the best stories are passed between salespeople, establishing best practices.

Instead of disparate loads of loose paper and informal bits of information, CRC gathers the stories into a binder organized by customer and industry. The company also circulates the best practices electronically. Both serve to recreate the company’s culture.

“Not only could salespeople use the stories for getting in the door, more importantly they would stay in the door and are asked to come back because of things they did differently,” says Cantwell.

Some examples of winning case studies include:

• A processed meat producer looking for assistance with USDA compliance and cost reduction — $7,900 in documented savings by SKU reduction, transaction cost reduction and risk minimization.
• A name-brand bakery looking for help with USDA compliance, eliminating banned chemicals from the plant, and implementation of a “where to use” system — $9,375 in documented savings for SKU reduction, transaction cost reduction, training, risk minimization and plant-specific goals.
• A diesel engine manufacturer looking to reduce hazardous chemicals and reduce costs — $21,375 in documented cost savings with application savings, risk minimization and SKU reduction.
• A brewery looking to reduce costs, improve OSHA compliance, and assistance with storage and disposal of products — $28,150 in documented savings with SKU and transaction cost reductions, training, productivity improvements and hazardous waste reduction.
• A fuel cell producer looking for cost reduction through product consolidation and integration — $54,706 in documented savings through SKU reduction and transaction cost savings.

Real change
Without a culture that promotes solutions to problems — the heart of adding value — businesses only appear to add value. Customers eventually see through this façade and wish to talk about one thing: price.

CRC Industries changed that by developing the Risk Reduction Partnership Plan, using its five-step process and demonstrating tested techniques.

“Given this economic situation that we are in, people are looking for realistic ways to reduce or eliminate some of their hard costs,” 
says Cantwell. “The beauty of this is that we have been able to impact that.”

This article was prepared exclusively for ValueAddedPartners.org. Copyright 2002.

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