In search of the TOTAL safety solution

David Gilchrist, CEO, Jackson Products, St. Charles, Mo.

Welding helmets equipped with auto-darkening filters like Jackson's Nexgen represent Jackson's biggest product line.

Jackson has targeted markets less easily outsourced such as shipbuilding, construction and petroleum.

"We know that every day our customers wake up with a safety-related problem so we've structured our entire operation to provide them with the best possible solutions. This means listening to our distributors, continually developing new products, and keeping our costs under control."

GWD: What is the Jackson's overall vision as a company?
Gilchrist: Our vision to be seen by our customers as the ultimate source of safety solutions. We want to provide them with everything they need to make their welding environment safer in terms of the best quality products at the best available prices in the marketplace.

GWD: How did you arrive at that vision?
Gilchrist: We realized that every day our customers wake up with a safety-related problem, so we set out to structure our entire operation to provide them with the best possible solutions to those problems. That meant listening to our distributors, continually developing new products, and keeping our costs under control. Our new weld monitor helmet is a prime example of that process. The device helps educate welders in both a classroom and manufacturing setting as well as acts as a training tool to assist fab shops in bringing new hires up to speed as quickly as possible.

GWD: How would you characterize Jackson's relationship with its distributors?
Gilchrist: We go to the market in two ways — through a wholesale network and shipping direct to distributors. A lot of distributors prefer the wholesale network because it helps them lower their inventory costs, speeds up product delivery, and allows them to consolidate orders from multiple vendors.

GWD: How do you see the distributor's role is evolving?
Gilchrist: A number of distributors now see a threat from the big box (retail) stores. Today, some store are even moving into non-traditional product lines such as gases as more contractors are purchasing at these stores instead of a traditional distributor. Distributors have to respond by developing and promoting their chief value proposition — technical knowhow and service.

GWD: Can distributors gain a boost from the Internet?
Gilchrist: Yes, the Internet gives them the ability to expand sales outside their geographic service area. Of course that is easier to do with safety products than gas. To maintain their value proposition, they should structure their web sites not only to attract and inform customers, but also to guide them to have live discussions with their sales personnel where they will find the quality service and personal contact that distinguishes distributors from low cost providers.

GWD: What should distributors invest in to meet the demands of tomorrow?
Gilchrist: Distributors should invest in entering complimentary markets, such as Internet sales and training programs. Our sales reps, for example, spend 80 percent of their time training and educating end users; a focus we see as an integral part of providing the total solution for a given application.

GWD: What types of assistance does Jackson provide distributors?
Gilchrist: Our assistance starts with our sales force, whose main focus is to pull business through our dis-tributor network by means of timely product demonstrations and continuous safety training. We also assist them with marketing programs, hold open houses, provide school discounts, and offer guarantees so they know we stand behind the products we sell.

Another support program is our involvement with vocational schools. We educate instructors to familiarize them with safety concepts, our products and the local distributor. The program helps ensure that younger welders will become as familiar with our brands as the veterans.

GWD: What should distributors focus on to remain competitive?
Gilchrist: Any business has to stay ahead of the curve or it begins to lose ground. To stay ahead of the curve distributors must be ready to provide new products and services even before their customers are fully aware a need is developing. To accomplish that, distributors need keep their eyes open when they visit their customers and continually provide feedback to their suppliers. This process is a lot more effective than manufacturing engineers and CEOs dreaming up ideas in a vacuum. Jackson makes a concerted effort to maintain an open dialogue distributors about the needs they see developing in the marketplace and to join them on visits to end users.

GWD: Where do you see the best opportunities for growth in safety products?
Gilchrist: We in the safety industry have done a decent job of protecting the eyes and face, but I think the respiratory area may need some new products to ensure that workers are well protected in the future.

As a result, we see some growth potential in worker respiratory protection products.

GWD: How would you say Jackson differs from other manufacturers supplying distributors?
Gilchrist: We differ in that we understand the value that the wholesaler brings to the distributor, we lead in developing technologies that improve safety and efficiency, we have a higher level of sales support, and we have a brand name with a long history in the welding industry.

GWD: Has the welding safety marketplace changed recently?
Gilchrist: The welding safety marketplace has definitely become more fashion oriented. We've seen an abundance or graphics or customized safety products as of late. We've also noted some growth among hobbyists in the United States. Although by and large, the separation of the welding safety market into two parts — personal protection and automated safety is a notable change that is a result of OEMs increasingly moving from manual to automated welding processes. As a result, operations unsuited to automation are being moved to Eastern Europe, Latin America and Asia. Only a small portion of our business is involved with the automated segment since it mostly involves light curtains.

However, the overall diminishing need for personal safety products in this country is forcing us to become more creative and take a harder look at our costs and selling prices. We've targeted markets that cannot be so easily outsourced such as small fabrication shops, shipbuilding, construction and petroleum and are dedicating more resources to ensure we have the right products for their applications. In fact, the majority of our U.S. sales come currently come from those segments.

GWD: What do you see as the importance of branded products?
Gilchrist: We believe that branded products give the distributor a leg up in the marketplace. They provide customers with instant recognition and assurance of quality and value.

Lately, private labels have become a buzzword in the marketplace, but they do not offer the same level of recognition to consumers. It is also up to the owner of the private label to absorb the additional cost of marketing and inventory for their own lines. Finally, with a branded product the end user knows there is a company with a with a history of standing behind its product should a problem arise.

GWD: Which product lines account for the most sales?
Gilchrist: Welding helmets and auto-darkening filters are our biggestlines, but we also sell a fair amount of safety caps, faceshields, goggles, hearing protection and respiratory devices. Our aim is to provide a total safety solution for all safety needs in the workplace.

GWD: What kind of growth have you seen in domestic sales vs. sales overseas?
Gilchrist: We currently have a greater penetration in the U.S. market; although, Europe has been a target of ours for the last few years.

Currently our growth rate for both is about equal; however, over the next two years we expect to see that change with a higher growth in Europe, particularly in the eastern countries. We are also poised to enter the Asian market, as we see that the region holds future potential growth as well.

GWD: Where do you see the best opportunities for the firm's overall growth in next two years?
Gilchrist: Our focus for next few years will be on working with our distributors to identify opportunities for developing innovative products that meet emerging needs. For example, we are coming out with a lightweight welding helmet within the next three months along with some new auto-darkening filters. We are also developing products that make it easier for welders to transition from grinding to welding, and products that will address potential changes in respiratory compliance requirements.

GWD: Do you plan to seek acquisitions?
Gilchrist: We are in a good financial position and as such we are currently in an acquisition mode — particularly in the area of safety automation.

GWD: What are the chief issues facing Jackson and the industrytoday?
Gilchrist: Poorly made and improperly regulated imports are a major issue today. We've seen a fair amount of low cost products entering this country boasting ANSI certification and have discovered through testing that many do not actually meet ANSI standards. Distributors and end users need to be aware of this, but what we can do about it at the present is unclear.

Furthermore, in a related issue, a substantial number of imports violate our patent rights in a number of facets. We plan to vigorously defend them.

Additional issues include the continuing migration of jobs outside the United States and a persistent atmosphere of litigation that creates a lot of concern for everyone in the industry.

GWD: Which regions of the country consume the majority of safety products?
Gilchrist: We still see a large amount of business in the rust belt; however, it is a smaller percentage than even 10 years ago. We are starting to see some rebuilding begin in the Gulf Coast along with increases in general construction in the South and West.

GWD: What has been the impact of rising prices of raw materials on your business?
Gilchrist: As a manufacturer, rising costs have been a significant problem. Unfortunately, we have had to pass some of these costs along to our customers because we were unable to absorb them. As a result, it has forced us to look for lower labor cost areas for products under tough pricing pressures, and has required us to redesign some of our products using different materials.

GWD: Is there one single message you would like to convey to distributors?
Gilchrist: The message we'd like to send to them is that we are highly committed to this channel. We are continuously working to find solutions to distributors' problems and the safety needs of end users. We know that we have to earn their business every day.