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Press Release - Valves & Fittings: Of Big Change, Little Change - And Changes To Come

May 04, 2012

FREMONT, Ohio, USA — January 16, 2012 — Pneumatic valves and fittings are ubiquitous. It’s probably safe to say that many industries couldn’t function without them. It’s also safe to say that valves and fittings have changed very little in the last 50 years. They’re essentially made with the same materials and perform the same functions, mostly within the same performance range. They’re not what you’d call “highly complex.”

So, why is it difficult for so many companies to get custom designs? For relatively basic products, you might think developing a custom valve or fitting would be like falling off a log. But try to get a custom valve or fitting produced if you can’t order mass quantities every year.

That’s the challenge facing today’s industrial and commercial equipment designers, innovators and manufacturers. One of the few companies with a history of success in custom valve and fitting designs can be found in Fremont, Ohio.

With more than 50 years in the business, Alkon Corporation – and many of its long-term employees – have seen, designed and shipped it all. Alkon makes more than 10,000 different types of fittings and valves, some custom (called “specials”) and some off-the-shelf products, at its headquarters in Fremont, Ohio, and ships them to six continents.

Alkon’s products are spec components for a stunning array of products: advanced military aerospace and ground vehicles, car washes, farm machinery, heavy equipment, and animated characters in theme parks. And there are many, many more applications; so many, in fact, that it’s not uncommon for suppliers to be unaware of them all.

“Distributors are our customers,” says Alkon Sales Manager Daniel Starkweather. “And distributors – especially in fittings – are very protective of their customers.” That extends in many cases to sharing very little information about end user applications.

As long-term industry insiders, executives at Alkon believe there are several reasons for that defensiveness. One is that the market for valves and fittings in the U.S. has been shrinking for 40 years. Changes in U.S. manufacturing in general, compounded by specific shifts in the pneumatics industry and the trend toward consolidation, have resulted in what they propose as two major paradigm shifts.

Paradigm shift no. 1

The first: most manufacturers (read the industry juggernauts) have no interest in developing custom products unless they guarantee long-term, predictable high-volume sales.

“We get that; we love those customers, too,” Mark Radloff, vice president of engineered sales, comments. “But that basically eliminates the innovators, the new and improved models, and all those distributors out there with underserved small to medium-sized end users. They can’t find a supplier because they’re not big enough to warrant a conglomerate’s attention. So they’re left out in the cold or locked into retooling so they can use an off-the-shelf product made for someone else? That’s just wrong.”

It was precisely that situation that led Alkon to develop the Trans-DOT product line for the truck and trailer industry. Maintenance and repair workers were always trying to make industrial valves fit their needs – needs they were not designed to meet. Trans-DOT valves are made to meet U.S. Department of Transportation guidelines and fit each application, which helps extend service life.

That type of solution appears to be more often the rule than the exception. Alkon’s people in the field have reported they often come away from a sales call with the impression that distributors don’t want to deal with big conglomerates.

“Typically conglomerates don’t focus on relationships,” Starkweather says. “As we see it, our job is to maintain that relationship, keep our distributors happy, find out what they want and need and make sure they get it.”

Paradigm shift no. 2

The second paradigm shift: domestic and foreign suppliers – juggernauts and smaller companies alike – now compete for pieces of a much smaller pie. To understand how this theory developed, it helps to know your history.

For many years, compressed air was the No. 1 method for automation. But costs and financial trends have made drastic changes in the industry.

Beginning in the 1970s, many of the biggest valve users moved their manufacturing operations offshore. One example, explains Mike Caron, Alkon’s senior vice president of sales and marketing, is the South’s now-defunct textile industry.

Because they cycled faster in automated sewing machines than other pneumatic valves, Alkon valves were often preferred by textile manufacturers. Faster cycling meant more pieces completed per hour, per shift. But textile manufacturers moved offshore, taking with them thousands of jobs and valve orders.

Another shift in the industry (and with nearly every other industry) is consolidation. Until the ‘90s, most distributors Alkon called on were family businesses, mom-n-pop shops. Their relationships with customers were personal and very strong. Today, most have been bought by conglomerates, and the once-close relationships are no more.

Then, in 2000, the electrical industry began making inroads in pneumatic power territory. That eliminated even more opportunities for compressed air controls. Since then the market for pneumatic equipment has essentially been flat, leaving the pie no larger than it was about 40 years ago.

In spite of the difficulties inherent in today’s valves and fittings industry, Alkon has managed to grow year after year. They’ve definitely had lean years and careful planning has been critical. Having hands-on principals with expertise in equipment design involved in day-to-day operations gives Alkon another advantage in tough times.

Relationships transcend troubled times

But over and over like a mantra Alkon’s leaders cite one priority as most responsible for Alkon’s success from one year to the next: relationships.

“Sure, it’s the products, it’s the offering, but mostly it’s relationships,” Starkweather states. “For example, most of our distributor network sprang from word-of-mouth. We’ve rarely had to look for new distributors; they found us. One guy we knew was starting his own business. He said, ‘I’d love to sell your fittings.’ This was a guy from Minnesota we’d known for 25 years who was now opening his own distributor network. Now he carries our line.”

These days, relationships often dictate whether you can find the valve or fitting you need.

Alkon continues to make lapped-spool valves and other products most other suppliers don’t even make anymore. These parts are critical to their customers’ operations and distributors count on them to supply these parts. Alkon also designed and built new equipment in-house specifically to make lapped-spool valves. It’s a commitment they’ve made to their distributors.

That kind of relationship building pays off in tough times. It’s rarely easy to change distributors, no matter what industry you’re in; Alkon’s salespeople say that in this business it’s especially difficult. But once distributors decide it’s time to make a change, they know where they’re headed. Your relationship work has built a bridge straight to your door.

On the other hand, if your delivery goes awry or you send the wrong product (it happens to the best of us), all the times you went above and beyond can keep them from crossing over to another supplier. And if you can offer robust custom designs for their end users, it can move you to the front of the Rolodex.

Specializing in specials

When distributors don’t have what the end users need, they contact a supplier for a “special,” a custom design to fit that need. That’s where a company like Alkon comes in. Alkon’s growth by a factor of 10, they say, is directly related to their work developing special products.

They love specials. That interest puts Alkon in a whole new class of suppliers. Most valve and fitting conglomerates don’t even quote specials.

When you’re massive, there’s so much bureaucracy involved. Alkon’s not so big that it takes forever to shift focus or add a new design. Being smaller means it’s easier to react and respond. So, Alkon is always willing to look at specials.

When a distributor asks for a custom product, Alkon takes the design through a process to make sure it’s viable and can be produced at an acceptable price. Sales engineers usually respond with a quotation, a timeline and pricing within one to two weeks. Alkon’s “hit rate” – getting the work – is about 40 percent.

“Our vital relationships are with the distributor salespeople,” Starkweather comments. “The distributor comes to us with the need for a custom product for an end user, and we make it for the distributor. So, when it reaches the end user, the distributor is the hero, not us. And that’s great.”

Trust earns rewards

“In fact, some distributors invite us in as their consultants,” Radloff interjects, “to check customers’ equipment for opportunities to improve productivity, minimize parts and save money. We become a value-added service to their customers. In terms of relationship building with customers, our distributors get a lot of mileage out of that.”

That kind of trust cannot develop without the assurance of confidentiality and exclusivity – big issues for distributors and suppliers.

All three agree that it’s not uncommon for a distributor to be lured away by another supplier and return to Alkon once burned.

“It goes back to the relationship,” the sales manager says. “Distributors need to know they can trust you. When Alkon says you have exclusivity and confidentiality, you can take that to the bank.”

They also insist the reverse is true: suppliers need to know they can trust their distributors. They relate incidents in which a distributor came to Alkon for a custom design and Alkon decided to take it on, committing people and a lot of valuable time and effort developing that design just for them. It took months (sometimes a special can take years) to prove out the design, make sure they could produce it, and cost it out to determine a fair price. After all that work, the distributor took the prototype to another company and challenged them to make it cheaper.

In valves and fittings, distributor private-labeled products have increased dramatically since the 1990s. It’s just good business; distributors want to lock in exclusivity so their customer base is predictable. It also keeps price wars to a minimum.

“That’s fine with us,” Starkweather says. “We don’t care whose name goes on the packaging. We’ll even anodize the product with their signature color.” As long as the product makes the end user and distributor happy, the product stays sold, he maintains. And if any other end users can benefit from using that product, so much the better.

“We enjoy problem solving. We like finding solutions and improving processes.”

New applications on the horizon

After more than 50 years, valves and fittings are essentially unchanged because they just work. The basic seal is the same except for the more exotic rubber compounds that allow use in extreme temperatures and other more demanding applications.

The exciting changes that raise eyebrows come with new applications, the Alkon upper echelon members say. They mention previous generations of suspension systems, consisting solely of shock absorbers and springs. In the 1980s, one recalls, the Lincoln Continental introduced air-ride suspension that relied on compressed air valves and fittings. Soon it was offered on large trucks (to an eternally grateful class of OTR drivers). Now, they say, innovators are pushing the boundaries again, into other areas like motorcycles and other new uses.

“There have been some real innovative applications,” Radloff says. “Onboard weigh systems is one example,” he continues. “The system detects the vehicle’s weight and transmits it wirelessly to the weight station, so the truck keeps moving and makes better time. And there are leveling systems for motor homes where an air valve controls the air-ride system and suspension on the fly. So without stopping, the vehicle automatically maintains better traction and stability no matter what kind of road you’re traveling.”

Alkon’s executives believe exciting things are happening in the industry. They “know” the next innovative use of fittings is out there, just waiting to be produced. When it will surface is anyone’s guess. But when the need does arise, distributors should know that they can count on at least one supplier to leave the light on for them.

About Alkon Corporation

Alkon Corporation is a global supplier of a full range of pneumatic valves, fittings, flow controls and accessories. With more than 50 years of hands-on expertise in industrial and commercial applications Alkon produces over 10,000 different product types including the largest inventory of push-to-connect fittings in the world. Alkon’s quality measures include pre-applied thread seal on all products shipped and manufacturing operations certified to the latest ISO quality standards.

A privately held corporation headquartered in northwest Ohio, Alkon holds 20 patents and welcomes the opportunity to develop custom products.

For information on Alkon products and services, contact us today.