Satisfied with your distributor?
January 1st 2005

In recent issues IP&E has addressed the pros and cons of the outsourced maintenance arguments.

Here, Ian Clay met Sean Fennon, of Monks & Crane Industrial Group and many of the same issues were raised as we discovered that the company had so much more to offer than just being a distributor

Business and the way companies interact is changing. Customer requirements are becoming more specialised and demanding as we all become more sophisticated and ‘forward thinking’. Customers are demanding better products and services, faster response times and added value in their relationships with suppliers. In all market sectors, meeting these demands requires organisations to control their supply chains in order to increase efficiencies. Companies have to optimise how they buy, what they buy and who is actually buying. If companies do not deal with these issues it may result in the duplication of articles, overstocking, large numbers of suppliers, over-complicated processes within the supply chain and can ultimately lead to a lack of focus on core competencies. Streamlining the procurement of Maintenance, Repair and Operating (MRO) materials requires a structured approach, but the base principles and cost drivers underpinning these processes are universal.

It is this capability to satisfy customer requirements, whether that be straightforward transactional business right through to the development of full integrated supply solutions, that in its totality positions Monks & Crane Industrial Group as ‘the full service provider to industry.

A mighty boast perhaps, but as Monks & Crane Industrial Group’s parent company is Würth GmbH & Co, (the global distribution company that employs 61 000 people and has revenues of 6bn Euros) the company has the muscle to back it up.

Würth’s customer relationship focuses on a passionate commitment to maintaining close personal contact with its customers. The success of the group has provided the financial stability and experience to enable its business operations to grow within a rapidly changing market place.

This philosophy is the corner stone of Monks & Cranes approach to its market position. The development of strong relationships with both customers and suppliers is paramount in the day to day decision making of Sean Fennon, managing director of Monks & Crane Industrial Group.

In a market of increasing consolidation and centralisation Monks & Crane Industrial Group is continuing to plough an individual furrow. Firstly, the company has maintained its local branch network (indeed it is looking to increase its number of branches). The company strongly believes says Sean that it must be viewed As a local supplier staffed by local people who understand the require-

ments and demands of the local customer.

Sean relates the story of how banks have recently outsourced their telebanking staff to far flung destinations, so when you phone up and say you are calling from Birmingham, they ask Which country is that. It doesn’t inspire any confidence that the person on the other end of the phone is going to be able to deal satisfactorily with your particular problem. We strongly believe says Sean that local contact is vital and we build our business and our network along those lines.

its National Distribution Centre, located just outside Birmingham. Here, the company trunks the required products to its branches over night to arrive by 6am the next day.

Sean Fennon says of the company’s network that It is more expensive to do the trunking than send the products by external carrier but in this way it is controllable and expandable. Even given the state of the UK’s road infrastructure the company finds that this system works smoothly - it has to, as they trunk every night to Aberdeen! As well as providing next day delivery the company also offers in-depth technical support and ‘added value services’ including: consignment stock, stores management, supplier management, technical support, management information systems, JIT (ship to store, ship to line) and after hours ordering.

Monks & Crane offers the above listed ‘added value services’ so that its customers can concentrate on their core competencies.

However, as well as taking these functions over in existing operations the company also operate a projects support unit. This specialist unit, includes experienced personnel from industrial backgrounds who possess the necessary skills to help develop business solutions that will enable customers to focus on controlling total acquisition costs. What we have here says Sean Fennon is customers allowing us in [to their organisation] so we can develop processes alongside them. We have people with Six Sigma backgrounds for example. Monks & Crane has an impressive list of blue chip customers that it has been involved with on a project basis over a number of years.

Sean Fennon sums up the project work saying Most of the projects we get involved with are pretty tough because there tends to be a difficult problem to be solved.

Integrated Supply Chain Management

Over recent years many companies have focused their attention on their key core competencies; however, they still have their non-core activities to attend to. As a result more and more companies are seeing that their non core activities such as stores management, high transactional purchasing and the attendant administration are all time consuming, financially costly and difficult to manage.

The option to outsource these ‘back office’ non-core activites therefore becomes a requirement to free the companies from these restraints and this is why Monks & Crane’s Integrated Supply Chain Management (ISCM) Solutions, redefine business processes associated with procurement, logistics and administration within an organisation to create greater operational efficiencies.

Companies with a fragmented indirect materials purchasing policy have inherent problems in relation to how they buy, what they buy and who is actually buying. This can result in duplication of articles, overstocking, redundant processes and the overcomplication of the supply chain leading to a lack of company focus on their core competencies.

Without the proper control of nonproduction and MRO materials purchasing, the organisation has no effective leverage with its supply base to optimise buying prices and this situation inevitably leads to an increase in the number of suppliers.

Many organisations also lack the necessary information to attack and lower the total acquisition costs of non-production and MRO items, including stocking, distribution and handling. Also, information on spend by supplier, commodity, budget holder and operative is rarely available. Dedicated and skilled individuals help to promote Monks & Crane’s effectiveness in this area, the outcome being that customers are free to focus solely on their key core competencies, comforted in the knowledge that their back office activities are being managed effectively.

The major advantage of using these added services is that there is only one point of contact involved and more importantly one invoice.

This applies to the company’s product range which includes more than 45 000 catalogued items and includes everything from abrasives to cutting tools and from maintenance consumables to safety clothing and equipment.

Monks & Crane’s business philosophy has been to sell high quality ‘branded’ products, but due to the price pressures from the market this has had to be reviewed in line with customer demands. However, Sean Fennon is adamant that this pressure will not lead Monks & Crane to change its policy and follow the trend of many competitors by introducing ‘cheap and cheerful’ own brand products. Instead the company has introduced the European ATORN brand which in the words of Sean creates a brand that people can relate to with a range of high quality products, at competitive prices. The introduction of ATORN has been developed as a European brand exclusively for Wurth’s Allied Companies - of which Monks and Crane are one - assisted by the implementation of a central Purchasing Marketing Committee (PMC) group, which utilises the huge buying power and product testing facility to the benefit of the Allied Companies.

Therefore the quality is maintained while extra leverage is created. Establishing this European brand has been a long process and one which will develop over the next five years. At the present time there are over 8000 ATORN branded products available, many of which have been tested against quality branded products by experienced Monks & Crane employees and knowledgeable customers.

Another area of dramatic growth for the company has been in the area of Personal Protection Equipment. The company has always sold these products but the range has been dramatically extended and now has its own SHE (Safety, Health and Environment) catalogue that has over 20 000 products. The area of health and safety is one where Sean believes that Manufacturers and distributors must work hand in hand. Monks & Crane is investing in training for its employees, presently having many of its staff trained to NEBOSH level and realises that product training from manufacturers is the bare minimum to recommend a product safely.

As well as establishing all the on-going supplier contacts required to compliment the ATORN brand, Monks & Crane has been going through a rebranding process, so that it now is is known only as Monks & Crane Industrial Group (If you don’t know the other facets then I won’t confuse you by naming them).

From a single entity it is determined to be ‘the full service provider to industry.’ It is at this point that the company’s close relationships with their customers should bear fruit. Our customers says Sean understand that we need to make some money, but also that we are going to work really hard for it. Our ambition is not to be the biggest, but to be the best so that when they want something specific, then they come to us.

In the tough world of UK manufacturing the solid foundations that Monks & Crane has laid will, Sean is positive, mean that when the inevitable ‘difficult conversations’ arise concerning matters that could include changes in customers processes, then the company will be close enough to the customer to address these issues and find positive solutions to increasing efficiencies rather than just looking at reducing the price of an article. A situation that inevitably leads to a lowering in quality, productivity and safety for the customer in fact the very opposite of what they are trying to achieve.