ANNAPOLIS, Md.—The rubber industry has several associations where manufacturers and distributors co-exist in the same organization.
Typically, distributors run the group, but with input from manufacturers who supply them the products they sell to the end users.
Probably the largest of those groups that touch the rubber sector is Annapolis-based NAHAD: The Association for Hose and Accessories Distribution. The organization was formed in 1984, and has had both manufacturers and distributors involved from the beginning.
“It's clearly important for NAHAD to be an organization where both sides can come together to foster good relationships and be able to address concerns on marketplace issues,” said Joseph Thomp¼son, NAHAD executive vice president.
There are two major reasons companies join the association, he said. First, it's a guaranteed way to get up close and personal with trading partners. And second, NAHAD is focused exclusively on the hose industry, rather than being part of a larger industry group that lacks such a clear focal point.
“Manufacturers seek to find new distribution channels and distributors look for new lines,” Thompson said.
He doesn't see any drawbacks to having manufacturers and distributors belonging to the same group, particularly because it's been made clear that serving distributors always has been the association's top mandate.
“The driving force is to meet the needs of distributors,” Thompson said. “Manufacturers have known that from the beginning. They know the stronger the distributor, the better it is for them. Both parties get a lot out of this organization.”
The main event on NAHAD's calendar is the annual convention, always held in the spring. That's the primary face-to-face opportunity where the trading partners can get down to business.
But that's far from the only mission of the hose-centered organization. Education and training support are a crucial part of NAHAD's activities, Thompson said.
The association helped form the University of Industrial Distribution in 1994, an initiative that now encompasses about 40 distribution trade organizations. NAHAD also offers webinars on various topics and helped facilitate a multiyear project to develop Hose Assembly Guidelines that spell out best practices for hose design and assembly.
The Hose Assembly Guidelines focused on the five areas of hose products that fall under the NAHAD umbrella. Engineers and technical personnel from manufacturing members were invited to work on the project because they were seen as the ones with the needed expertise, and all companies sent volunteers to assist.
“Each group was supervised by a distributor,” Thompson said. “But to have consensus, the (guidelines) had to come from manufacturers' technical people.”
The daily functions of NAHAD are run by Thompson's association management company. He has been involved as executive vice president of NAHAD since 1990 and formed his management firm in 1993.
His group manages a number of other associations as well, including several others involved in industrial distribution, and also oversees the University of Industrial Distribution.
Thompson said the setup is similar to other associations in that members and elected leadership control the organization. But instead of the board hiring a CEO and staff, it contracts with his firm to handle management.
“The board of directors sets the direction and policies, and the staff sets day-to-day operations and carries out those policies,” he said.
The option is an economical one for the association, Thompson said, because the group gets a full-time staff for much less cost than if it hired its own employees and rented offices. His staff of 13 associates is there to serve the needs of NAHAD and the other organizations he contracts with.
As an association, NAHAD has to go through the same process as companies to remain relevant in today's business environment. In short, Thompson said the group has to define its value proposition to the marketplace.
“Changes associations have to make reflect what's going on in the market,” he said.
For the past couple of years, companies have been looking to conserve cash. That has meant cutting travel to events such as conventions or holding off on paying organization dues.
“Associations have had to go with the flow,” Thompson said. “They always have to figure out what to deliver to help in the marketplace, so when members pay dues or travel, they see the value.”
It's an ongoing process, he added. “We're always trying to figure out where we can put our energy and resources.”
To that end, NAHAD's board will finalize its formal three-year strategic plan by the end of September, factoring in results of member surveys. “It says this is where we are and where we're going,” Thompson said.
While the formal strategic plan is put forth every three years, the association on an annual basis develops action plans for each committee.
Recruiting and retaining members has been difficult the past couple years, as it has been for many organizations. Thompson said a combination of consolidation in the industry coupled with the economic downturn has resulted in a reduction in membership.
He said the group has had a good history of maintaining membership levels. Some organizations drop out when discovering NAHAD isn't that relevant to its business, while others go out of business.
Filling the void
In the past, there have been new members to fill the void, but there have been fewer new companies to recruit this time around. Thompson said NAHAD has always maintained reasonable dues and participatory fees to encourage membership and attendance.
Traditionally, the association has maintained roughly 300 or so distributor company members, but currently is below that level, according to the NAHAD executive vice president. It also has about 160 manufacturer/supplier company members and another 20-25 associate members.
Despite the drop, NAHAD still boasts somewhere between 450 and 500 total member companies, meaning it has contact with from 2,000 to 3,000 individuals from those firms on a regular basis, Thompson said.
The association has had good luck in recruiting volunteers. For example, the Hose Assembly Guidelines project required 250 different individuals to volunteer in one way or another.
Thompson also noted that in the years he has been involved with NAHAD, there probably have been a half-dozen board members who are second generation of those he worked with 20 years ago.
“It's nice to see family owned organizations active in the organization,” he said. “Obviously they get a lot out of it or they wouldn't volunteer.”