Napa Auto Parts 2006 Annual Report Download - page 11

sales level marks the third consecutive year of 11% revenue growth,
so we have participated in the on-going strength of the vast indus-
trial markets we serve. In addition to increased customer demand
during this period, we have also experienced success with initia-
tives such as product line expansion, targeted industries, branch
expansion and acquisitions. ese initiatives match well with our
efforts to enhance operations and reduce costs via our Operational
Excellence in Motion program. Combined, they were the basis for
our improved operating performance in 2006 and will serve as a
catalyst for future growth at Motion Industries.
Services and Solutions
Motion features 24/7/365 product delivery and service from our
distribution facilities. We provide customers with expert repair
and fabrication services as well as inventory management and
logistics solutions. In addition, our highly trained staff of sales
representatives and field product specialists provide customers
with on-site technical assistance, parts and service solutions, as
well as inventory and cost savings consultations.
Joint Supplier Sales and Marketing Initiatives
We have strengthened our sales growth effort through joint supplier
sales and marketing initiatives to target and promote specific
product categories. Examples include industry segment product
promotions and TargetingMRO market development programs.
ese programs are strategically developed and executed as a joint
initiative with Motion suppliers and are created to meet specific
customers’ needs. We are encouraged by the success of these pro-
grams and their potential to generate additional revenue growth.
Product Line Expansion & Targeted Industries
We continue to expand Motion’s product offering to better serve
our current customers and gain coverage for potential new MRO
markets. Over the past few years, we have invested more heavily
in product categories such as hydraulics and pneumatics, indus-
trial automation products, material handling lines and industrial
supplies. In addition, with our added product coverage, we are
pursuing sales opportunities in targeted industries including
waste water treatment, power generation, ethanol production,
rail transportation and ports, among others.
Branch Expansion and Acquisitions
We also continue to grow our geographical footprint in North
America. In 2006, we expanded our distribution network by
opening 10 new Motion locations. is has enabled us to capture
and retain business in the evolving markets across the continent.
In addition, we grew our market presence in 2006 by another 31
locations via two acquisitions. In July 2006, we acquired Lewis
Supply Company and, in September 2006, we acquired Ruston
Industrial. Both of these companies serve to expand our offering
of industrial supplies and our future growth strategy includes
additional acquisitions of this type.
Specialized Service Offerings
Our specialized service offerings include Cost Management
Processes (CMP), Asset and Repair Tracking program (ART),
Storeroom and Replenishment Tracking (START) and Motion
Institute Training Center. CMP delivers plant solutions through
cost savings and productivity programs. ART is designed to track
customers’ warranty and repair information and adds value by
allowing our customers to streamline their entire repair process and
track the status with customized, on-line reporting capabilities.
START adds value by providing significant transactional efficiencies
to plant storeroom management. During 2006, the Motion Institute
successfully trained thousands of customers and employees in
current industrial technology.
Operational Excellence
e Operational Excellence program at Motion Industries supports
our growth initiatives through more efficient and effective operations
across the Company. is on-going initiative serves to improve
efficiencies, reduce costs and enhance overall performance via
increased productivity. e end results are improved profitability
and increased capabilities for “Delivering the Difference” to
our customers.
For example, Motion’s internal systems and e-business capabilities
have improved under this program. 2006 represented our first full
year of operations with a newly installed warehouse management
system and as a result we are achieving increased efficiency, accuracy
and productivity in our warehouse operations. In addition,
oure-business capabilities such as MotionIndustries.com and
MiSupplierConnect continue to improve and, today, offer more
sophisticated customer and supplier applications.
2007 Outlook
We are very pleased with the improved operating performance
at Motion Industries and we expect 2007 to be another good
year for our industrial business. e favorable economic condi-
tions that have benefited our manufacturing customer base over
the last few years remain healthy. Our strategic initiatives and
special attention to our valued supplier and customer relationships
will also drive continued sales and earnings growth and operational
excellence. At Motion Industries, we aim to “Deliver the Difference”
as a globally competitive supplier to the MRO industrial market.
11%increaSeinrevenueS
proDuctlineexpanSion
targeteDinDuStrieS
BranchexpanSion
acquiSitionS
operationalexcellence
SpecializeDServiceofferingS
&e-BuSineSScapaBilitieS
2006 Highlights
9