Power Tool Industry June 2017
Robert Bosch has formed a strategic partnership with Chinese online trader Alibaba in the field of digital marketing in China, where Bosch sells power tools, household appliances, automotive accessories and heating and cooling systems.
STANLEY BLACK & DECKER
From Investor Day:
They call the Stanley Fulfillment System SFS 2.0. They describe it as an operating performance system with five important elements: breakthrough innovation, digital excellence, commercial excellence, core Stanley Fulfillment System functions and functional transformation.
Their growth goal is to double the size of the company over the next six years to $22 billion. They plan to do that by growing existing businesses organically by 4% to 6% per year and adding between $6 billion to $8 billion in acquisitions. The Newell Tools and Craftsman acquisitions will add about $2 billion of that goal.
They credited SFS 2.0 with spawning FlexVolt. They reportedly have another 10 breakthrough innovative projects in the pipeline. Innovations include new products, processes and business models, many of which are digitally enabled.
Their Digital Accelerator Team, which was formed in 2015, will double to about 100 employees by the end of the year. The team is comprised of world-class technology talent from leading universities and companies with expertise in IoT, cloud, advanced analytics, social media, mobile applications, search engine optimization and digital products, among others.
The focus on innovation and digital transformation extends to manufacturing, where they are rapidly deploying Industry 4.0, which enables their “make where we sell” strategy. They have gone from making 30% of products where they are sold seven years ago to 45% today. They have made more than 1 billion units of product in the U.S. in the past three years, and have increased their headcount 40% over their 11 network plants in the U.S.
Two of their manufacturing facilities are in the process of becoming truly smart, incorporating the latest in robotics, manufacturing execution systems, machine learning, 3D printing, innovation labs and makerspaces.
They are also elevating their commitment to corporate social responsibility with ECOSMART, their environmental, health and safety system. In addition to being positive for their communities and employees, research shows that purpose-driven companies simply outperform others.
Their global tools business will be greater than $8 billion by the end of the year. They have 50,000 customers for tools in 199 countries through four vertical markets. Two-thirds of their actual growth in tools over the past three years has come from new products.
They are number one in power tools for consumers and professionals and number one in hand tools and storage across construction, automotive, power tool accessories and storage. They are in a number one, two or three position in every major market of the world. Their goal is to be number one or two. They believe they are more than 70% larger than their next closest competitor.
Their quality today is 40% better than it was seven years ago.
They described FlexVolt as the greatest innovation in the last three decades. According to customers, it was our best launch in history, with a customer rating of 4.9 out of 5.0.
They own 20% of the corded tool business, and there is no doubt FlexVolt will take share from corded. It is too early for them to tell how much cannibalization there will be. In 2016 they launched 18 new power tools and 45 accessories for FlexVolt. This year they will launch 12 new power tools and 25 new power tools accessories, including outdoor power equipment. Over the next few years they plan to launch another 15 tools and 20 accessories and continue to expand the technology.
They think there is a big opportunity for them to take advantage of Craftsman’s legacy and greatly improve Craftsman by innovation.
When they acquired Irwin and Lenox they had more than $9 million in backlog—orders that could not be filled. In six weeks they reduced that to $2 million.
In the seven years since Stanley and Black & Decker merged together they have grown the Stanley brand 24%, the Black and Decker brand 28% and the DeWalt brand 71%. Over the past decade and a half their tools franchise has grown from $600 million to more than $8 billion. This year they plan to grow the tools business by $1 billion for the first time ever. For the company to grow to $22 billion by 2022 they would have to have a tools business in the $12 billion to $14 billion range. They believe there is still a lot of share to be gained in the tools business.
Chasing volume in the power tools business can put a lot of pressure on the ability to grow margins because power tools are very promotion sensitive.
They would not discuss sales by channel, but did say they are the number one tool provider via ecommerce as well as number one in brick-and-mortar channels.
Charlotte-area industrial developers confirm that SB&D is looking for a partner to build a 400,000-square-foot tool manufacturing center in northern York County. Insiders say they believe the plans are part of SB&D’s commitment to more American manufacturing in the wake of their Craftsman purchase. A request for proposals has gone out. SB&D already has a DeWalt hand-tool factory near Carowinds. Developers say that the company wants the new plant to be in York County in order to be close to the existing DeWalt plant. There is also a 925,00-square-foot tool distribution center called Stanley Logistics in Kannapolis that employs 3,000 people.
Veteran Stanley executive James Cannon will become the new president and CEO of FLIR Systems in mid-June. FLIR is an Oregon-based manufacturing firm that designs and develops thermal imaging, visible-light imaging and diagnostic and advanced threat detection systems. He was most recently president of Stanley Security North America and Emerging Markets.
TTI/Techtronic Industries is being sued by Sears for allegedly attempting to change the terms of Sears’ contract with them to manufacture Craftsman tools for the retailer. See the full story under Sears in the Retail section.
Q1 revenue rose 5.0% to $613.9 million, based on the new segment financial reporting previously announced. Buildings and Infrastructure revenue was up 8.0% to $188.1 million. Geospatial revenue fell 2.0% to $149.8 million. For the second quarter Trimble now expects revenue of between $625 and $655 million. CEO Steve Berglund said that their outlook for the remainder of the year anticipates continuing year-over-year improvements in both revenue and profitability.
Trimble acquired NM Group to expand their energy portfolio and provide visual and 3D asset management. Financial terms were not disclosed.
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