Big Enough to Serve, Small Enough to Care

BlackHawk Industrial
Written by Jessica Ferlaino

When it comes to the distribution and delivery of a broad range of products, capabilities and value-added services to industrial customers – predominantly metal machining and fabricators – size does matter. And nowhere is this more apparent than at BlackHawk Industrial, a company that is “big enough to serve, and small enough to care.”
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Since 2009, BlackHawk Industrial has worked to establish a footprint that spans the United States and even reaches into Mexico, while maintaining a level of localized service that goes above and beyond in ways that large distributors in the market cannot, with the scope and capacity smaller, local distributors desire.

Vice-president of Category Management David Allen said, “We have a very broad range of suppliers and as a result, we can offer customers almost anything that they need. Compared to local providers, we are likely broader in our supplier scope, and compared to large catalogue houses, we have flexibility at the local level to tailor our product offerings.”

With twenty-nine locations in fourteen states, figures that continue to grow by the day, BlackHawk Industrial is supported by a strong network of suppliers to ensure customers are getting the latest and greatest products and equipment at the best possible prices.

Scalability has been very important to BlackHawk Industrial, both in terms of how it was established and how it continues to grow. In a market dominated by behemoths and smaller local players, the company sought out to be different. Recognizing the need in the market for a distributor with the capacity to serve and the heart to care, backed by a private equity group, BlackHawk Industrial was established.

“They were looking to acquire a distributor they could leverage as a platform for a roll up strategy where you go out and acquire smaller businesses and build it into something larger, with additional synergies and scale,” explained CEO John Mark. When they found that platform didn’t exist, the started building it themselves, piece by piece. “They sought distributors on a similar ERP, with key supplier alignments and a strong market reputation. Ultimately, they formulated a footprint across the U.S.,” said Mark.

In 2015, after fourteen acquisitions, the company took a pause to focus on back-end integration, cultural alignment and generating a consistent experience across the company’s footprint. Through the adoption of systems and protocols across BlackHawk Industrial’s expansive network of assets, the company was better able to deliver consistent quality and service.

By the end of 2017, it had solidified its place in the market. In 2018, the leadership team took a step back and strategized how best to get the company back to its original vision and mission and build out its business model as a nationwide network. At the time, there was also the realization that the private equity group that initiated the roll up was no longer interested in funding the long-term goals of the company and the decision was made to sell to another private equity group in the earlier stages of its fund.

“That’s a function of private equity: a definite lifecycle to their funds. And we had just been on the tail end of that, so they were not willing to invest further in the long-range vision,” said Mark. He and the leadership team set out to sell that vision to the next logical strategic partner.

Discussing the 2018 acquisition of BlackHawk Industrial, Mark noted, “They believed in our vision. They loved our capabilities, what we were doing and the uniqueness of the model that really differentiated itself from the bigger competitors.”

Now, with the backing it needs, the BlackHawk Industrial team is once again on the trail identifying and acquiring companies that fulfill its vision and mission. Where those opportunities do not exist, they will make them.

With a focus on the metalworking sector, BlackHawk Industrial is what Mark refers to as “a distributor of value,” bringing an unmatched product breadth and depth while also servicing the customer’s broader needs. Currently, BlackHawk Industrial offers 1.7 million SKUs (stock keeping units), three-quarters of which are consumed in metalworking processes. These include cutting tools, abrasives and coolants. The remaining business is composed of safety and maintenance, repair, operations (MRO) products as well as packaging and load containment products.

While variety is certainly important to a customer, BlackHawk Industrial takes value delivery to the next level with the additional services it offers. Services include sourcing, cutting tool reconditioning, custom tool fabrication, coolant management, pump manufacturing and reconditioning, and total inventory management.

As Mark explained, “Refurbishing cutting tools is a service where we take used tools, sharpen them, recoat and restore them, as close as possible, to the manufacturer’s original specification. We offer that service across the U.S., but are actively working to expand our capacity” to save more customers more money.

Be it pumps or custom tools, above all else, it is BlackHawk Industrial’s integrated supply chain solutions that bring value to its customers and get the right products in the right place at the right time to meet their needs. What customers are looking for is “their supplier to find the best performing products at the right prices as well as new technologies that can impact their bottom line,” explained Mark.

“We are customizing the supply chain on behalf of the customer to place product as close to the point of consumption with as much ease and control as possible. We rely on custom technology which connects the stocking parameters between our warehouses and on-site customer stores to make it highly reliable,” he said.

Be it an on-site tool crib or a vending machine stocked with carefully selected products, systems are in place to ensure that the company’s customers have streamlined access to consumables without needing to walk across a half-a-million square foot facility to do so.

For larger operations where vending machines make sense, a worker can enter the code for the part, scan their ID badge, the right quantity is dispensed from a machine near their cell, and the individual can return to production. This helps to improve efficiency, decrease labor time, improve productivity, lower costs, keep track of materials, reduce overuse and waste, and improve accountability.

“The constant pressure on our customers’ total cost of production translates into pressure on us as their supplier to find new ways to save money. Value-added services have become increasingly important for distributors as they can increase their cost savings capabilities beyond just product cost. In many cases, it is as simple as showcasing better performing tools and products. A sudden wave of rising product costs, via tariffs, have placed additional pressure on BlackHawk Industrial (as well as all distributors) to pass on cost increases to customers who are always looking to fix or reduce prices,” said Mark.

“While this makes it difficult to fund the additional value-added services, it’s not crippling us because we’re big enough to serve; we’ve got the means to be nimble and deal with those kinds of headwinds versus the smaller players,” said Mark. It is for these reasons that BlackHawk Industrial maintains its focus on value delivery and offers a consultative approach that can result in clear, documented savings.

“You have to constantly be out in front of that pressure and the evolving needs of that customer to drive cost savings,” Mark said. “So, our account managers and outside sales reps are consistently evaluating a customer’s production process, trying to find ways to find the right tool, find the right application of that tool, as well as other productivity gains throughout their processes.”

Customers have enough to worry about with labor shortages, tariffs, and increasing costs, so products and services shouldn’t be a concern. BlackHawk Industrial is not only aware of this but does everything in its power to ensure that value is delivered.

“Our manufacturers, especially of cutting tools, are also facing the same challenges,” Allen explained. “As a result, they are increasingly looking to the distributor – especially a distributor like BlackHawk Industrial that has that capability and is expanding that capability.” To this end, BlackHawk Industrial will look to double its size in five years or less, taking advantage of acquisitions as well as organic growth opportunities that leverage the company’s growing capacities and build upon them.

“A piece of that is also expanding into new geographies that we don’t exist in today. “We’re making a strong push into Mexico because of the growth trends and the size of that market,” said Mark. “If we find the right acquisition target that has the right culture, the right mindset, the same market model and isn’t small enough to care [we’ll look into acquiring them]; if we don’t find those types of partners, then we’ll greenfield or open up our own facility in a market and grow from there.”

As BlackHawk Industrial continues to scale up strategically to ensure it remains “big enough to serve, and small enough to care,” it will continue to add value through its supplier partnerships and supply chain solutions that are unparalleled in the market, and will be the metal cutting house of choice long into the future.

As Allen concluded, “Value is being able to make decisions about what products and what suppliers to provide to the customer at the right time. We’ve developed a team of product mangers that are leading those product categories that we have to determine the optimal supplier strategy so that we can openly bring the best level of service at the best cost to our customers.”

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