CHICAGO PNEUMATIC, OVER 110 YEARS OF TRADITION easy_international June 10, 2015 INTERVIEW, TOOLS, TOP NEWS Founded over 110 years ago, Chicago Pneumatic has a strong history of constantly looking for new ways to meet customers’ needs, today and tomorrow. In 1889 John W. Duntley realized that construction workers in particular had a need for many tools that weren’t yet available. He founded the Chicago Pneumatic Tool Company in 1901 and set out on a lifelong mission to provide all types of industries and companies the tools necessary for their success. Over the years Duntley grew the company through product innovation, always insisting on product quality and reliability. The name Chicago Pneumatic became known and appreciated by workers around the world for durable, reliable tools that made tough jobs easier and were designed to meet specific needs. Today, Chicago Pneumatic is a global brand that offers products for almost every industry and countless applications. Chicago Pneumatic’s products still stand for reliability, durability and customer value. Easy Engineering team talked about Chicago Pneumatic company with Luis Clement, Vice President of Chicago Pneumatic Tools. Easy Engineering: Who founded Chicago Pneumatic? Luis Clement: John W Duntley, a foundry foreman from Milwaukee, Wisconsin founded the Chicago Pneumatic Tool Company in 1901. John W. Duntley had in mind the idea of sourcing and selling construction and industrial tools “that weren’t yet available.” E.E: What are the main business activities? L.C: Chicago Pneumatic serves three main application segments: manufacturing, maintenance, and construction and demolition. To meet customers specific needs, we offer a complete portfolio of robust products with guaranteed quality. What once started with a single-valve hammer for the construction market has expanded into a comprehensive range of power tools, compressors and construction equipment specially designed for the vehicle service markets, the general and heavy duty industries as well as the the construction and demolition market. Our specific business line, Chicago Pneumatic Tools, is focused on delivering air tools, workshop equipment, hydraulic tools, accessories and spares to a multitude of different customer segments. Our tools are used everywhere, for maintenance applications or production, from car repair shops worldwide to the most demanding industrial production facilities. E.E: How has the Chicago Pneumatic Tools organization grown over time? L.C: Chicago Pneumatic Tools has grown organically by expanding the product offering to its customers, by developing new market segment focus as well as by growing continuously its market coverage in terms of distribution channels. E.E: What problems have you encountered over the years and how have you managed them? L.C: Every company faces different challenges and opportunities in various business cycles. As the company has expanded globally over the years, it has allowed us to overcome local market downturns by growing our market shares in new geographical markets that were in a better economic situation. We have also diversified our product portfolio and segments that we focus on and limited the exposure to the more traditional markets we were in. E.E: What are the ranges of products manufactured? L.C: Chicago Pneumatic Tools offers hundreds of quality air tools designed for the specific needs of our customers: impact wrenches, ratchet wrenches, drills, grinders, sanders and polishers, as well as cutting tools and specialty tools. In 2013 we launched a new range of workshop equipment to cover all garage and tire shop equipment needs. And last year we developed and released a new range of cordless tools to better meet the demand of our customer base for vehicle service applications as well as for light industrial maintenance applications. We also offer a wide range of accessories and spare parts, which is important to fully support our end-users needs. We have a complete range that can be seen at www.cp.com or by downloading our Chicago Pneumatic ToolBox app for free. E.E: How big is your distribution network and who are the main distributors? L.C: We have a vast distribution channel and are well represented globally. Chicago Pneumatic Tools is present in 150 countries and we have close to 10,000 distributors across many different customer segments. We work with various profiles of distributors, such as catalog companies with large networks of retail shops and e-commerce services, industrial warehouses, independent industrial generalists or specialist distributors. Main distributors depend on the geographical region as until today there are not many global organizations. One of our major distributors is Grainger, which is our largest partner in the USA and has already started to operate globally. E.E: Tell us about the shipping of spare parts. L.C: All our products, including spares, are available through three regional distribution centers, one in Americas, one in Europe and one in Asia (just recently opened in China). These regional hubs enable Chicago Pneumatic Tools to shorten delivery lead-times to its distributors which is a key differentiator on the market today. Our distributors expect more than just product, they are looking for additional services, proximity, and reactivity. Regarding spare parts management, we offer specific online services to our partners, such as easy access to a spare parts list, connected to an e-commerce platform dedicated to distribution. As the productivity of the end-user is linked to the performance of their tool, to keep it functioning at optimal performance and to ensure longer life of the tool, it’s important to help our distributors promote maintenance kits and repair service to their customers. Our spare parts strategy is also focusing on offering more spare part kits for preventative maintenance. E.E: In what stage is the market today? L.C: The industrial power tools market, pneumatic or cordless technology, continues to grow steadily and we are growing faster than the market. E.E: Has the customer profile changed lately? L.C: If by customer you mean our distributors then yes. Our distributors are increasingly becoming bigger and fewer, which is in line with the global trend of smaller distributors being acquired by larger ones. Our end-user profile is also changing; organizations and individuals are increasingly concerned with safety and ergonomics. Users are still looking for high performance tools that will do the job right no matter what, but they are ever more conscious about the benefits of ergonomic features, such as low sound and vibration levels, as it has a direct impact on their health and comfort of use. This is front of mind for Chicago Pneumatic Tools, in fact we are delighted to have won two awards this year from Professional Tools & Equipment (PTEN) magazine for our CP7732 stubby impact wrench. The extremely compact, yet powerful tool has won the ‘people choice’ and ‘innovation’ awards, proving its high quality, durability and ease of use. The ‘people’s choice’ award is chosen by the magazine’s readers and winning this accolade demonstrates that the wrench really is a firm favorite with vehicle service professionals. Whereas the ‘innovation’ award recognizes the most innovative products introduced to the automotive aftermarket in the last year. These tools are evaluated on their ability to make vehicle diagnosis and repair easier and more efficient, and make shops more productive, and our stubby came top in the air tool category! E.E: What are your updates (new products, events etc.)? L.C: In November 2014 we introduced a new cordless tool range and it’s penetrating all our markets with fantastic success. In addition, our customer centers worldwide are very active and running specific promotions on new air tools. They will present the latest additions of the range at various tradeshows; in Europe for instance we were present at more than 12 events between March and June. E.E: What are the future plans for Chicago Pneumatic Tools? L.C: At the start of this year we acquired Titan bolting solutions – to bring us into the hydraulic tools business. The Titan integration is the priority for the moment in terms of growth as it also opens the door to many new opportunities in the industrial sectors. We are currently welcoming more than 50 new distributors into the Chicago Pneumatic family. E.E: What are your objectives for 2015? L.C: To continue to provide the best quality tools in the market for our distributors and to make it as easy as possible for them to buy from us and for them to sell our products. We are also focusing on setting up new marketing programs for our brand to get closer to our end-users. E.E: Where is Romania situated in the global ranking? L.C: Romania is still a small market for us compared to some major global markets but one where our brand is very well perceived. We have a very good team in the region to support our customers and very good distributors selling our brand. We have seen double digit growth in the region for the past three years and have the chance to keep growing. We believe the European industry is increasingly moving towards the Eastern regions and Romania is a key growth market. E.E: Some details and plans about the Romanian and European market. L.C: We will continue to focus and develop our territory coverage in these regions and believe that although the brand has a good market position there is always room for continuous improvement.