Hazel Park-based Motor City Industrial is a supplier of industrial manufacturing products run by president and CEO Joe Stephens. DBusiness Daily News spoke with him about how the supply chain industry has evolved and where he sees it going as technology continues to play a growing role in efficiency.
DDN: What is Motor City Industrial’s role in the manufacturing industry?
JS: Motor City Industrial has been in the Detroit market for 50 years and it was owned by Bob Puskas and purchased by two private equity companies, Oakland Standard and Kian Capital, in 2015 and is a private equity platform acquiring other industrial suppliers throughout the United States, but focused on the Midwest and the Southeast. It is primarily a supplier of industrial supplies and Class C consumable items like fasteners, safety products, industrial tools, cutting tools, and power transmissions to suppliers and manufacturers. Manufacturers of durable goods are our primary customer, as well as anyone in Detroit making anything of steel. At the most basic level, Motor City Industrial is a supplier, but manufacturing has changed as U.S. manufacturers have to complete globally and there’s more and more pressure on our sector to be efficient. We look at ourselves as parts providers, but we as suppliers also need to realize that it’s about the larger product and that customers aren’t just buying our parts, it’s about the process and the system too. So our role is to automate supply chains within our customers.
DDN: How is smart technology changing your business?
JS: Technology doesn’t change businesses, people do. What technology does is provide data and when people have all of the information, they make better decisions. So, what we’re doing at Motor City Industrial is creating a suite of distribution technologies for product disbursement. So that looks like providing weight-based scales to manufacturers that measure their components usage by weight, vending machines that employees can scan their badge to get safety supplies, and providing industrial lockers so expensive diagnostic equipment can be controlled. We provide systems like this so consumers can use this technology to control their consumption within their manufacturing plant. When we provide these technologies, they’re just providing data, but it’s at the employee level, so we can track and monitor where all of the parts are going throughout the plant and show customers what’s taking place. When you use data at this level, you can map out their supply chain. Until you know where all your parts are going, you can’t actually improve anything.
DDN: What impact can implementing these improvements have on a company’s bottom line?
JS: There’s three basic areas, the first is consumption. When we deploy our solutions, the average customer reduces their consumption of parts 20 percent in the first 30 days. As soon as you start tracking the product more efficiently, you use it more efficiently. The second piece where we impact the bottom line is waste, which most have in their small parts business and can be as much as 10 percent. Most manufacturers overlook waste because the value of the object is so small, but when you consider an entire plant with 100 employees, that adds up quickly. So, putting the product in some kind of supply chain management technology eliminates waste dramatically. In my opinion, the most overlooked area is the cost of employees’ self-supply systems, meaning most manufacturers can put all of their product in one single location called a crib, but the average employee goes between their workstation and the crib three times a day. Again, at a plant with 100 employees, that’s 350 trips per day, which is about 11 percent of production time. So impacting the bottom line with technology helps improve companies’ bottom line in all three of those ways.
DDN: What improvements can older facilities make to improve product inventory and logistics?
JS: Most manufacturers are scared of technology solutions because of its capital intensity, it looks expensive. But at Motor City Industrial, we’ve found a way to provide the machines at our cost, and we’ll essentially put up the money for the machine, and all we ask is that they buy their parts from us. Our machines themselves are cloud-based, so there’s no hardware or software to implement, we just need a 110 outlet and a cat-5 cable and the machine can be up and running quickly. In older facilities that’s important because it’s difficult to remodel a facility for these supply chain facilities, but technologies that are plug-and-play can mean cost savings very quickly.
How do you think the industry will look in the next 10 years?
JS: I think it’s actually rather obvious if you simplify what’s going on, and the reason I say that is that automation is impossible to avoid, we see it everywhere in manufacturing, whether its robotics producing the goods or anywhere else. To compete in a global marketplace, the American manufacturer has to innovate, so one of the last frontiers is the supply chain process and supply chain automation is really important in this industry. It’s not that people aren’t important, they are, and someone has to interpret the data. What supply chain technology will look like over the next 10 years is that product disbursement will take place closer and closer to where it’s being used. As suppliers and distributors, we’ll have more pressure to provide these solutions, and I think we’ll get better at it because we’ve collected a lot of data in the machines we’ve deployed. We’re almost to the point where we can predict their use of a product before they know they need it.
More information about Motor City Industrial can be found here.