Houston-based industrial PVF distributor and supply-chain solutions provider DistributionNOW traces its legacy back to 1862 when Oilwell supplied oilfield equipment to the upstream market. Through strategic mergers and acquisitions, the main component companies Oilwell Supply (1878), National Supply (1894), Wilson Supply (1921) and CE Franklin (1995) came together this year to form DistributionNOW. Each of these companies, along with many smaller acquisitions over the years, has added to DistributionNOW’s product expertise, market segment experience and best practices. The company now has more than 330 global locations and employs more than 5,300 people. DistributionNOW’s executive management team recently took time to talk to Supply House Times about, among other topics, the company’s structure and its future.
Supply House Times: Where does the biggest part of your business come from?
DN: We play in two primary market groups: energy branches and supply-chain solutions. Today, 83% of our business comes from the energy branch side, but we are actively growing the supply-chain business. We are in all the key markets where our customers operate, including North America, Latin America, the Middle East, the Commonwealth of Independent States and Southeast Asia. We will continue to pursue growth in strategic-targeted geographies around the world and will expand different product lines both in North America and internationally.
Supply House Times: What does “Customer Priority One” mean?
DN: As Burk Ellison, president of our energy branches, says, “Customer Priority One is something we don’t just say. It’s something we live and breathe every day. Our customers really are Priority One.” Customer Priority One is a culture and a commitment embraced by our entire organization to make our customers our greatest priority. We are focused on clearly understanding our customers’ needs, offering innovative and cost-saving solutions, and then going the extra mile to exceed their expectations through accurate, on-time deliveries.
Supply House Times: How much of an online presence does the company have?
DN: We have an online catalog (at www.distributionnow.com) that allows guests and registered customers to shop for products, create a cart (or truck as it’s called on our site) and go through a secure checkout process. We offer Level 1 PunchOut/Round-Trip transactions in U.S. dollars. Standard features include product comparison, quick order by DistributionNOW item number and a multiple ship-to location function. Registered users can utilize additional features such as masks to hide non-applicable products, saved trucks for easy reorder, favorite products, order status, purchase history and preset order limits. These features make it easy for customers to shop for the core products we offer in our catalog.
Supply House Times: What does the supply-chain services part of the company bring to the table?
DN: A true partnership between a supplier and customer is only achieved if the supplier moves beyond the status quo of strict distribution and into the realm of strengthening a customer’s supply-chain foundation. We achieve this through our Supply Chain Services group, which provides customers with a full suite of capabilities that address their most complex supply-chain challenges, including warehouse space constraints and utilization concerns, supply-chain operational inefficiencies, surplus inventory, material integrity concerns, asset management, and material management and control. Once these problems are resolved, we work side-by-side with customers to manage their supply chain, which frees them to focus on their core competencies while we focus on ours — helping our customers achieve operational cost savings.
Supply House Times: With a lot of competition in the industrial PVF marketplace, how will DistributionNOW separate itself?
DN: We are a distributor with a legacy of more than 150 years operating in the upstream, midstream and downstream markets. Our market-based customer-service-oriented culture drives the organization to execute in a precise manner. With an average tenure of 25 years (including NOV and its predecessor entities), our management team has extensive industry experience. Our core competencies enhance these strengths:
- One global ERP system: We have implemented a single, integrated ERP system linking global branches, customers and suppliers. This greatly enhances our operational efficiency, enables immediacy of decision-making, and supports planning and optimization of supply-chain processes.
- Quality products: We serve as a one-stop shop for customers, selling more than 300,000 SKUs from thousands of vendors from a single source in proximity to their operations. Our purchasing volume and size of our network enable us to deliver competitive pricing to our customers.
- Distribution network: With more than 330 branches operating in more than 20 countries, we believe we offer a compelling value proposition for our customers who can utilize one distribution company as a strategic partner across their global asset base.
- Customer service: We are completely committed to the satisfaction of our customers, as proven by our Customer Priority One initiative and a company culture of service.
- Quality management system: Our quality program stands tall partly due to our Triple Impact Supplier Management Program, which ensures product quality through a triad of activities. This approach is composed of supplier audits for new and existing suppliers, ISO 2859-based QA/QC inspections, and a quality checkpoint program that monitors a supplier’s performance through KPIs and random quarterly checks.
- Flexible operating models: We provide our products and services for our customers through a combination of our branch network infrastructure, our export sales and our supply-chain services groups. Many of our customers currently are engaged in all our models and like our flexible approach that fits their needs.
Supply House Times: Where would you like to see the company in 3-5 years?
DN: We are a new company with a strong starting position and significant growth potential. We plan to use our no-debt balance sheet to double the size of our business and we will continue to expand our energy branch network internationally. We will improve our position by increasing our strengths in specific product lines such as valve actuation, safety products, artificial lift systems and electrical products. We are committed to significantly grow our participation in the downstream, industrial and manufacturing supply-chain market segments.
As an independent company, we also plan to supplement our organic growth and targeted international expansion with select acquisitions in key markets to further enhance our geographic reach, product catalog and other capabilities.
