(From the Nov. 28, 2011, issue of Rubber & Plastics News)
DENVER—North America generally isn't seen as a high-growth market in most circles, but that doesn't mean that Gates Corp.'s leaders feel there aren't opportunities to make gains.
“For us in North America, our challenge is how to grow more than a (Gross Domestic Product)-type aspect,” said Tribby Warfield, Gates' president, North America, commercial. “A lot of manufacturing has moved out. Some that left during the recession will never come back. But if we can continue to have North America be a low-cost region of manufacture, that is a good thing.”
Warfield brings a diverse background to her role in Gates' new organization as the leader of the unit charged with selling all the firm's hose, belting and other goods and services in North America.
The 23-year company veteran spent 12 of those years in Europe, with three different assignments in three different divisions in three different countries.
“Having been on our fluid power side, having been on our automotive (original equipment) side and on our power transmission side, it's great to see the differences in how we go to market with the fluid power and PT businesses,” she said. In simple terms, that has meant a specialized push strategy for the hose unit and a consumer-driven pull demand for the PT belting side.
When Warfield joined Gates, the firm was organized as one cohesive unit covering all product lines before being restructured as a product-driven company in 2003. She believes the timing is perfect for a return to the “one face of Gates” approach, given the firm's mission to advance the science of motion technology.
“I believe it's going to allow us the opportunity to build a stronger platform when we work with our original equipment manufacturers to have everything from one face—from one commercial management face down through the selling organization into the technical organization,” she said.
Differences with Europe
What Warfield faces in her North American leadership role is a market that is much different from Europe, she said. Europe still has emerging markets, particularly in such areas as Eastern Europe and Russia.
Markets in Europe, however, are much more fragmented, according to Warfield. Distribution partnerships are very regional. While the top 10 distributors in North America account for roughly 35 percent of the maintenance, repair and operations business in the region, in Europe the top 10 probably cover less than 6 percent of MRO spending.
“I like to say there is a European Union but there is no union of Europe,” she said.
Gates likes to point to the relationships it has with its distributors in North America—as well as elsewhere in the world—as one of its core values, Warfield said. “We pride ourselves on always trying to be the strategic partner of choice for our distribution. We know they have choices. We feel if we have strong relationships, transparency and open communication, that the brand of Gates will always succeed in the market because of what we can deliver.”
The company also works closely with its original equipment customers in the firm's five key end markets, with an emphasis on placing new products and solutions into each sector.
“We have to be driving new technology at the original equipment level in order to create that pull-through demand down the road for the distributors to have in the MRO marketplace,” she said.
Gates uses its Customer Solution Centers for fluid power products in Denver and a similar center for power transmission components in Rochester Hills, Mich., as tools to push OE business. She said the firm brings in current and potential OE customers to the centers to show how they can benefit from having Gates products on their equipment and machinery.
Opportunities are there
In aiming for growth above GDP levels in North America, Gates will look at such things as “disruptive technologies” and complementary products to meet those goals, Warfield said.
One such new technology is a belt drive system for bicycles that Gates developed as a way to displace the standard chain system. “Now more than 125 manufacturers are launching belt-driven bicycles,” she said. “Across the world we are changing the paradigm that a bicycle is driven with a chain.”
It also must see where there is headroom for growth above market rates. Warfield said that means having a clear understanding of the firm's five key markets and seeing where it can offer products adjacent to Gates' offerings when possible.
Gates also will build on its strengths, the executive said. For belting, that includes having the widest array of products and solutions, and in fluid power being an extensive “port to port” supplier.
“We know it's there,” she said of the growth opportunities. “We also know that growth is going to come from being better than our competitors and offering more than our competitors do.”
And while much manufacturing has left North America in recent years, the Denver-based firm retains an extensive manufacturing footprint on the continent.
That follows Gates' strategy of having local factories source products for its region when viable.
“So our plants here are making content for North America,” she said, “and we have to make sure our plants remain competitive with our other plants around the world.”
Warfield said as Gates celebrates its anniversary it's vital for the firm to remember that much of its past success and growth was dependent on listening to the marketplace. “I think the key for us in the next hundred years—and in the next few years—is to continue to let the customer tell us where we're meeting the mark and not meeting it,” she said.