DXP Metal Working Products Division

DXP Enterprises Inc.’s Metal Working Products Division, formerly C.W. Rod Tool Co., not only makes sure it has a strong supply of products, but also technical expertise to help its customers. “That’s how we keep the competition back,” President Chuck Rod declares.

Based in Houston, the division provides industrial cutting tools and supplies including fasteners, power tools, lubricants and fluids. Rod notes that its roots go back to 1978, when his parents, Charles W. Rod Jr., Lorraine Rod and his brothers, Ron and Randy Rod, started C.W. Rod Tool Co.

“We [began with] very little working capital to start the business,” Chuck Rod says, noting that it grew significantly before DXP acquired it in 2011. The two have fit well together, he says.

“DXP’s acquisition model is to acquire winners, not losers,” Rod explains. “They basically let us do our thing and helped us along to where we needed to be.”

Today, as one part of the Metal Working Products Division, it has seven locations across Texas and Louisiana and its most popular products include cutting tools, abrasives, work holding, coolants and oils. “[We sell] just basically everything that goes into a metal-working shop,” he states.

Competitive Advantages

DXP’s Metal Working Products division serves a customer base that includes both small and large job shops that support the upstream oil and gas industry, as well as production shops. Ninety-five percent of the division’s business, Rod notes, is from repeat customers.

The company has earned this loyalty through its service model, large inventory, same-day free deliveries, vendor-managed inventory programs, and inside and outside sales forces with strong expertise. The division makes sure to keep its associates up-to-date, Rod asserts.

Each week, it holds vendor-training sessions for its outside salesforce on the latest advancements, as well as monthly training sessions for the inside force. “Our customers expect a high level of expertise from our team, keeping them informed of the latest technology available,” he says.

The division’s parent company also gives it a competitive edge. Thanks to DXP, “We are able to offer our customers a wide range of MROP [maintenance, repair, operating and production] products, including bearings and power transmissions, rotating equipment, general industrial supplies, and safety products and services,” he explains. 

Inventory Excellence

DXP recognizes that its customers want to receive products in the shortest amount of time and at the lowest cost, Rod says. “To stay competitive, DXP, with its 180-plus locations nationwide and in Canada, has been able to stock the correct product at the appropriate branch for the fastest and cheapest delivery to their customers,” he states.

DXP’s several distribution centers feature an inventory of commonly used items that can serve large territories. “As more products are procured online, DXP will continue to look at more distribution centers to offer the fastest and most cost-effective deliveries to our customers,” he says.

Additionally, the company has found a way to excel when it comes to controlling dead or excess inventories. 

“DXP has developed a series of tools that they use to monitor, control and forecast inventory, which ensures we will have the product when the customer needs it,” Rod says. “Our VMI programs are also a great way to manage the customer’s inventory with the assurance that he will rarely stock out.” 

Top Tech

DXP uses electronic data interchange transactions for its purchases, confirmations, invoicing and other transfer functions. “We have direct access to some of our major vendors to view stock and purchase on-line,” he says.

But the technology with the most influence on distribution channels is online purchasing, Rod says. “I believe that you will not be able to compete with the larger online distributors unless you have a comparable web store for your customer’s procurement,” he says. “Every year that goes by, it becomes a more important issue.”

Currently, the division has an e-commerce platform that is used by a limited group of customers who need custom products. After it gathers more data, “We’ll open it up to all customers,” he says.

Expansion Ahead

Rod joined his family’s business in 1978. Over those many years, he has worked in all aspects of the operation’s business, including shipping and receiving, inside and outside sales, branch management and ERP implementation. Additionally, he has gained extensive experience.

He is proud of the division’s low turnover. “We have a number of people that have been with us over 20 years,” he says, noting that they maintain a high level of integrity.

DXP plans to continue acquiring more metalworking companies, Rod says. “We’re also doing a lot of cross-selling with a lot of the other product groups DXP has to offer,” he says. These include industrial supplies, safety products and services. “We have a lot of opportunity to go forward, expanding in those areas.”

When acquiring companies, “We do not want fixer-uppers,” he says. “We’re looking to support successful people and help them grow their business.”

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