On Jan. 3, Motion Industries Inc. completed its $1.3 billion acquisition of Kaman Distribution Group (KDG). The deal merged Motion, the fifth-largest distribution company according to Source Today’s Top 50 Industrial Distributors listing, with KDG, which is ranked 20th on that list.
Power & Motion recently discussed the deal—and its implications for customers—with Randy Breaux, president of Motion.
Power & Motion: Talk about the value of the Kaman Distribution Group (KDG) acquisition, both in terms of what it means to your customers and Motion as a company.
Randy Breaux: Obviously, we believe that bringing together the two companies will greatly benefit our customers and our business. As a single provider, Motion can now bring our customers solutions and services that each business may have had separately, many of which complement the other. Motion tended to concentrate on national customers, while KDG focused on smaller, regional customers. Combined, we now serve all customers with greater technical resources, more products and more services/solutions than before.
P&M: The supply chain challenges of the last year continue. How does this addition of KDG to the Motion portfolio address these issues? Are there economies of scale that help Motion address some of these supply chain issues for its customers?
RB: Yes, they do continue. We have been fortunate, however, as both Motion and KDG have done an excellent job since late 2020 to manage the supply chain issues we saw in 2021 that are carrying over into 2022. Most of our products do not come from overseas; therefore, we may not be as vulnerable as others who import many of the products they sell. However, we expect to see continued supply chain challenges through the balance of the year.
Motion has always been the largest customer for most of our suppliers, and adding KDG only makes us that much more important to our strategic suppliers. We have a great group of strategic suppliers who support Motion and our customers very well. That will only strengthen as we continue to grow.
P&M: What do you see as some of the causes of—and some of the opportunities from—the supply chain challenges we face today?
RB: The supply chain issues we face today result from many different issues over many months and years. I couldn’t even imagine starting to discuss the causes with our limited time. However, I think it is a bit easier to address from an opportunity standpoint. First, those with inventory are in the best position; of course, it has to be the right inventory.
So inventory management leading up to the present crisis was key. Fortunately, both Motion and KDG did a very good job securing inventory to help manage the supply chain situation we are in. The result is that the customer grants the business to us versus a competitor that didn’t address the supply chain issues as well as we did. It’s the old adage, “You can’t sell out of an empty wagon”—which is true!
Second, having solid relationships with your strategic suppliers is also critical during these times. Providing our supplier partners with accurate demand needs, consistent orders and bills paid on time certainly helps strengthen relationships with our key suppliers and eases tensions over supply chain issues. This makes them want to do business with Motion rather than one of our competitors.
P&M: Distributors have a changing role for their customers. It’s not just about parts delivery, but you’re also helping customers craft solutions to their issues. Talk about this evolution and how the KDG acquisition helps in that effort.
RB: This is correct. Most of our customers do not look to us only to provide a product; they want us to provide technical and engineering support and solutions for their applications. While some of our business is just replacing a part number that is called in with the same part, in most cases we help a customer identify a better solution than the one that just failed.
We are fortunate to add many very technically savvy KDG teammates in the business’ fluid power, automation and general power transmission areas. People with this type of experience are hard to find today, so the addition of the KDG team is a real benefit.
P&M: The fluid power industry, in particular, continues to change with the expansion into electrification and hybrid systems. How does Motion see the fluid power market, and what do you think the future holds for the fluid power market?
RB: We are very excited about the additional fluid power opportunities that the KDG acquisition brings to Motion and our customers. As we look at all industry sectors, they have to identify ways to automate processes due to necessity—not necessarily desire. Automation comes in the form of fluid power, pneumatics and electronic motion control.
As we look ahead, we believe that these technologies will continue to blend, and solution providers like Motion will need to be experts in all three areas. We are now well positioned with people and skillsets to bring all the solutions our customers require in the years to come.
