Napa Auto Parts 2007 Annual Report Download - page 11

Motion Industries ended 2007 with 515 locations consisting of 470
branches, 10 distribution centers and 35 service centers throughout
the U.S. and Canada. rough this extensive operating network, our
customers have access to over three million quality parts, sourced from
a global manufacturing base. Our North American network enables
us to “Deliver the Difference” to our customers by providing MRO
products and services that distinguish Motion from the competition.
2007฀Performance
Motion Industries had another very good year in 2007, with sales
increasing 8% following three consecutive years of 11% revenue
growth. We have participated in the continued strength of the
industrial markets we serve through initiatives such as product
line expansion, targeted industry programs, branch expansion and
acquisitions. Our ongoing emphasis on these sales initiatives are
complemented by our efforts to enhance operations by increasing
productivity and reducing costs via our Operational Excellence in
Motion program. Success in these areas helped us achieve another
year of improved operating performance at Motion Industries.
Services฀and฀Solutions
Motion features expeditious product delivery and service from our
distribution facilities. We also provide customers with expert repair
and fabrication services as well as inventory management and logistics
solutions. In addition, our highly trained staff of over 1,400 sales
representatives and 200 field product specialists provides customers
with on-site technical assistance, parts and service solutions, and
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 into targeted industry markets. Examples include industry
segment product promotions and TargetingMRO market develop-
ment programs. ese programs are strategically developed and
executed as a joint initiative with Motion Industries’ suppliers and are
created to meet specific customers’ needs. We are encouraged by the
success of these programs and their potential to generate additional
revenue growth.
Product฀Line฀Expansion฀&฀Targeted฀Industries
We continue to expand our product offering to better position
Motion Industries for additional sales to 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
industrial automation products. is category encompasses a full
range of product solutions from electrical drives and controls, panels
and process components, to the full integration of plant equipment.
In addition, our industrial products offering has been significantly
expanded via several acquisitions and, today, forms our Industrial
Products Group. We are also pursuing sales opportunities in targeted
industries, which we believe will benefit from current manufacturing
trends, both globally and within North America. is strategy
has led us to industry sectors such as wastewater treatment, solid
waste recycling, wind power generation, ethanol production, rail
transportation and ports, among others.
Branch฀Expansion฀and฀Acquisitions
We continue to grow our geographical footprint in North America
via branch expansion and acquisitions. In 2007, we expanded our
distribution network with four new Motion Industries locations
and an additional eight locations through five acquisitions.
is expansion allows Motion Industries to capture and retain busi-
ness in the evolving markets across North America. Our growth
strategy for Motion Industries includes ongoing acquisitions as well
as continued branch expansion.
Specialized฀Service฀Offerings
Our specialized service offerings include Cost Management Processes
(CMP), Asset and Repair Tracking program (ART), Storeroom and
Replenishment Tracking (START) and our Motion Institute Train-
ing 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 cus-
tomized, on-line reporting capabilities. START adds value by providing
significant transactional efficiencies to plant storeroom management.
During 2007, the Motion Institute utilized live and webcast training
classes to successfully educate thousands of customers and employees
in current industrial technology and processes.
Operational฀Excellence
e Operational Excellence program at Motion Industries supports
our growth initiatives through more efficient and effective operations
across the company. Our focus on Operational Excellence serves to
reduce costs and enhance overall performance via increased produc-
tivity. e end results are improved profitability and greater capabilities
for “Delivering the Difference” to our customers.
Motion’s systems and e-business capabilities continue to improve
under this program. MiSupplierConnect, for example, provides
integration between Motion’s information technology network and
suppliers’ systems, creating numerous benefits for both the supplier
and Motion. Likewise, on our internet site, motionindustries.com,
customers have access to all the benefits of online lookup and
ordering capabilities, as well as 24-hour customer service. Internally,
Motion Industries’ intranet site, inMotion, improves employee
communications through online access to current announcements,
customer performance results, best practices, sales tools, and market-
ing programs.
2008฀Outlook
We expect Motion Industries to show solid progress again in 2008,
supported by the ongoing steady demand from our manufacturing
customer base, consistent execution of our growth strategy and
special attention to our valued customer relationships. We recognize
what it takes to remain a leader in the industry and provide a com-
petitive advantage for our customers by “Delivering the Difference”
as a leading supplier to the MRO industrial market.
9
industrial parts group net sales
in billion of dollars
2.25
฀03฀฀ 04฀ 05฀ 06฀ 07
2.51
2.80
3.11
3.35