Bell RPG operations are re-energized

Rod Sundblad, divisional vice president for Bell Industries’ Recreational Products Group, says the powersports parts, garments and accessories distributor spent the past three years reorganizing its business on multiple fronts, and says he is confident the company now has the infrastructure in place to support continued growth.
Sundblad, during a recent conversation with Powersports Business, discussed topics ranging from personnel changes and facility updates to the company’s introduction of an online ordering system and revamped approach to warehousing and fulfillment techniques.
Founded in 1952, Bell Industries, Inc., is publicly traded on the American Stock Exchange (BI). Bell’s business operations include the Recreational Products Group (distribution of aftermarket recreational products), the Tech.logix Group (information technology lifecycle services) and J. W. Miller (specialty electronic components).
Bell Industries, Inc. reported consolidated net revenues for the first quarter ended March 31, 2004, were $34.4 million, up 7% from $32.1 million in the prior-year period. At year-end 2003 — Dec. 31 — Bell reported no bank debt, net working capital of $17.8 million and cash of $12.2 million. Shareholders’ equity totaled $21.6 million, or $2.58 per share.
The Recreational Products Group, a part of Bell’s portfolio since 1968, reported net revenues of $11.5 million for the 2004 first quarter, an 8% increase from the $10.6 million posted for the first quarter of 2003. Operating income improved to $106,000 from $61,000 a year earlier. For full-year 2003, Bell RPG reported sales of $44.8 million, compared with $44.6 million during 2002. The unit posted operating income of $1.3 million, versus $819,000 the prior year.
Founded as an RV product supplier in 1958, the business now known as Bell RPG offers approximately 35,000 parts and accessories to more than 4,500 recreational product dealers and service centers throughout the Northern Midwest.
“In the late 1960s and early 1970s, we were into RV and snowmobile and just entering the motorcycle parts distribution business,” said Sundblad, a 33-year veteran of the company. “We expanded from the Twin Cities to Milwaukee and Michigan, then entered the Marine parts distribution business about 15 or so years ago.”
Sundblad says RV business currently makes up the largest segment for the company; marine comes in second; and the balance is made up of motorcycle, snow and ATV. Operating a fleet of its own delivery trucks, the distributor delivers same-day and next day to customers in key market areas — including Michigan, Wisconsin, Illinois, Indiana, Ohio, Minnesota, Iowa and the Dakotas.
When talk revolves around recent changes at Bell RPG, Sundblad said reform started at the top. “Most specifically, we’ve migrated from a decentralized company, in terms of responsibilities and control, to being directed by a centralized senior management team.”
The senior management team consists of Sundblad; Trent Walden, group sales manager; Marc Higgins, director of purchasing and logistics; and Val Felske, division controller.
It’s the team’s task to direct key initiatives from within the 170-employee unit that currently operates three facilities, the 70,000 sq. ft. headquarters in Eagan, Minn., a 67,000 sq. ft. warehouse in Germantown, Wisc, and a 50,000 sq. ft. site in Grand Rapids, Mich.

Sales Team
Bell RPG’s sales team is a made of a combination of inside and outside people. Trent Walden told Powersports Business recent changes affected his team, as well.
“A lot of our selling has been from inside sales people who sometimes ventured out,” he said. “We have now established more defined outside positions in some of our key market areas. And, in the case of cycle, snow and ATV, we have now hired independent reps who I would consider wired into the network.
“So, what we have now is more of an outside force that’s able to drop in on retailers for face-to-face visits and create some activity that we weren’t able to generate from the phone.”

RPGOnline
Another factor Walden says has influenced business for the better is the creation of RPGonline, which gives Bell RPG customers the ability to get immediate order confirmation and allows them to gain access to inventory real-time, 24/7.
“We now have probably 30% of our major customers who are now participating, using that on a daily basis,” Walden said. “Probably 10% to15% of our orders are generated through online activity. Our customer feedback has been really high, and our expectation is that, within a couple of months, 25% to 30% of our orders will be placed that way.
The site currently is Web-based. Walden said Bell RPG hopes to implement an interface between dealer management software and its “Web OE” within the next 90 days.
“And it’ll use universal software, allowing any dealer management software to communicate with our system,” he said.

Logistics
Marc Higgins, Bell RPG director of purchasing and logistics, said the company’s aggregate fill-rate is a high 98% to low 99% on average, in the high 80s per branch.
“Our goal is always to fulfill the customer order from our facility closest to him,” Higgins said. “Sporadically, we have to do drop-ship. For instance, rain suits are moving stronger in some markets this year, so we have to shuffle some things around to get them into appropriate locations.
“There’s a 12/80 rule — 12% of our inventory accounts for 80% of our business. So we’re developing best-in-class inventory replenishment models for our highest velocity inventory. The result so far has been getting the demand-based automated purchasing system in place, introducing the Web OE and getting great feedback, bringing up the dealer software interface, and getting a wireless hand-held order-picking system in the warehouse.”

Product
“While we sell to the RV, Marine, Snowmobile, Motorcycle and ATV markets, we have many customers who also sell to all of those markets. And if they’re not selling to all of those niches, they are at least selling to a combination of a couple of them,” Sundblad said. “What we’ve been doing is focusing on optimizing the lines we have, building up business. And now, for the 2005 business year, we’re looking at bringing some new lines.”
“We’ve long been looked at as offering a full breadth of ATV and snowmobile product,” added Walden. “In motorcycle, we had a much broader line than we have today, but we are aggressively looking for opportunities to expand key lines — strategic lines that will fit niches that we’re trying to support.” psb