Wholesale Change host Ian Heller spoke with Kevin Short, President and CEO at ORS Nasco and Medco Tools, about the supply chain’s need to run on trust. Short offers insights into why distrust causes each channel member to operate with less visibility and efficiency – and, as a result, lower profitability.
ORS Nasco is a master wholesaler that supports industrial distributors. Short also leads Medco Tools, whose mission it is to delight transportation aftermarket jobbers.
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Ian Heller: Tell us a little about yourself and ORS Nasco.
Kevin Short: I began my career over 30 years ago in the warehouse first learning how the operations work. I didn’t understand the wisdom at the time, but now I see it prepared me for my later roles of increasing responsibility. I am grateful for it now.
I think that experience gives understanding about all the aspects of the business, allowing me to have empathy and understanding for what folks in the organization are facing. It is important to have an appreciation for all the hard work that they bring to the table. Along the way, I learned that it’s critical that you make promises that your customers can take to the bank.
I started with ORS Nasco on Jan. 1, 2020, about 10 weeks before the world turned upside down. It was an intellectual challenge and growth opportunity I couldn’t pass up. As a lifelong distributor, I was now able to call distributors my customers and my partners.
ORS stands for Oklahoma Rig Supply and the genesis of the company began in serving the oil fields of Oklahoma. Decades later, we serve all of the United States and Canada, as well as a large chunk of the Middle East with several hundred thousand SKUs. We’re fortunate to have about 1,150 associates working in our organization doing outstanding work. Our reason for existing is to provide convenience to both the manufacturing and distribution communities. With 24 fully stocked locations and over 1,000 suppliers, we provide distributors with what they need exactly when they need it.
Heller: You do more than fulfill orders; you help distributors generate demand for those products, right?
Short: Yes. We provide training, education and technology support as well as assistance with B2B services. We want to be more than a product company and more of a distributor enabler. Our philosophy is committed to the concept of pure wholesale. That means 100% of our revenue goes to distributors to help them serve the end-user market. We are always aligned with them, never in a position to compete against them. From there, we have become a trusted advisor for the distributor helping them accelerate and grow their business.
Heller: Can you give us some examples of the support you offer distributors?
Short: We offer support on everything from pricing to recruiting, category management, technology management as well as support on customer facing activities to help them be better, smarter, faster. If we do something from a departmental and functionality standpoint to operate our business, we gladly make that expertise available to our customers.
When I started in distribution, inventory was the ante to be in the game. Now, I would say inventory is taking a backseat for the distributor. They are focusing on things like services, troubleshooting and problem-solving and allowing us to be that link in the supply chain and attend to the inventory side for them.
Heller: What are the top traits that your best performers display daily?
Short: We are laser-focused on flooding the company with people that exhibit four characteristics. It starts with likability. It is a team-selling environment, and you want to really like and respect the people that you work alongside. The second trait is tenacity. There are all kinds of challenges that get thrown at you — some of which you walk into, some are thrust upon you — but the idea is that you live your life and conduct your business with the belief that tomorrow will be better. You have an ability to pick yourself up, push forward and move it along. The third is curiosity. The world is changing so fast, and we want people in our organization always asking questions, challenging how we’ve always done it. That’s how you unlock invisible opportunities. Finally, it’s humility. We have to believe that we earn our customers’ business and trust every single day. We can’t take that for granted.
Heller: What is one of the most important characteristics you look for in a supplier partner?
Short: Trust. There has to be a clear understanding of the roles people play to be successful in the supply chain. Over the last decade or so, the lines have been blurred. We’re on an ardent mission to unblur those lines and have people recognize the best teams each have a role to play. As I assess and evaluate suppliers, we’re looking for people that appreciate our pure wholesale philosophy and understand the value we bring. The end-user has no time or appetite for duplicative effort. We, the supplier and the customer, have to trust each other to attend to business.
Heller: How do you educate your distributor customers on how to mitigate risk in the supply chain as the global landscape continually changes?
Short: De-risking situations is at the core of how we earn our living. The supply chain has thrown a wrench into everyone’s plans. No one can forecast the way they could in the past. Safety stocks are all over the place. There are more challenges than solutions. We believe with communication, more technology and greater visibility customers will consider our inventory. They can worry less about what’s on their shelves. Instead, they can rely on what’s on ours.
Heller: You’ve said trust isn’t something you claim but rather something you earn over a long period of time. How does trust play into your relationships throughout the supply chain?
Short: Pure wholesale is the beginning. If we tell our customers that we stand with them and don’t compete against them, this is the door opener to a high-trust relationship. During this time in the world, there are calls for more trust. Coming out of the pandemic, people became a more isolated and involved in independent activities, it’s easy to forget that two heads are better than one. It’s amazing what people can accomplish when they don’t feel like they have to do it all alone, when they can trust one another and let down their guard.
We recently had a national company event and brought in a man by the name of Stephen Covey. He wrote a book called “The Speed of Trust.” He talked about how it does no good to be the jerk who gets things done. Alternatively, it does no good to be someone who is incredibly pleasant but gets nothing accomplished. Credibility is enhanced when those two things are balanced. He also talks about the tax that comes from mistrust. There is wasted time, energy and dollars spent on double and triple checking other people’s work and intentions instead of extending trust and managing disappointments that come in life. Things go much faster when you don’t live in a place of mistrust. Stephen says it very well when he says those who lead with fear don’t get things done as efficiently as those who lead with trust.
Trust plus empowerment creates speed. We have embraced that throughout our organization.
Heller: How do you pick the right people to build the right team and culture?
Short: We are still in the process. I’m very pleased with the executive team that I’ve hand-selected in my first three years. Purposefully, I recruited folks from other distribution backgrounds, some similar to mine, others dissimilar. We have the idea that if you understand what the client is dealing with, you can anticipate what is important to them.
From a strategic standpoint, we also are recruiting the next generation into our organization, living out another core value which is “Diversity accelerates innovation.” There are 150 colleges and universities out there now where young people are either getting a minor or a major in professional selling. They are spending four years learning and embracing the art and science of what professional selling is all about. We can, with the help of our suppliers, teach these young people the products and other value propositions.
Where trust plays a role, we have co-opted with a few of our most important suppliers and customers to trial a concept we call the ecosystem. We’re bringing suppliers, wholesalers and distributors to the table at the beginning of these people’s careers. We say, “We want you to work for three of these companies before you are 30 years old to gain experiences no one company can deliver.”
We trust each company to shepherd and look after these people and help them become leaders and problem-solvers earlier on in their careers than they would be with only one window into the market.
Heller: Many companies exhibit “WAYMISH” (Why are you making it so hard?). Can you speak to how suppliers and customers can work to reduce this problem in industrial distribution?
Short: That’s actually one of my favorite books [WAYMISH: Why are you making it so hard for me to give you my money? by Ray Considine and Ted Cohn] over the last many years. I’d recommend it to anyone listening. It shines a light on how companies have habits, policies and procedures that once upon a time made some sense. But as customer expectations shift, we have to revisit these policies. What once was a good idea, now inadvertently tortures your customers. I’ve made this required reading in our organization, and it goes hand-in-hand with empowerment.
I am sure there are things we do that are not as easy as I would like them to be. Our intention is to be frictionless. It empowers our folks to have the courage and confidence to say, “This isn’t in our customers’ best interest. Why are we doing it this way?”
We have examples of old procedures that once a light was shined on it, we fixed it in a matter of hours to take better care of our customers. It starts with having the confidence to speak up. I applaud those conversations.
Heller: There are efficiencies involved with your role in the marketplace. What are the value-added functions and efficiencies you produce for suppliers and your customers?
Short: We endeavor in our mission to create frictionless high-value relationships in both directions. It’s very important in terms of where we sit in the supply chain. I also think about it in a more advanced way in terms of the future state of efficiencies. I speak to other like-minded companies and if you trust each other, you can pool resources and lean on one another to get better capacity utilization, for example, in a customer’s warehouse.
Most people’s second biggest cost is freight and transportation. By being more thoughtful and co-oping other people at the table, we can get better utilization of fleets and truck movement for greater efficiency and cost-effectiveness.
Heller: Regarding the future of wholesale, we see suppliers selling direct in some cases or they are selling on marketplaces. We hear a lot about Amazon Business, we have Zoro marketplace and new technologies that are emerging. Then there’s ChatGPT. It’s hard to keep up. As a person in the middle of all these relationships, what do you make of it?
Short: I wouldn’t have accepted the role three years ago if I wasn’t very bullish on what wholesale can do for everybody in the supply chain. I’m a distributor at heart. I love distribution and I believe distribution is only going to grow. I believe wholesale will become a bigger part of that future recipe.
As a lifelong distributor, I think of it this way: In the early part of my career, if I had one last dollar to invest, I would have put some more inventory on my shelf. I no longer think that’s the right answer. Today, if I were a distributor and I’ve got one last dollar to invest, I would lean on a wholesale inventory investment and act as if their products were my own. I would then spend that last dollar on technology to be faster or I would spend it on people that solve problems.