FOR some in the parts business, selling parts is a lot like playing baseball games. You do it one at a time.
Not so at Drive Products, a multi-store operation spread across Canada. From Vancouver to the Maritimes, the idea is the same: Sell the system.
Sure, customers are welcome to come into a Drive Products location and buy a hose or a driveline. Every part and component that Drive Products represents can be bought as an individual piece. But increasingly the company is setting itself apart from the competition by positioning itself as technical experts capable of designing complex systems that consist of hydraulic, electronic, and mechanical parts.
“We have shifted from being a parts supplier to a systems supplier,” says Leon Lukasik, sales manager for eastern Canada.
“Our advantage is that we can bring in experts, either through meetings or conference calls,” says Ro Kumar, manager of product management. “We take responsibility for it all. OEMs want to sell their parts. We want to sell solutions.”
In its early years, Drive Products served as a warehouse distributor, providing parts to other companies to sell and install. But today, the company also offers installation of the products.
“Before, we could design a system, but we were at the mercy of the distributor for the installation,” Lukasik says. “We realized that we needed to control the installation.”
The decision triggered a building boom at Drive Products. For more than 15 years now, the company has been expanding, opening sales and service locations across Canada. Corporate offices are in Mississauga, Ontario. From there the company operates branches in Vancouver, British Columbia; Calgary and Edmonton, Alberta; Montreal, Quebec; and Halifax, Nova Scotia.
In an effort to make it more convenient for customers to do business with Drive Products, the company is opening multiple locations in major markets. Drive Products already has two locations in Edmonton, where the booming oilfield service industry is a major consumer of hydraulic and driveline products. A second location is coming in Calgary — another major oilfield market — and in Toronto, where the demand is strong for a wide range of applications, including snow and ice control equipment.
Designing the location
With the exception of Vancouver and Halifax locations, the Drive Products buildings were constructed to company specifications. The Vancouver location was an existing building that Drive Products modified to more accurately serve the company's needs.
“It's difficult to find a building that is ideally suited for what we do,” Kumar says. “Each has to be set up as a warehouse, but we also do a lot of manufacturing.”
Among the components Drive Products assembles: drivelines, control cables, custom control consoles, hose assemblies, valving, PTO assemblies, pumps, and hydraulic motors. But beyond the warehouse and manufacturing functions, the buildings also have shops where the systems are installed and a retail area where parts can be purchased and a showroom where they can be displayed.
“Getting all of these functions under one roof has been a real challenge,” Kumar says.
The locations range from 25,000 square feet in Vancouver to 110,000 square feet in Toronto.
Every Drive Products branch is identical, other than the scale at which it operates. The Toronto operation is an exception because it houses the company's engineering, accounting, marketing, management, and human resources departments. But in spite of that, president Russ Bilyk and CEO Greg Edmonds are based in Edmonton.
“Technology makes that easy,” Lukasik says.
Because of the breadth of the company's product line, Drive Products has subdivided its product mix into 10 areas. Each area is the responsibility of a product manager, all of whom are under Kumar's direction.
“Each of our product managers is in charge of the people within his area,” Kumar says. “We place a lot of emphasis on training. With our product line, you can't expect one person to have the depth of expertise that we require. When you stand 100% behind the products as we do, expertise is imperative. It's too much for one person to know, which is why we have product managers.”
- Fluid transfer
- Power transmission and control
- Industrial hydraulics
- Liquid bulk
- Recreational winches
- Heavy winches
- Snow and ice control
- Snow and ice equipment
- Bulk pneumatics
- Mobile power
“We are specialists in mobile power,” Lukasik says. “We have partnered with a local college to provide curriculum for their classes on hydraulics and pumps. It's a completely different field from industrial hydraulics. In industrial applications, the temperatures are the same, and the equipment is stationary. System designs are completely different. They have to be because they operate in a different environment.”
Kumar says his big challenge in supervising 10 product managers is to keep everyone's system focused.
“As a group, we understand what works,” he says. “We need to pull our knowledge base together. We all rise or crash together.”
Drive Products has approximately 30,000 part numbers in its system. The latest version of Microsoft Great Plains management software helps the company manage its sales and inventory.
“Accessibility to information is a huge issue with us,” says Paul Weatherbie, marketing manager. “We have to have something that is reliable and that can be available at all times to our different locations.”
The computer system is a great communication tool. The various time zones limit the ability to talk on the phone. By the start of business in Vancouver, the folks in Halifax are already through with lunch.
One major application for the computer system is to integrate information for the company's entire product line, making it easier for Drive Products to offer custom, technical publications for its customers.
A new high-end printer generates catalogs — complete with tabbed dividers — that are designed for individual customers. Weatherbie's department scans drawings, adds text, and prints the entire catalog as a single document. Software can be programmed to insert tabbed dividers wherever needed. The same technology can be used to integrate the information for the various components installed on a truck to provide the customer with a personalized owner's manual for his custom vehicle.
“We package the literature, maintenance schedule, and other information,” Weatherbie says. “It's just like the owner's manual for your car. We try to make things as user friendly as possible.”
Drive Products has seen sales of snow and ice control equipment grow sharply in recent years.
“We had a void in winter,” Lukasik says. “We took on snow and ice control products as a filler for sales during the winter months. It has grown to become a major portion of our business.”
Drive Products focuses on sales to municipalities. Retail sales of smaller snowplows typically are handled through a network of 150 sub-dealers across Canada.
“Snow and ice control products should be sold to customers who are close by,” Lukasik says. “Customers don't want to drive long distances in a snowstorm to get their plows serviced. Our sub dealers have a territory that covers about a 20-minute drive. They have a geographical territory based on population, and they receive a commitment from us not to sell in their area.”
The company's sub distributors place a pre-season order with Drive Products and then draw from that inventory throughout the season.
“We provide them with marketing support,” Weatherbie says. “We can create pricing for them, and we produce product manuals that they can use for sales to light-duty customers all the way up to some municipal truck applications.
“Other companies also use sub dealers to sell their product, and we sell product to them, too. That's especially true for complex jobs that might be sold to municipal customers. Frequently other companies will hang the iron and we will install the controls.”
Greg Edmonds established Drive Products in 1983 to supply truck-mounted products and systems in Ontario. The first location was a 3,000 sq-ft leased building in Toronto. He had three employees and $100,000 in inventory. Today, Drive Products employs over 200 people throughout its system.
And it has grown by selling a system.