Engineered Supply Chains – Hiten Shah of MES

Hiten Shah, President of MES

Hiten Shah, the President of MES, grew his company’s revenue from $39.6 million in 2014 to $64.9 million in 2017, a 64% increase, and to around $62 million in 2018.  

MES provides global manufacturing and supply chain management services.  

In this interview with Eversprint‘s Malcolm Lui, Hiten shares how he and his team accelerated their high value sales by:  

  • Maintaining a close physical proximity to their customers manufacturing facilities.  
  • Proactively developing a network of quality suppliers around the world.  
  • Providing analytical tools to better inventory forecasting and management.  
  • Developing and applying in-house a metric based management system.   

Computer generated transcript - MES Interview (transcribed by Sonix)

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Malcolm Lui: I'm Malcolm Lui, the managing member of Eversprint, and today we're speaking with Hiten Shah, the President of MES, a full-service provider of global manufacturing and supply chain management services. Welcome to the call Hiten.

Hiten Shaw: Thanks a lot Malcolm. Thanks for having me.

Malcolm Lui: Hiten, you grew your company's revenue from $39.6 million in 2014 to $64.9 million in 2017, a 64% increase, and in 2018 you hit around $62 million. Before we talk about you grew your company so fast, can you briefly share what your company does beyond my quick intro, and how your company differs from the competition?

Hiten Shaw: Yeah. We help companies with their supply chain management and global sourcing solutions. We work in main word extending to lighting industrial automotive and agriculture sales agriculture industries. We basically do the whole supply chain value where we find suppliers. We do quality management quality audits for suppliers. We consolidate shipments across different ports globally. We then house the components to be within one to three days support of customers. And we also see some value added operations very close to the customers in our houses. So what the thing that separates us is the right time for offering the most support competition tends to be suppliers that are willing to do consignment inventory from abroad. Our domestic suppliers some other range of competitors such brokerage services they are not offering inventory management solution. Some of the suppliers do not have quality development type of resources near the customers do you have back to the suppliers. So in our case we have quality resources and supply chain resources in every country that the customer so they speak the local language what can their time zones. And then it's their job to work with all the off shore sourcing offices in Hong Kong Mexico Vietnam and China to do all the supplier side work. So that's the whole breadth of offering is what separates us instead of many competitors

Malcolm Lui: Right and your competitors compete. Like Are there competitors who compete in the same verticals as you or do you find that your competition also is not a specialized hence the services that they can offer are also not a specialized

Hiten Shaw: So we we because we are somewhat focused across certain commodities and certain industries. Our competition for the most part tends to be domestic suppliers so we do not we do not see companies that offer very similar to us in our verticals. You know there are a lot of companies that do love automotive work but most of those are actually owned by those Japanese companies are Korean companies themselves. So we do not see much competition. We tend to have a fairly long runway in terms of the different industries we can approach customers. We can approach commodities we can develop in different countries that we can source from. So we do offer somewhat uniqueness in the last year in all these terrorists are going on and customers are very concerned about China not just the terrorists but the geopolitical situation. You know we have a huge range of growth to move their sourcing from China to India Vietnam and Mexico. So there was a big impedance actually that turned into a nice opportunity for us.

Malcolm Lui: Right now you grew a business quite rapidly 40 million in 2014 up to 65 million in 2017 a flat for this year around 62 million. Can you share what the three biggest drivers were of your sales growth over the past four years.

Hiten Shaw: The biggest driver I would say the one of the most biggest drivers is our proximity to the customers. Our closeness to the customers our ability to work with them in a manner that is so surprising. So one big driver for example is that we took a lot of headaches away from one customer so like forecasting in industries like lighting and some of the appliances and some other things it's really difficult to forecast. So if you're building inventory and the whole operation is bond based on forecasts you're going to fail miserably. You're going to have high inventory someone's and you're not going to have enough. So what about if some very analytical tools to be able to predict what the usage is going to be based on last six months two years for of usage. And and we worked with that model in almost 80 90 percent of the time unless we are told otherwise or from the customer. So that has improved our on time field rates go over ninety nine percent over the last three years. We consistently rank in the top 10 percent of our supplier ratings regardless of what customers look at. And if we're being graded on a 10 point scale on it's going to be over 9 if you're in a for sale then we are at three point 6 0 5 0 4 5 5.

Hiten Shaw: So we always very very closely knitted with our customers to be highly ranked. So when the directors and BP are looking at the supplier selections we always in the top 10 percent and the other is our ability to think suppliers across different parts of the world. So we have been very nimble in moving things. For example when the extrusion it's aluminum extrusion sweater imposed tariffs in us within 90 days we had ever to move production to India. And this status in 2018. And we have about 30 percent of our supply being already developed and some already approved and in production in from India Vietnam and Mexico. So it reduces know it allows us to be very nimble because you endeavor to grow more in developing supplies and if possible or so proximity to the customers and being very flexible in developing a best supplier that matches our need. Are the two big things. And I think the third is the. As I said the analytical tools to do our jobs better based on data sets in our planning analysts are coordinators quality people can work very efficiently and know what's going on even their ten thousand miles away on end and react to it. So I guess that that's that's a part of it.

Malcolm Lui: Okay so the recap in the three biggest drivers of your growth would be one in proximity to customers to your supplier network that's across the world. And 3 the analytical tools and data analyst that you have available to help your clients with their planning

Hiten Shaw: You know Malcolm I would say I would be remiss if I didn't say one more factor though. Back in 2014 we developed what we call list of metrics management system. And so it has five different levels of reviews that happen globally across every one of our one hundred and ten team members across quality supplies and all that and that includes daily huddles it includes weekly blitzes it includes monthly metrics reviews it includes a bi monthly one on ones and it includes the annual metrics reviews as well and so that rhythm that cadence that closing the loop on open issues. You know a very quick escalation of issues is come inbuilt into our culture that has allowed us to be do all of these other things better. Some bad selections too you know moving goods to finding the right venues partners to locations to finding the right shipping partners all of us. So I think the fourth part which I would be remiss if I didn't say about our culture of metrics management system basic

Malcolm Lui: Right. So the fourth factor is a culture and processes to stay on top of issues and and get the work done fast.

Hiten Shaw: Right. Yeah

Malcolm Lui: Okay great. Now can you talk a little bit more. Let's talk a little bit more about all four of these things a proximity the customers are talking about being physically near the customers manufacturing facilities what we mean by proximity to customers

Hiten Shaw: Yeah. It's two things. It's our commitment to every customer is that we want to be within we want to be less than three days from their assembly and manufacturing locations. Number one we want them to not have any more than one 2 three days with the inventory. We want the inventory to be with us because biggest clues are visibility we have on that usages more accurate in our dining models. So that's what I mean and then we have again with customers to we have a monthly reporting systems that goes out to saying this is what we have an inventory is what we have this is how we you know this is what is in transit and be engaged with them on our physical meetings or conference calls and different tools to make sure that we are aware of what's changing in their needs you know whether it's obsolescence into changes the seasons you know Spike orders all of those type of things. We stay on top of that. That's what I mean by proximity to b track them through different tools so that you know we can have the right amount of inventory available at the right time.

Malcolm Lui: Right. So does that mean therefore that in terms of which clients who work with you only work with clients that are near your existing warehouses or will you acquire or build warehouses near a client's

Hiten Shaw: Yeah. So we we have some of our own warehouses and then in some cases we use third party. So when we go into a new location we always use a third party warehouse because it comes up very quickly even in two months. We can have it set up and we can have it only on our SFP with the clear visibility of inventory. And very quick up in-house so. So that's that's really the tool to be because of our SFP and because of all the automation and efficient information sharing tools that we have in databases we can pop up in that house in less than 60 days from a standing start. You know we can go in and there is a whole checklist of stuff that we use to audit you know three four five locations are usually within three to four day period and then then it's another two to four weeks of negotiations and you know verification their customer referral checks all that and then leaves more goods. So

Malcolm Lui: And enter these new warehouses that you set up. You just bring people in to operate them

Hiten Shaw: No. So in the first start is always a third party you do not operate our own bathhouses until we have a certain degree of revenue.

Malcolm Lui: Okay.

Hiten Shaw: So so we have one location that we use that we operate ourselves in Mexico one in Ohio and one of the other locations that are up House is basically

Malcolm Lui: Right. Okay so how do you trust that these warehouse operators aren't gonna screw things up.

Hiten Shaw: It's very difficult. And so we have learned if you know we have I have in my office a failure wall and every year we look at and we have put a new frame together of all the things that we could have avoided. And. And back in 2010 Twelve 13 and 14 all three new locations that we started. We picked the wrong warehouse partner. So. So since then now we have a pretty sophisticated checklist filters to kind of look at what to look for in a warehouse plus people operated now in bars. So we know how efficient they need to be and my simple questions like how many trucks were over the load and unload and how do we keep track or psychic comes in how do they deal with these portrayals and all these processes that we know have to be you know what is the benchmark standards. We were not looking at those before. So when we are auditing we are doing three four five. We started running five names and then we have a team of at least two people that go visit and ordered these suppliers these various partners and and usually it comes down to the final two that we really negotiate hard bit.

Hiten Shaw: And once that's done then we basically have an in-depth so that people are saying these are the things that we need you to do so we brought in our own software rather than logging into their systems and stuff like that. We developed all those add ons to our recipe. So every day our house basically enters the system it costs us a little bit more but we are not worried about any different operating systems and their own biases. So we insist on all the inventory being into our own systems and there's a whole detailed you know processes that we've written that we give them access to. It's an important part sweep process So you know everywhere else people can go in and click click click through and work in the test environment immediately. So that's how we've avoided by standardizing processes by adding more filters by more checklists and having at least two people evaluated when I'm not one because

Malcolm Lui: Right.

Hiten Shaw: We've had misses in the past. So you know L.A. for example two on water as we have a small bounce in China that we use for certain purposes all this stuff has been done using those processes

Malcolm Lui: And how often do you have your own people visiting those warehouses

Hiten Shaw: So mean we have a third kind of analysis at least every quarter. Our coordinators go they do the physical comes the vehicle with any issues that are having and we usually tie those in with the customer visits. So you know our goal is always that every quarter somebody is in those third party houses ensuring a good proper alignment is that in terms of the service levels. If it is a truck that needs to leave at 8 p.m. they need to work overtime. You know it doesn't have to be a big issue we pay them and they take care of it but

Malcolm Lui: Right.

Hiten Shaw: They can't. They can be free

Malcolm Lui: Right. And the warehouses themselves the way they operate inside. Is it super automated robots conveyors and all that thing or is it very manual and people are driving around with forklifts and moving pallets

Hiten Shaw: Yeah.

Malcolm Lui: Around on.

Hiten Shaw: None at all. Our rhythm and cadence is not fast enough for robots and stuff. So they are still driven using a traditional warehouse but we do have a fair amount of automation in terms of you know which which powers the park study and the to be added which converted our Ohio warehouse last year to a shorter aisles. So instead of like twelve feet I was down to eight three guys and that improves our skid number of locations by almost 44 percent. So we've been through all of that. In Ohio we're going to be rolling now in Mexico this year. And you know those that so we have certain negative efficiencies and then the panic positions that are done using you know using our house systems so we don't rely on people to say rates of goods and write off the goods as soon as the first five parts would still go it's going to be f 30 to row and then it's going to be 30 to

Malcolm Lui: Right. Got it for the second driver. Talk about having a supplier a supplier network across the world. Now when you say suppliers you come up fairly commodity ice products and parts so that you there are there is a list of suppliers you can turn to at a moment's notice or are you talking more about suppliers who can provide you with custom designed parts on short notice.

Hiten Shaw: A year. So custom designed part. So it does take a little time to develop some of the tooling and in preparing to make machining preps and stuff and then all of our products are in industrial products so we have to go through those spare samples or PPA parts approval at the start to make sure that it meets the design specifications and that a certain degree of testing we have done. And then the customers were tested and approved for us to use this. So what what does help is that you know as I mentioned you early on the exclusions was one example where there was a countervailing duties a hundred percent that China imposed that China was imposed. And know we moved a lot of what extrusion basically to India were a two to four month period. We have the same issue with this tariffs we've moved towards around being shipped to us from India China Vietnam to Mexico because of NAFTA content for example. And you know we moved about maybe 13 14 to us over the last two years to Mexico instead of relying on the tool. So we said this what it is we pay the tools to the supplier and within six weeks in Mexico we're doing the trials and then eight eight nine. We're not in production so that's what I mean by being nimble on what we invest each and had for example needs. They have to have a domestic naphtha content. So we ended up moving a lot of the production to Mexico for them. So

Malcolm Lui: Do you or do you tend to go to the same suppliers often or do you or is that a constant. Are you constantly finding new suppliers

Hiten Shaw: No. So we have. So that is the new suppliers usually for example in some of our commodities like aluminum casting zinc iron and things like that. We're always finding new supplier to support our growth as well as to balance certain things. So you know we're deep into some of these commodities maybe looking for very high precision you know die cast her but you know lead testing and pretty intensive requirement for automotive component very precision. So so our search for new supply never stops. We are always you know auditing that as a whole being sourcing team that is always in touch with new supply. We're always looking for example there's a big demand right now for different countries outside of China but where they have to have sixteen hundred tons and over capacity those prices have to be worth sixteen tons. Well those are not easy to find. So we always have our sourcing teams on the ground saying hey we need some additional capacity. Sixteen hundred thousand tons in India and Vietnam in Mexico. So that is a very specific need you know like that and you know we have a specific need for iron. We have a specific need for some copper forging. For example some very aluminum bronze castings for example. So we are always on the prowl on you know for very specific processes technologies material expertise or tolerances and application expertise.

Malcolm Lui: Now. Are you doing this when you have a client order in hand or are you just constantly looking and being proactive and being ready

Hiten Shaw: Being ready. That's the key. So we'll be in the past we always are relying on the audit cues to come and then do it. And we have quite a few failures because of all that. So now you know we do not pursue business in many cases unless we know the supplier. In fact we have been building a lot of prototype not in B2C just to ensure that we can make the stool to type requirements and as a not only expense in anticipating that some of these orders would come as we negotiate sales of

Malcolm Lui: So you're more than just simply a middleman who between the manufacturer and the supplier of the parts. I know that you're really quite involved with designing the parts and making sure they're made to specs

Hiten Shaw: Right that I mean on a quality team is the biggest team you know in our in our company globally. So we have you know sourcing quality. We have inspections. We have quality leads that look over different things. We have a supplier audit team all of that stuff. So I think about 25 percent of our team is in the quality and also on

Malcolm Lui: Right

Hiten Shaw: The other. So

Malcolm Lui: Now. Are

Hiten Shaw: We

Malcolm Lui: Other firms in your competitors structured similarly or is the way that you do your business unique to any s

Hiten Shaw: We have not found anybody that that we can say is a pure competitor. That's very similar. I'd like us. We just haven't. I mean. And you know again we'll build this because of the needs that we have seen with the customers and in some cases just anticipating them all having failed. That's telling things in the past. So we're kind of you know we we're not trying to copy anybody. You know we're just doing our thing trying to you know often replace domestic suppliers in some cases the fragmented suppliers from different countries. So as we've seen the need we've done it. We have not really conformed to any adherence. I mean we are really one of the few teams that does not you know customer service and purchasing teams almost like in one team you know usually you want that wall in between. But but because we have been planning to it's around it just made sense that we set up.

Malcolm Lui: Right.

Hiten Shaw: So that's very unconventional we think and what does work for us and it's continued to work. So we're not going to change that. We're just being we're just adding more troops to make it better

Malcolm Lui: Yep for your third driver providing the analytical tools and data analysis that allows your customers to be better and to be better in their own planning of their production. Can you share a bit more details about that how about came into B and how you d how you determine what to provide

Hiten Shaw: Yeah.

Malcolm Lui: To your customers

Hiten Shaw: You know the problem is that one of the issues that you don't have to do our jobs well you know we need a good forecast that we can base our operations and purchasing planning on. Unfortunately in some of these industries the customers just have no idea. And so after banging your head against the wall and in our inventory being up and down up and down up and down we basically have been through different companies consulting companies as well as university students and we sponsor a variety of different projects to say how can be pretty better forget about a customer. Our analytical tools out there that can actually allow us to beat them with a high degree of confidence say this is what the future will be. So we based it on that. And so using different universities for almost a two year period we finally with Purdue University being able to build a model that actually predicts. Do you know what the future of usage would be based on the last six months to 12 months worth of usage and what that has allowed us to do is to focus more on operations in the sense that we could reduce our lead production lead time at the suppliers down from four or five six weeks two to three weeks maybe even one week in some cases. This allowed us to basically be very and to break up the parts into a lot more refined categories. So we have been anchored by a B C D and N and these are all based on different forecast frequency of usage. The level of usage oftentimes are dollars used as well. So it's obviously a lot more intelligent and and not rely on bogus forecasts that really nobody knows what's going to happen anyway.

Malcolm Lui: Yeah

Hiten Shaw: So

Malcolm Lui: Yeah

Hiten Shaw: That's what I mean by just being very intelligent the other one is that you know we got the smart 50 award from the state of Ohio we've been nominated four years in a row for different developments and last year we got Innovation Award was that we have a quality app that we have developed so every one of four engineers they're supposed to report every day from whichever suppliers they're visiting what they've seen and if it's a problem that they found then they reported as a problem and it gets alerted globally to different members that need to know about it can help it. And then you know that that's another tool we have developed our own automation portrait mesh. So all of the auto Q is for example that you send out on a pickup button and send to five hundred suppliers in the database and ask all of it for dessert. So you know those those automation tools have allowed us to be a lot more intelligent a lot more flexible and not more engaged and reduce repetitive task and focus and more knowledge based stuff

Malcolm Lui: Right. Very cool. No in my business school days we as a class We simulated a supply chain right. It was pretty easy to predict what was needed when it was steady but all it took was one little bump right. One change

Hiten Shaw: Yeah.

Malcolm Lui: Just one time

Hiten Shaw: All

Malcolm Lui: And then

Hiten Shaw: Right

Malcolm Lui: All of a sudden everyone in the chain was trying to make the prediction that based on what they had saw recently to

Hiten Shaw: Ray

Malcolm Lui: Figure out what they need in the future and that messed everything up.

Hiten Shaw: All right. And so we rebuild build have our own banning theme models and now we are really refining that. This year's goal is to refine that on a park level rank basis. So certain things would be escalated and certain things would be done differently. So now we just you know we keep it. That's why I don't think we emulate anybody I think we just stop. We have a very very strong sense of metrics we get to that in the fourth issue here

Malcolm Lui: Right. Yeah. And yes that does bring us to a fourth issue here. You talked about your you develop a metric management system. Talk a little bit more about how that came into being in fact in 2014. What what aha moment you had to sell. We need this

Hiten Shaw: So.

Malcolm Lui: In

Hiten Shaw: So I think if you if you know the thing I know you will you're looking at a three year sales growth but you know we got a million dollars in sales back in 2010. So it's you know it's been a pretty strong ride all the way up from that. And I think we're now setting up new base to you know pretty rapid growth in the next few years again. But the the thing is what I found back in 2009 when we were just getting started was that I spend a lot of time thinking about what is really important. We found an opportunity that this is a very scalable opportunity in certain industrial categories and certain industries that we can be a very large business in doing this supply chain. But how do we measure success. So we measure success by you know if we deliver it on time the customer satisfaction is there on time delivery is one if we deliver good quality or parts per million. Another important quality thing. In order to keep both of these good. If we don't go bankrupt by keeping optimizing on the inventory that odious already and different ways of looking at inventory those are the three metrics that we have tracked every month since May of 2009 9. So we're coming up on a 10 year completion level here and then but all three metrics are reviewed with globally on a metrics management metrics meaning basically once a month that we have.

Hiten Shaw: And so that's one thing that we started off with. And then what 2014 nine went through a lot of different books as we were scaling up. And you know we develop a daily huddle routines. Then we said OK we need to have a weekly blitz so that the daily how they usually get in the same teams and keep business up with global teams inter-departmental. So you know and then we pushed a lot of those meetings through Monday so Monday as we started 8 15 and we ended literally 430 globally every meeting for our excuse for quality for finance or marketing for I.T. all of those need on Monday is for the most part be a few teams that meet later in the week for various reasons but most of those blitzes take place and the agendas for those are set usually you know either Friday or the weekend so that Monday meetings are very fruitful they focus on important issues the escalation issues and all of that. So that allows us to you know be on top of the issues as they happen and then we have our monthly so in our daily huddles we give this his monthly metrics and then one on ones with individual team members where we look at the effectiveness of their work then interest in their work.

Hiten Shaw: Interesting assignments that they have special things that they love that. And then an annual calibration on Hey what how did the year go and what do we do and then one of the critical things that our monthly metrics is we look at last month's successes last month's failures and next month's focus. Those are the three main things that we talk about. So we may have had a very good launch for something they may have had a miserable issue with the customer. But all of those pluses and minuses were highlighted and we talk about them saying you know this is what we need to do this department this team owns it whatever it is. And then next month this is what we're going to focus on. We've got to get this SVP notch down. You've got to get this supplier properly done. We need to get this contract with the customer. We need to get his I.T. Applications launched. All of this stuff whatever the issues are they're all in front of us. Last month's past successes and failures in next month's focus

Malcolm Lui: Right now. Did you have a image that you do not a reading as any particular books that really inspired you to put this process together.

Hiten Shaw: So that the daily huddle routines and stuff came from this book on scaling up the monthly metrics is something that I just I was truly indigenously develop because I wanted to know what's important matter. Once a month at least if are attacking it then it's good enough. So no monthly metrics is something that I write about. And then you know the scaling up has his daily huddles it doesn't talk lot we did this is what we had because we only have a third of our team in the US but that's what the team is in different countries different time zones different cultures different languages. So I introduce the whole month the weekly basis to kind of get that exchange and then within a couple of months we say hey we can't have these big business on every day of the week. So we push to get majority of them done on Mondays so the rest of the week people are free to travel or whatever else they need to do so. So some of these you know just the book in terms of the temporary business the scaling up is a pretty interesting book to read for in our daily huddles and how we manage that but the rest of it is just like one on one comes out of different books like The several books and like the Google one of the H.R. director of food. If a child wrote about Coop and I forget that a few other practices that talk about one on one. So that's important to the managers of any engaged individual team members. And then I just I think that in general the underlying theme is that I want to do what if I was working in a company and you know somebody then I would want to know these days. How did I do last month How am I going to do next month what am I going to do next. And you know so that's been going on that whole personal interest and curiosity and drive

Malcolm Lui: Right. So how many hours a day do you read.

Hiten Shaw: Not you know it depends. I go through as far as where I could read you know two hours a day sometimes. But I'm reading at least an hour a day at the very least if not

Malcolm Lui: You

Hiten Shaw: More.

Malcolm Lui: To get have it

Hiten Shaw: Yeah

Malcolm Lui: Always on new stuff to learn.

Hiten Shaw: Yeah.

Malcolm Lui: So for 2019 what can you share with us about yours. Your growth in sales plans and targets

Hiten Shaw: We just did it to love our sales department and a couple of different teams and live in more industry focused teams. So you know we are part of it is to do double again in the next three to four years and we have a lot of traction in European sales. We've gotten some good long term contracts with some of our large customers here and you know over the last three years customer diversification outside of lighting was the biggest drive for but last two or four years and now we have you know we call Siemens Emerson Honeywell all these different customers are very new customers for us. So we have a really strong runway. If we take care of them and satisfy them then we'll be able to keep going with them. It's

Malcolm Lui: Right.

Hiten Shaw: A big big opportunity.

Malcolm Lui: So how much of their of their lighting business are you helping them with right now

Hiten Shaw: I'm not going to get into that percentage because they would not want us to what

Malcolm Lui: Sure.

Hiten Shaw: We eat is a significant percentage share across a lot of the large lighting Williams like

Malcolm Lui: Ok.

Hiten Shaw: Eaton.

Malcolm Lui: It's not. It's not the case for you just doing a small bit in music a huge amount to grow within the firm within those firm

Hiten Shaw: We we we have a fairly large opportunity for example the newest lighting customer that we added in the last 18 months is Philips which is signifying now and lighting

Malcolm Lui: Like

Hiten Shaw: And those those are basically very very small things for us but it could be you know it could be a large millions of dollars of opportunities

Malcolm Lui: Right now. Typically when minutes a global firm is working with you how much of their supply chain do they have you help with to start. Typically in

Hiten Shaw: So be it because of the nature of the breadth of offering for us. There's always some aversion there's always some concern that hey how are you going to manage quality. How are you going to make sure the inventories right all that and and be present with them are tools in our techniques and our processes. But it's not enough. So we always start on small opportunities with those customers to be able to prove to them that you've done Wells launch some of these parts well and then keep going more and more so you know it's a sequential is usually a five year growth curve with these customers to get

Malcolm Lui: The

Hiten Shaw: To a significant a few million dollars each with so

Malcolm Lui: Right. But how far would go. Because it would be risky for them to to rely on you to handle 100 percent of their supply

Hiten Shaw: Oh

Malcolm Lui: Chain right.

Hiten Shaw: No no no. Okay. So I mean just the lighting industry aluminum die casting for lighting is about 270 million dollar global spend. I mean North American spent just that we have the iron spend for just out into iron spend is almost a billion dollars but in our verticals you know it's almost a one point eight billion dollars. The Forging spend is equally so. I mean we have we are not we had never going to be more than 30 to 40 percent of a specific commodity spend on a specific customer.

Malcolm Lui: He

Hiten Shaw: So that's all of this that customers are very very leery of giving us more than a third maybe in some cases 40 percent but

Malcolm Lui: Right.

Hiten Shaw: Hey look you guys are big enough now. I know we have those pretty candid conversations with

Malcolm Lui: Yeah

Hiten Shaw: Them we don't

Malcolm Lui: It's

Hiten Shaw: Want

Malcolm Lui: A risk.

Hiten Shaw: To.

Malcolm Lui: The

Hiten Shaw: Yeah

Malcolm Lui: Risk thing from their perspective

Hiten Shaw: Yeah yeah

Malcolm Lui: Right.

Hiten Shaw: Absolutely all these guys say you know they're nobody. None of these directors and BP are going to sign off on to big friends regardless of how good we are. So. So they are sensitive to it and we are also sensitive to it. So

Malcolm Lui: Right. Okay let's get interesting to see how they are evolves over time. How does how does your sales team go about finding new business.

Hiten Shaw: We have trade shows. We have pretty good leads that we generate from our social media things and a lot of cold calls. You know like we say the last few years we have added a lot of new customers. So the goal this year is that we get into more deeper into all of these customers that we already have the vendor course from and everything else. So. So it's focusing on these large customers. SCHNEIDER electrics and Siemens and Emerson and Honeywell all these guys globally can basically be exponentially worse.

Malcolm Lui: Oh yeah. Now when you go deeper within your customers these huge global firms is on a one on one base it is where you're working your your point of contact asking them you know who else within their firm in a different business unit different product line where you might be worthwhile or might be worthwhile for you to have a conversation with them do you do that approach or is it more of

Hiten Shaw: Oh no. So we we do have some very specific introductory letters that unite to target clients. The media shows that offer these one on ones and stuff. So we take care take advantage of that a lot. But our sales tend to be pretty long cycles sales and it takes a year to convince everybody on this thing

Malcolm Lui: Sure. Now do you know who to contact when within these global national and global national firms that production facilities across the world

Hiten Shaw: Of

Malcolm Lui: For

Hiten Shaw: Either

Malcolm Lui: News for new business generation

Hiten Shaw: What was it again said Ask me a question

Malcolm Lui: I mean

Hiten Shaw: In

Malcolm Lui: Do you already know. Do you know who these people are that you should reach out to.

Hiten Shaw: Yeah

Malcolm Lui: That is

Hiten Shaw: Yeah

Malcolm Lui: Quite a mystery really.

Hiten Shaw: Yeah yeah. No no no we we we we have a pretty good idea. We do have a lot of different databases that we use. You know we have a lot of people that we have on our newsletters that we send out blogs that we send out. Even hard mailings sometimes we do. You know I mean our target for you know is almost 800 different clients right now. So we know it's going to take time just to get through all of them. So we have a pretty good idea that we use a lot of these subscribe to a lot of different services like coolers and said see this not to you know make sure that we get the right context.

Malcolm Lui: Right. Okay. How do you typically approach the people at these 800 different companies that you're talking about the

Hiten Shaw: Well in something some We've basically gotten to meet them at the trade shows and suddenly to cold call somebody to introduce letters and then follow up email talk. So the best stuff is what I do different things it's not one thing. I mean

Malcolm Lui: Right

Hiten Shaw: That's how we got that lead on how we decided to go off that

Malcolm Lui: Right now I imagine because your your service touches and impacts your clients businesses in so many different ways. It's never just one decision maker. I would imagine that there are many other stakeholders within your client companies that are involved

Hiten Shaw: Yeah

Malcolm Lui: In deciding whether to work with you.

Hiten Shaw: Right. Yes.

Malcolm Lui: I mean how many typically do you have to convince that you're the right solution. Typically

Hiten Shaw: You know it's really interesting. And things that we have a sales meeting going on this week actually. So one of the things that we talked about was how different kinds of structure differently and we have a couple of large clients where you know global commodity manager can basically make a decision to add as a buyer. And he has really internal selling. But that's only got to we need to sell and he's got enough decision making authority and responsibility to make that others. You know commodity managers are you know even so by him managers and stuff they'll bring us in to present to the directors and make sure that they are involved in that better. We had in one in helping them sell to their managers so if you know really all different customers of seven different

Malcolm Lui: Right. Okay. Now what do you what would you say are your biggest marketing and sales challenges the ones that you need to overcome to double your business in three to four years.

Hiten Shaw: I think just walking away from the opportunities that are not right we believe these tend to spend the least a lot of time on things that we should have known early on not to pursue. And then the other is just you know refining our continue to refine our methods. I mean if you find our methods refine our message on how we're approaching. So they do you give us the opportunities that you know we can help them.

Malcolm Lui: Right. So when you say you're walking away from business that are a bad fit for you. How did you get into that conversation. Conversation to begin with. Right. I mean ideally you should never have those conversations from the get go. Right

Hiten Shaw: No no no no no no. I mean we get a lot of things I mean our customers reach out to us you know large automotive customers some restocked over the last year or two and they'll ask us to board a million visits and and then we excitedly participate in that whole thing. And you know those several high volume stuff will never be successful using our model of using our overhead using our pricing and stuff you know we need to not participate in those. So that's what I mean by that I think and then you know we need to ask for these specific high to low mid volume components that low low to mid volume components. We know we have a competitive one and it is not very convenient for domestic manufacturers to make that. So we can add value to that mix of parts.

Malcolm Lui: Right. Makes sense for them to find a supplier to do that for them for those low to mid volume

Hiten Shaw: Yeah

Malcolm Lui: Components

Hiten Shaw: Exactly. So

Malcolm Lui: Like

Hiten Shaw: We exclusively focus on those simple components

Malcolm Lui: Right. Got it. All right. So you're you're finding that contacting and engaging the 800 companies in your target list isn't that isn't something that top of mind for you. Your team has it under control

Hiten Shaw: Does not mean that there is a plan for it. It's not under control. So I. Yeah I mean if there is a better way to approach something like that in real look at it

Malcolm Lui: Right. Okay um three last questions for you.

Hiten Shaw: This

Malcolm Lui: You say you're on a freeway cruising at 70 miles per hour and you see a billboard or that you see your billboard. What would be your billboard message and keep in mind. Typically people only have six seconds to read a billboard before they drive by it.

Hiten Shaw: Yeah. You know for the last six months it's been a while. China tariffs. So I think otherwise we tend to have a little bit different dance. I think in the last six months you know what Chen terms otherwise it's usually you know we have engineered supply chains essentially is what we offer

Malcolm Lui: Engineers supply change. OK.

Hiten Shaw: Right.

Malcolm Lui: Got it. And can you recap again who your ideal clients are I know you talked a little bit about the ones that have low to mid volume components and the best way for them to reach out to you to see how you can help them

Hiten Shaw: Really. That we know them sending good thing going to our website understanding a little bit of what we do because we do have a pretty comprehensive site. And then reaching out to us and we jump on that pretty quickly using it within 24 to 48 hours somebody is reaching out to them on what they and how do they need. What can we do. So

Malcolm Lui: Sure. Now. I know that you're involved with certain sectors that are in verticals. Those are the ideal customers

Hiten Shaw: Yeah

Malcolm Lui: For you.

Hiten Shaw: It's

Malcolm Lui: Did you want to highlight those verticals again

Hiten Shaw: Yeah.

Malcolm Lui: And.

Hiten Shaw: Yeah. Yes certainly. So the the verticals that we're focused on the lighting customers offroad vehicles and you know mining so like tractors combines those type of customers and then automotive OEM sentiments suppliers those are the three main range of suppliers that customers

Malcolm Lui: And do they need to be of a certain size to

Hiten Shaw: Yeah

Malcolm Lui: Do

Hiten Shaw: We

Malcolm Lui: That.

Hiten Shaw: Know we typically look for Fortune 500 companies too because there is enough available purchases that makes it worthwhile to spend one or two years developing them and then growing them into a few million dollars and cents. So it needs to be at least a billion dollars in sales or more

Malcolm Lui: Right. Okay. And you have operations around the world and not necessarily in the United States.

Hiten Shaw: No. I mean old warehouses. We have a small business in China that we use in Poland that we have Mexico. I mean three locations a couple of locations in the US and it would probably add something in India by the end of this year to support our global customers.

Malcolm Lui: Right. Would you like to share the domain name of your website.

Hiten Shaw: Yeah. It's m e S I N C connect.

Malcolm Lui: All right. Fantastic. Thanks. Thanks so much for joining us today hitting and

Hiten Shaw: Thank

Malcolm Lui: Sharing

Hiten Shaw: You.

Malcolm Lui: How you accelerate your company's high value sales

Hiten Shaw: Thank you so much Malcom really appreciate it. And thanks for the opportunity.

Malcolm Lui: We've been speaking with Hiten Shah, the President of MES, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit

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