Bill Ryan, CEO of Point Spring & Driveshaft Co., is very adamant about one thing: mastering business fundamentals is essential for business success, growth and longevity.
“I think people try to get fancy and try to go after the next trend,” he says. “We have been a business that has tried to really stick with the fundamentals because if you are not doing the basics correctly, you don’t have a foundation to build on. If you try to build on a weak foundation, you just don’t go anywhere.”
As a result, he adds, “Managing inventories is absolutely imperative. Managing our cash flow is absolutely critical, going after receivables, making sure our managers’ bonuses are based on income and sales and their inventory management and how they collect money, these things are important. This is what it is all about.”
Surviving The Bubble & Looking Beyond
Market conditions have changed dramatically since 2005 when Point Spring & Driveshaft was named the Truck Parts & Service Distributor Of The Year, yet relying on the fundamentals allowed the business to make it through relatively unscathed.
“We really did not cutback on services and we made a conscious effort not to cut back on people,” Ryan says. He met with his managers and told them that expenses needed to be reduced and anything that was not necessary needed to be cut.
“Obviously we eliminated overtime, but we made a concerted effort not to let anybody go because we know that this is a cyclical business and that it would come back. We did not want to lose good people. We had established a pretty good team and you did not want to cut somebody good who is on the team if you don’t have to,” he says.
Having the right people in place contributed to Point Spring not only weathering the storm but continuing to thrive. However, Ryan says that one of the biggest challenges he faces is finding people who can step into leadership positions in the future.
“This industry has been one where you had some good people come in, work a lot of their career and get moved into key positions, management positions,” he says. However he acknowledges that his business is lacking people with formal college educations. “We probably are lacking in MBA-types that I really think we are going to need them over the next 10 to 20 years. That is something we are trying to address. We will be looking at more people — not necessarily younger people — who have the MBA-type background to help us get to the next level.”
To reach this goal, Ryan has made investments in “people who have been in competitive situations who we thought brought talents and expertise we were lacking, people who could grow into another position or fill another position.” But he is quick to acknowledge that that is a short-term solution.
Beyond that Point Spring is recruiting at colleges, “and we have an eye on some younger people to develop over the next five years,” he says.
“Now at 60 years of age, I view that as my task to put people in the right place and then make sure they get the right kind of training so they can assume the positions in the next three to five years.”
Focus On Training & Marketing
Point Spring takes full advantage of any available technical training to help ensure that “our people are good product people,” Ryan says. In addition to that, Adam Diecks, marketing director, in conjunction with Point Spring’s sales manager, has put together a program to train the sales organization.
“If you look at what we are,” Ryan says, “we don’t manufacture things; we are a sales organization so we focus on that.”
The training began with the outside sales force. “But then we brought training in with the idea of building a team. So the inside salespeople are now getting trained and then there is a component for the delivery drivers that is being developed. If you look at those three groups of people, that is probably 65 percent of our organization,” he says. “When they finish, we will be reaping the benefits of it. It keeps everyone focused and looking the same way. It allows us to help people develop their strengths.”
According to Diecks, Point Spring’s outside sales force is one of its best marketing tools. “We have 15 to 20 guys who are out on the street every day seeing their current customers and seeing new customers. We do a lot of training with our guys — sales training and product training. One of the things we tell them is not only are they selling a product but they are selling the same product as a competitor.”
He adds, “If we train them in how to sell themselves and how to sell the features and benefits of Point Spring that the competition doesn’t have then it does not come down to a difference of a quarter on the part we are selling.”
Point Spring does not do a lot of mailings to promote itself but it does partner with key suppliers who go out in the field with the sales staff. “This shows customers that if they have a problem and our guys can’t solve it, we will bring in manufacturers to help out,” Diecks says.
Ryan says he relies on Diecks to look at technologies that need to come into the business. “We are not a telecommunications business or [other high-tech company], but we need to bring those kinds of technologies into the business to facilitate what we are doing,” Ryan says.
Point Spring uses a homegrown software program. “We make sure it does whatever we need. We really are nimble with it. If we see something that has happened in the field in the way of sales or getting back to basics, we can program it and make it happen. That is a real strength for us.”
Point Spring also has a technology committee that is looking at what the sales force will need over the next one to five years and how it will help them be more effective in the field.
EDI and VMI also play a big role at Point Spring. “That has been one of our biggest initiatives over the last 10 years,” Ryan says. “We have really pushed it.” So much so that Point Spring has been a beta site for at least one manufacturer’s online ordering system.
“VMI just made sense for us so we made a full-court press on everyone for VMI and that has made a difference for us. Whenever we can we utilize EDI in the way of advanced shipments, information from vendors to us, from us to vendors and from customers to us.
“We have online ordering for our customers. Where ever we can put EDI or some electronic thing in place, we try to do it,” he adds.
Fitting In New Products
Point Spring uses a select roll out option when it adds new products, picking one or two stores as test sites. “If you are going to bring in something new that people are not familiar with, they tend to shy away from it,” Ryan says. “If we have a location where they are having some success, it is much easier to migrate [the product] to other locations.”
John Rader, vice president, is constantly reviewing products. In addition, staff members attend HDAW and Point Spring is a member of HDA Truck Pride. “Those are times we are really kicking tires and finding out what is out there and doing an analysis to see if it makes sense to bring a product in.”
As an 87-year-old company, Point Spring has taken on numerous product lines, too many in Ryan’s estimation. As a result, one of the things the company currently is doing is consolidating product lines. “That is something you continually have to do. There is obsolescence, there are some product lines that don’t make sense in the market anymore,” he says.
Future Growth & Service
In the past most of Point Spring’s growth has come from both greenfield operations and purchasing companies. “Right now unless someone brings us an opportunity that we believe is good fitting and makes sense for us geographically, we would probably go with more of a satellite location,” Ryan says. “That way we do not have a commitment in brick and mortar, tons of inventory or personnel. That will allow us to get a good feel for what a market requires and how it is going to grow. We will have a presence in the market but we may not [initially] have a facility.”
All but one of Point Spring’s locations have service and Ryan sees service as vital to the company’s success. “Going forward to be able to service what we sell — and we prefer to do it without [an OEM] nameplate on the door — makes us different. Obviously we view the competition as the dealer network so we have to be more nimble and have better relationships. That seems to be working for us.”
Eleven years ago Truck Parts & Service embarked on a program to recognize the best in heavy-duty truck parts distribution. The award continues to stand as the independent aftermarket’s most respected and highest honor. This year’s nominees for Distributor of the Year are the top performing distributors, as chosen by their peers, representatives from parts suppliers and manufacturers and other industry leaders. For the next few weeks, Truck Parts and Service will profile each of the five finalists for its Distributor of the Year Award.