K&M Tire has enjoyed steady growth throughout its 53 years in business, and more is on the horizon for the Ohio-based tire distributor. Just ask K&M President Cheryl Gossard, who made it clear that she’s not only excited about what the next 50 years will bring, but also that K&M is in the business to serve dealers for the long haul.
“What drives us has never been about being the biggest or keeping up with neighbors. We do [this work] because it’s fun, and we enjoy it,” Gossard told dealers during K&M’s 2023 Dealer Conference & Trade Show in Las Vegas last month. “We love going to new markets and signing up customers. We continually focus on trying to understand your business frustrations and come up with options and solutions to make your business as successful as possible. This is just one example of being all in.”
Taking from the conference’s theme of “All In,” Gossard sat down with Tire Review to share how the company is “all in” on serving its dealers, from improvements to its demand forecasting to the growth it has made westward to supply the right tires to its ever-expanding dealer base. Find out from Gossard how the business has grown and improved and what she sees as priorities for the future of K&M Tire.
Maddie Winer, Editor, Tire Review: Let’s talk about this year’s theme of “All In.” What would you like dealers to take away from this year’s conference with that message?
Cheryl Gossard, president, K&M Tire: To me, the theme “All In” just really represents K&M, who we are and what we try to be. We want all of our K&M dealers to be all in so we can take care of them the way they should be taken care of. We feel like if you’re all in, you’re giving it everything you have. You don’t give up, you keep pushing forward. If there’s a problem, you don’t quit. You figure out the solution. That’s going to help them be successful. Hopefully, it’s something that they can take back and implement at the shop.
We also want them to know that at K&M, we’re not just all in, we’re all in for the long haul. We’re going to be around for a long time.
Winer: It seems like we’re getting out of some supply chain troubles. How are you seeing the supply chain today? Can you give me a brief overview of how K&M has changed and adapted its business to make sure it has the right tires in inventory to keep up with customer demands?
Gossard: It’s probably been a four- or five-year project where we saw the need and wanted to restructure our purchasing department. We used to have separate purchasing, inventory and supply chain teams. Now, they’re all in one department.
We had the vision, we knew where we wanted to go, and then had to figure out how we were going to get there. We started right before COVID in 2019… We knew we needed to advance beyond what we were doing. So, we started with one business analyst and really worked with him, our vice president of purchasing, which is Mark Knippen, who helped to develop what we needed at K&M and what we needed somebody in that role to do. Once we figured it out, we hired somebody for him to train, and then we promoted him.
Again, it’s been several years just changing how we do things. We bought business analytics software that helps us pull data from our system so we can see trends. It’s been four or five years of overhauling the entire department, and it’s been helpful.
It also gives us the ability to have specialized people work with vendors and do collaborative meetings with them. A lot of the vendors want to collaborate so they understand what we feel like we’re going to need in two months, and so then they can help use that information to feed their manufacturing so they’re making the right product we’ll need when we need it.
It has also helped with supply issues in the last couple of years. We’re working with vendors to know what should a replacement be, hopefully in that brand, but if not, then in a different brand because we want to make sure we have a tire in that size for customers. We’ve spent a lot of time with the restructuring of that department. We’re almost completely finished, and we have the right people.
Winer: So, from a dealer perspective, would this give K&M more of an opportunity to have a certain tire size that they might need?
Gossard: Yes. To me, the advantage to our customers is we have more of the right tires in stock or we have an option in the size that they’re looking for.
A year or two ago, when supply was tight, we probably did a lot better job of having tires on hand than our competition, and I think it’s because of those folks. We had people just spending their entire day figuring out what do we needed to do differently as far as ordering to make sure that we had tires in stock. And if we couldn’t get this one and the vendor was saying, “It’s going to be 60 days or 90 days,” then we weren’t just saying, “Okay.” We were trying to figure out a solution.
Winer: Do you see that team expanding or growing as the company grows?
Gossard: I think right now with it being new, we’ll be good for a little while. Certainly, over time, I think we’ll have to expand it. But right now, we want to spend some time looking at our software. We want to see if there are more things that we can implement to make sure that we’re able to do a better job forecasting.
Winer: K&M grew last year with the acquisition of Midtown Tire in Rochester. In what ways is the company looking to grow geographically?
Gossard: With the Midtown acquisition in May, that was an area that we were looking to grow in because we were already in the Albany, New York, area and also have a location in Pennsylvania. So, we were getting to the surrounding area and saw that there was a lot of potential there. That was a great acquisition for us.
We just recently opened up a location in Carlsbad, New Mexico, on January 16. We were servicing that area from Lubbock, Texas, and just felt that there was more opportunity. We knew if we put a location there, we could grow the business quicker and go further west. That’s one area where we look for a lot of growth this year and for the next several years as well.
Really, we feel in every area that we’re in that there’s just always opportunity. There are customers there that we can get more of their share. There are customers out there that are buying from somebody else and we would love from them to buy from K&M. We continue to have our outside sales group, our biggest sales team, knocking on doors. A large portion of what they do is new prospecting. We’re always looking for more customers in the areas that we’re in.
Winer: So, I’m curious to get your take on how consolidation in the industry, among both distributors and dealers, has affected your business. How does K&M compete knowing that’s out there?
Gossard: It’s an advantage for K&M because a lot of the independent tire dealers, I feel like they’re drawn to K&M because we are like them. My dad started in 1970 and had a two-bay gas station and had to struggle through starting a new business. So, we understand what our dealers are going through, and we try to help them find solutions that’ll be helpful to them so they can be successful.
I feel like a lot of the independent tire dealers, I think they really value just working with somebody that can relate to them. They get that with K&M. We talked about our theme of being “All In.” We’re trying to figure out what they need so we can provide them with solutions that would help them with those needs. I’m not sure everybody else out there does that.
Winer: You spoke about restructuring the purchasing department to better forecast tire demand. Can you tell me more about other things K&M is working on to improve its customer service in 2023?
Gossard: There’s a lot of things. One thing about K&M is we’re always focused on continuous improvement. First, our online ordering system, Web Link…a lot of our dealers tell us they really like it. It’s simple and easy to use. But for this year, our plan is to add some features to it. We don’t want to change what we have, but we want to give them some additional things that would be helpful for them.
Another is our delivery. We’re always looking at what time our last delivery is made, and if it pushes a certain time, then we watch that for a bit to see if that just happened once or if it’s going to be consistent. If it’s later than what we’d like, then we look at what we need to do to change that. Do we add a route? Do we need to look at changing the route? Our customers get delivered in the same order every day, and sometimes, it’s not always the most efficient way to deliver them, because not every day the same customer’s order. But we do that for consistency. If a dealer gets delivery one day at 8:00 a.m., the next day at 10:00 a.m., and the next day at 1 p.m., they don’t know what time our trucks will come the following day. So, what do they tell their customers?
We feel it’s really important that they know within about an hour or so what time our truck’s going to be pulling in. That way, they can schedule their customers for the tires that are coming on our truck for delivery. So, we’re really looking at our logistics and routing software to see if there are improvements there to be quicker.
There’s always a lot going on at K&M, and that’s how we like it.
Winer: At K&M, what do you see as the future in terms of how the company operates, projecting five, 10 years down the line? Will we see robots in warehouses or driverless delivery vehicles?
Gossard: I don’t know. That’s really hard because I have yet to see automation in distribution. I’ve seen it in manufacturing, but not in distribution. Me, I’m very interested in it, and I feel like there is an opportunity there. But when will somebody have something that’s useful and available? I don’t know. I always have my ear to the ground to see if anybody else has anything like that, because if so, I’m going to knock on their door and ask for a tour. I want to see it.