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Carving a niche in the
Northeast
Rhode Island's Massasoit
Tool uses abrasives expertise to serve customers in southern New England and
into the mid-Atlantic region Victoria Fraza Associate Editor When Jim Jaques
decided to form a specialty abrasives company to complement his general line
distributorship, Pilgrim Supply Co., back in the early 80s, he thought, what
better name than Massasoit Tool Company? Massasoit was the famous Indian chief
who aided and befriended the Pilgrims, signing a peace trea
ty
with them in 1621. The parallels were just too much to ignore. Pilgrim Supply
and Massasoit Tool co-existed for five years before Jaques closed Pilgrim to
concentrate on the specialty abrasives business. As a result, today the
Warwick, R.I., distributorship has more than just an interesting name tying it
to the New England marketplace. Jaques, the company's president, has spent the
last 18 years carving out a niche for Massasoit Tool, serving diverse abrasives
customers throughout southern New England. Massasoit sells to manufacturers of
everything from "sinks to submarines" as general manager Joe Bagley puts it.
The $3.1 million firm has grown steadily over the last several years, using its
technical expertise and market knowledge to provide top-notch customer service.
Recently, Massasoit has further developed that expertise by taking on specialty
lines that have led to geographic expansion. And the company has done it all
with limited resources - just eight employees. Such progress hasn't been easy,
however. The industrial distribution business is hard enough, says Jaques, but
it can be even tougher as a small company today. The landscape is full of large
integrators and catalog houses encroaching on much of the business that was
once the domain of smaller firms. That's why Massasoit Tool has chosen to
develop expertise in a specific product area, offering the kind of
problem-solving capabilities customers have come to depend on. "We're asking to
solve problems," says Jaques. "I think, for us, that's going to be our
salvation." Service, service and more service "Our goal is to be everything the
customer needs us to be," Jaques explained on his application form for the 1999
50 Outstanding Small Distributors list. And judging by the range of value-added
services Massasoit provides, that statement is true. Massasoit Tool offers EDI,
24-hour emergency service, inventory management programs, just-in-time
delivery, and formal customer satisfaction surveys, among others. In addition,
the firm's computer system allows it to provide customers with performance and
usage reports, forecast purchasing requirements, track lead times, and offer a
range of billing options including summary billing for customers who
request it. Customers also have the ability to pay by credit card or electronic
funds transfer if they choose. Plant surveys
in which Massasoit
Tool reviews all aspects of a customer's abrasives usage and makes product and
procedure recommendations are an option for all customers, as well. And
any time Massasoit makes a recommendation that saves customer money, an "action
report" is generated, detailing the cost savings. All of those services helped
earn Massasoit Tool the No. 4 spot on this year's list of the 50 Outstanding
Small Distributors, no small feat given the stiff competition from some of the
best small companies across the country. More importantly, they point to the
emphasis placed on customer service by Jaques and his employees. Hardly a day
goes by, notes Jaques, that a customer does not call Massasoit looking for
advice - on what kind of product to use, how to improve an application, or how
to save time or money. What's more, service has a purpose at Massasoit Tool
and that purpose is to reduce customers' overall costs, thus making them
dependent upon Massasoit for ongoing improvements. That's why Jaques insists
that his company learn more about documenting the value it adds for customers.
While the action reports are a start, much more can be done, he says, which is
why he recently attended a workshop on the subject led by consultant Tim
Underhill and sponsored by the Industrial Distribution Assn. "That's pretty
much what we do," Jaques explains, referring to the value-added services
Massasoit provides. "We do one thing and we do it well," echoes Bagley. Dave
Koppenhaver, area sales manager for 3M in Needham Heights, Mass., can back up
Jaques' and Bagley's claims. He says Massasoit Tool is a "hands off"
distributor for 3M, explaining that while 3M provides training for Jaques and
his employees, that training only adds to an already developed expertise in the
abrasives market. "In a lot of ways, [Massasoit Tool] is an extension of 3M,"
says Koppenhaver. "They don't rely on us as much as your average mill supply
distributor would.
We work with them and train them to keep their expertise
up, but they're hands off. They know what they're doing." While 18 years in the
business has helped sharpen that expertise, it doesn't hurt to have three
former 3M salespeople on the payroll either. Massasoit Tool uses that combined
experience to carry out the objectives of 3M and its other suppliers, which
entails bringing the latest products and newest technologies to the
marketplace. Abrasives products are always evolving, say Jaques and Bagley, and
staying on top of the latest developments is vital in their effort to help
customers reduce production costs. And that's the name of the game, says
Koppenhaver. Abrasives customers are looking for a price-value combination, he
explains. Most see the value in a newer, higher priced product that will save
money in the long run. Likewise, the customer sees value in the distributor
that can make those recommendations and find ways to improve other operations
within a plant. "If a customer is having a problem, the solution may be as
simple as recommending an accessory that will make the product work better or
last longer," he adds. "It's not always the product, but how it's used." Jaques
and Bagley can rattle off numerous examples in which they've provided such
solutions. Like the time one outside seller visited a new account with an
abrasive belt that was five times more expensive than the one the customer was
already using. After testing the belt, the customer decided to go with
Massasoit's recommendation, discovering that it would, indeed, cut production
costs. Then there was the time Appleton Papers in Newton Falls, N.Y. was having
trouble with a special product Massasoit had installed. As it turned out, there
were problems with the design of the process for which the product would be
used. Massasoit followed up by collaborating with Appleton on design
improvements that, in the end, doubled Appleton's production and helped save
the firm nearly $1 million a year. A letter from Appleton thanking Massasoit
Tool for its efforts is proudly displayed just inside the main door of the
company's Warwick offices. Other customers have experienced similar situations.
"If we can get a belt that's going to work for us, if it's going to give us
more parts, that's what we need," says John Fernandes, plant manager at Elkay
Revere Corp., a sink manufacturer in New Bedford, Mass. He adds that because
Massasoit reps know what his company is all about, they are able to make the
kind of recommendations that matter. "They know what we make, so they know what
kinds of belts to suggest ... and if there's something new out, they'll bring
it by for us to test." A sharper focus While Massasoit Tool has an established
reputation in New England, there is still room for growth. A key part of the
company's growth strategy involves taking on new, specialty products related to
the abrasives industry. Ten years ago, Massasoit started distributing 3M mill
rolls - special products used in a range of manufacturing environments to
either apply or remove oil from strips of metal. The rolls are used in various
stages of the manufacturing process. The mill roll business really took off
five years ago, helping the company expand business with existing customers and
at the same time establish new ones. The product also opened doors outside New
England - specifically in the mid-Atlantic region, as far south as North
Carolina. Massasoit's vice president of sales, Bob McGlumphy, handles most of
the mill roll sales from his Pennsylvania office. Jaques says the product
represents an ongoing growth opportunity for Massasoit. "It really did give us
a brand new market to get involved with," Jaques explains, pointing out that
the highly technical, engineered product requires Massasoit to work closely
with engineers and others in a customer's plant. Dan Guilmette, purchasing
manager at Massasoit, helps customers design the products, which are then
assembled in the company's machine shop located next door to the main office in
Warwick. The mill roll line has, likewise, opened the door for further
specialization and expertise. Massasoit recently took on a line of coil washing
equipment used in the continuous metals processing industry. Massasoit sold its
first system earlier this year - for $250,000 - and there are five other sales
pending. Using its machine shop, Massasoit can also take part in the
construction of other systems used in the industry, adding yet another
value-added service to the company's long list. "It's pretty promising for us,"
Jaques says of the new product line. "It could mean substantial business."
Despite that growth, Massasoit Tool manages to keep costs under control by
doing more with less. While everyone at Massasoit has a specific job, there is
considerable crossover during the course of a day. For example, a recent phone
call to Jaques found him in the machine shop helping out with a project. And
when he sought to hire an administrative assistant recently - someone to answer
the phones and handle some accounting functions - he stumbled across Deanna
Hope, who happened to fill all those qualifications and more. As it turns out,
Hope is a graphic designer. So in addition to her administrative duties, she is
working on upgrading Massasoit's Web site and will likely design some catalogs
and flyers, a function Jaques has wanted to bring in-house for some time. It's
that kind of teamwork, says Jaques, that is a major reason for Massasoit's
success. Another is its emphasis on technology. The firm is in the midst of a
computer upgrade that will speed the flow of information, allowing Massasoit to
do even more business with the same number of people a crucial point if
the company is to continue on its chosen path of focused growth. And if past
performance is any indication of future success, many would agree that
Massasoit Tool is right on track. "They have a good niche," says Dave Graeff,
facilities and environmental health and safety manager for Brush Wellman, a
manufacturer based in Reading Pa. "I like a distributor that doesn't just sell
me a product, a repeat product, but that is capable of having a good
engineering knowledge of their products and then understanding our process and
working with us to help make our process better." And that, he adds, is exactly
what Massasoit Tool does.