Inside Supply Technologies' $50M Investment in the Future

Vesna Brajkovic: Well, that's a wrap on this episode of the MDM podcast. Brian, thank you again for joining us and walking us through both the strategy behind this large investment and what it takes to execute a transformation quite like this one. And thank you all for listening to Welcome to the MDM Podcast. I'm Vesna Brajkovic and your host for today's episode.

Over the past few years, we've seen distributors rethinking their networks, not just to handle disruption, but to manage fragmented operations, rising costs to serve and increasing pressure for visibility and speed. welcome Brian Norris to the MDM podcast. BRIAN W. NORRIS: Thanks, Vesna.

excited to be here today with you and ⁓ a little bit about supply technologies. Vesna Brajkovic: you've been in this role for ⁓ four and a half years now. You in ⁓ a time during the pandemic, managed through supply chain chaos and then demand volatility, you you name it. And now ⁓ we're that you're making the biggest infrastructure bet in the company's history, really.

⁓ What those first few years tell you ⁓ that you that right now is the right time ⁓ to to this and make this huge investment? the MDM podcast. For more insights on distribution strategy, technology, and market trends, ⁓ be sure to visit mdm.com where you can subscribe to our free email newsletter.

See you in the next one. We're starting to see some of those responses take shape in the form of larger, more centralized and more automated distribution models. One example is Supply Technologies, which is augmenting its network of more than 70 warehouses with a new 375,000 square foot distribution center in Union, Ohio, designed to support a more centralized tech enabled hub and spoke model with investments in automation and advanced warehouse systems and engineering capabilities.

And that's what we're unpacking today. BRIAN W. NORRIS: Yeah, it definitely was a challenge when I first came in 21, 22, 23. But I think it's a couple things.

First one, just learning the business. It took me some time to learn the business and that is, you know, sitting with our employees and seeing them do their jobs, whether that would be our buyers, our people in our warehouses, our customer service folks. But I sat alongside them and saw how they did their jobs. Vesna Brajkovic: I'm joined by Brian Norris, president of Supply Technologies, a subsidiary of Park Ohio that serves industrial OEM customers with standardengineeredassembly components.

Brian, no stranger to take on a challenge, stepped into the head roll in 2021 and has spent the last four years navigating supply disruption, demand volatility, and a business built through decades of acquisitions. Now he's spearheading a 50 million plus investment in the future. BRIAN W. NORRIS: The second thing was just getting out and seeing customers.

did a lot of manufacturing line sidewalks and understanding how we serve during very challenging time, as you pointed after doing those two things, ⁓ and again, this is business was built up over last 30 years by 24 acquisitions. And so a lot of capital was spent ⁓ on ⁓ buying companies and building this Vesna Brajkovic: So today we're talking about why now, what drove this investment, what is actually changing operationally and how the company is positioning itself as its end markets continue to shift.

BRIAN W. NORRIS: platform of 70 plus locations in 18 countries to serve global OEMs. What we didn't spend it on was the infrastructure and some of our systems. 2025 was the year that we decided to do a couple of things.

One is really invest in our IT and our systems. So changing out our ERP. doing some stuff around our data ⁓ providing customers visibility to data and insights. And then cyber that we all have to invest ⁓ in, in around that.

And then, our network, again, 24 companies, we had a lot of locations, 46 locations around North America. And, and so Vesna Brajkovic: Right. BRIAN W. NORRIS: Having that many location makes it a challenge to invest in automation, systems, ⁓ processes are different.

So really items really us to the ⁓ point that, we had to make some changes around our ERP. We had to make some changes around our ⁓ distribution network North America. Vesna Brajkovic: And the announcement of the distribution center, the big announcement, it mentions robotic automation, advanced warehouse systems, sorting and kitting, and a quality and engineering lab. Can you get any specific about what's going on inside this building and what's different from what you operate today?

BRIAN W. NORRIS: Yeah, you know, it's exciting. Our teams are excited about it. Again, as I said, we operate 46 locations in North America.

Some of those locations are 25,000 square foot locations. Our largest one is 85,000 square feet serving local customers. And so this is a 375,000 square foot facility with another 150,000 that we can add on a later point in time. It gives us that opportunity to automate where we just haven't had that quite that opportunity in the smaller facilities that we have out there.

So, it brings some new capabilities and then it automates some capabilities that we've thrown labor at. ⁓ And so how receive in some automated receiving some automated robotics moving product around. I think the kitting, we do a lot of toting, line side toting for our customers. So it allows us to automate that, or we've always had people doing that on toting lines with scales and other ways of doing it.

Now we're investing in the equipment that allows that to be automated. ⁓ And really, is probably one of the biggest things that we're investing in in this facility that allows us. to do kits for our customers, you know, anywhere up to 20 different pieces in a kit and provide that to ⁓ our customers. Vesna Brajkovic: And operationally speaking, a lot of talk of this hub and spoke framing kind of suggesting that facility in Ohio is ⁓ doing that the existing network of warehouses can't necessarily.

So what, is the gap that it's closing? BRIAN W. NORRIS: Yeah, so if you think about the 46 locations serves, you know, different customers, but it serves a lot of the same customer. So I may have a customer ⁓ has four different plants we serve out of four different locations.

And when that happens, I have to carry safety stock at each one of those locations, not having a hub and spoke system. Having a hub and spoke system allows us to have a central location where we have that we keep the safe stock, we move that product around. So that's one thing. Vesna Brajkovic: Okay.

BRIAN W. NORRIS: The second thing is we do a lot of finishing when goods come in. ⁓ It's not in ⁓ the form that the customer wants it. So we have to do plating, patching, other things like that.

I have to do that locally with local platers, local third party companies. And this allows us to consolidate that down and have one central location that manages that process us. ⁓ You know, we hired a network optimization company help us plan this out. And, you know, they took a look at how we move our product around.

And when they came back, it looked like a spaghetti diagram of all the product flying over top of each other. And it shouldn't look like that. So we gain a lot of efficiencies and allow to serve our customers better by having more straight lines of product coming in and out from our suppliers. Vesna Brajkovic: You Yeah, great analogy.

think a lot of distributors listening to this can relate to that spaghetti diagram. ⁓ And you're also, you know, mid ERP implementation. So I really want to focus on that because, you know, that's a big one in itself. That's a lot of simultaneous change, having, you know, creating this hub and spoke model plus the ERP implementation.

So I'm curious, how do you sequence a facility stand up like this at this scale? And then also this huge really systems overhaul without kind of undermining. each project working together. BRIAN W.

NORRIS: Yeah, I would say that's probably the biggest challenge. you know, you to be flexible. for example, wanted to have the new ERP system when the new DC opened up and that just wasn't in the deck of cards. to have that.

So we're going to start with our older system in that that distributes center. And and when we're ready to implement all of SAP in North America, then we will add it there. So flexibility was one piece of it. Again, I come from Fortune 500 companies, my entire career, big companies that have a lot of resources.

When you come to a little bit of a smaller company, you don't have those resources. ⁓ And doing two projects like this and a bunch of small projects as well, you just don't have the resources. So we've had to rely on ⁓ hiring external firms to help us in areas. like, like I said, we ⁓ had ⁓ Invista to help us with our distribution network and ⁓ building that And so we've had to bring in external data scientists to start crunching data.

So rely on that. But we've also brought in new roles in our organization that brought in expertise. We didn't have a PMO in the past. And so ⁓ brought in a management office and ⁓ really sure that the projects that we manage ⁓ are properly and you're not just winging it.

So we have meetings all the times making sure we're staying on task with ⁓ projects that we're working through. Vesna Brajkovic: I want to talk about also the business environment that we're seeing right now too. was watching Park Ohio's fourth quarter 2025 earnings call and two years ago, supply technologies had little revenue in AI data center space, for example, a big one that's coming up, a lot of distributors are looking at. Today, you're approaching 150 million annually.

I think that's a really remarkable shift I wanted to touch on. How are you serving that market right now and do you intend to more in the future? What is that looking like? BRIAN W.

NORRIS: Yeah, I mean, obviously, know, everybody talks about AI. think ⁓ was on a pack of bubblegum I bought the other day, right? So it's everywhere. And so at the end of the day, ⁓ when took a look at the diverse end that we served, we had bits and pieces of this.

You know, we had some electrical distribution companies that we worked with, but we took a look at the ecosphere of data centers and ⁓ AI and tried focus on that. Vesna Brajkovic: Ha BRIAN W. NORRIS: in the data centers, you you have switch gear, have cooling, you have servers, you have the energy source coming in, which is usually turbine. And so we focused on a lot of those end markets pulling that together to tell a message around how, you know, we serve that data center market.

And it allows us scale when you when you focus on an end market, it allows a lot of Vesna Brajkovic: Yeah. BRIAN W. NORRIS: consistency of different parts and pieces that we can serve our customers in that area. And as ⁓ knows, in a super growing market like data centers, there's a lot of, I would say startups or roll-ups of companies, and a lot of those startups and roll-ups don't have...

the systems and processes to do what we do. So they're looking for a partner like us to manage the supply chain for them. So that allows us to get in there and help ⁓ of these ⁓ startup roll-up ⁓ companies in this space. it is a growing out there and still a lot more opportunity, but that's how we've kind of focused on it.

⁓ and thought about what end markets we really want to go after. Vesna Brajkovic: looking back to 2025 too, it was a year where we saw power sports, heavy duty truck, industrial equipment, down while that data center, semiconductors, aerospace, we're kind of holding, holding things up. So how are you operating through that split of your markets where essentially maybe, we can think about it as half the end markets are contracting versus half are surging. BRIAN W.

NORRIS: Yeah, I would say the hardest part about that. I mean, it's great, right? You wanted a highly diverse end markets. So while some are up, some are down.

And, you know, we've been able to weather the storm on some of the end markets being down over the last four years because some markets were up. I think the biggest challenge for us is more of the volatility. It's not that, you know, an end market is down. It's that did they know it was going to be down?

Because again, we get production schedules from our customers. And if they believe Vesna Brajkovic: Okay. BRIAN W. NORRIS: you know, they're going to make ⁓ amount of something, ⁓ go out and buy that material for them.

⁓ then if the volatility changes in the marketplace, then I have a lot of excess inventory, it takes up capacity in my warehouses, ⁓ it's capital that I have in the network, right. So it's more about the volatility. We've seen a lot of that over the last four years. We're actually at a point right now that even in some end markets where it's still at historically low levels, we're starting to see that rebound.

So if you take a look at agricultural market, construction market, those have been highly depressed markets, they've kind of hit rock bottom, and we're actually starting to see a recovery from end markets. But that's the volatility of having a diverse end market. That's the biggest challenge of managing that. Vesna Brajkovic: Thanks for that perspective and background.

you had mentioned that you come from history of working for some of the industrial distributors ⁓ in having all resources. So I'm curious, you 12 years at Grainger, for example, before this role. How has that background and that leadership perspective prepared you to take on this role at Supply Technologies maybe what has surprised you as well? BRIAN W.

NORRIS: Grainger is a great company ⁓ and it created a bunch of great leaders that are still there and some that have gone out and run other businesses. I one of the biggest I would say that I at Grainger is really understanding the customer. If you take a look back, when Grainger decided to break off and have full service and then endless assortment online, I mean, the genius of that wasn't either or of what their customers wanted. It was the and.

And so they built two business right? That sometimes competed with each other, but they held their ground, even though it was created some turmoil, maybe with the sales organization and other things like that. But, it was about understanding the customer, how they wanted to buy, what they wanted to buy. would say the second is data.

Grainger is a data ⁓ company. ⁓ They use data ⁓ a lot. ⁓ And so ⁓ Vesna Brajkovic: Yeah. BRIAN W.

NORRIS: coming backovertosupplytechnologies, we had incredible data. There was no way to bring it to the forefront. So, you we've invested heavily in some capabilities around Power BI, other things to make sure that we have the proper data internally for our team members, but also for our customers. And so I would say those are two of the biggest things.

What surprised me, well, You hit on earlier, it was joining a supply chain management company during a very difficult time in supply chain. It was a crash course for me when, you know, eight months into it, I was like, what did I get myself into? ⁓ So the difference is that MRO is a little different than the business we're in because ⁓ Vesna Brajkovic: Yeah. That's what I was thinking.

BRIAN W. NORRIS: If I don't serve the line, I shut down lines of manufacturing for our end customers. You really don't do a lot of that in MRO. And so, if you don't have the product and our product lead times can be 40 weeks sometimes ⁓ on product, And so ⁓ you have make sure you're buying in advance.

so when steam ships were sitting off the coast for ⁓ Vesna Brajkovic: Sure. BRIAN W. NORRIS: weeks on end, it created a significant challenge for us to serve our customers. So ⁓ was a crash course Vesna Brajkovic: Well, and now you're going into we can describe as a $50 million ⁓ investment in the company.

You know, that's including this huge distribution center, this hub and spoke model, the ERP robotics automation innovation center. I mean, you name it. We have a long list of things. What does that signal?

what are you betting on about where industrial distribution is heading that makes this the right investment for not just right now, but looking forward into the next decade? BRIAN W. NORRIS: So if you read ⁓ publications, I mean, it's all about AI and how drones are going to be able to do inventory checks ⁓ our warehouses. ⁓ we get a lot of questions from investors ⁓ about ⁓ the changing distribution of AI.

So what I say is, Vesna Brajkovic: Yup. Guilty. BRIAN W. NORRIS: we always threw people at problems, we didn't throw technology at problems.

So we've kind of changed our view of this and said, hey, we can't keep on throwing at problems, we have to invest in technology. And that technology is ERP, that technology is robotics, that technology is ⁓ other But I it taught us that... we have to have a lower cost to serve with our customers and our customers expect that. I would also say that between 2020 and 2024, it really taught our end customers that you have to have a resilient supply chain.

And so what does that mean in today's world, right? Especially in today's world, as we're talking about the geopolitical climate, you know, a lot of Vesna Brajkovic: Yeah. BRIAN W. NORRIS: People want nationalization strategies of suppliers regionalization of suppliers so I think Our end the manufacturers out there OEMs Said okay.

We to make sure we have resilient supply chains We need to make sure we have dual supply chains and for us that means that While I may still buy overseas and the cost still hasn't outweighed domestic suppliers What they want to know is that I have another supplier lined up in case something happens. So I can pull that rip cord when I need to. Not that everybody's jumping because cost is still an issue on some of our items that we still buy overseas. But at the end of the day, it's really about our customers want to make sure that if something happens tomorrow Vesna Brajkovic: Okay.

BRIAN W. NORRIS: that we have the ability to quickly pivot and have another supplier in our back pocket that can serve them and it doesn't shut them down. That is what every manufacturer out there today is worried about and has been worried about for the last four years we've been going through this challenging supply chain world that we're living in now. Vesna Brajkovic: Totally.

And just the closing thoughts, ⁓ because there's always part to the story that's not, doesn't fit neatly into the announcement of, you know, the new facility or some investments that you're making. ⁓ I want to you ⁓ what has been thing that you just wish people in the industry understood about what actually trying to build right now. BRIAN W. NORRIS: Yeah, I would say the business that we serve in the production environment, our space that serves OEM, ⁓ a hard business.

Again, the volatility, you have to stay on your toes, you have to be agile, you have to be able to move quickly. And ⁓ that a big difference between the ⁓ MRO the production space that we play in. I'm not saying that MRO distribution doesn't have the challenge of the volatility, but in our space, that volatility is exasperated, I would say. ⁓ And ⁓ so the learning for us, I everybody in our space ⁓ is how do you stay agile?

How you make sure that you reduce the lead times in the supply chain? ⁓ And, we are an ever evolving world with AI. How are you harnessing and how are you investing in AI? are a lot of people that went out of the gates and went big on it and may not have returned.

We're very focused on use cases and understanding how we want to invest in AI. But it is a changing dynamic. And I think more than ever, especially in distribution, you have to remain agile. Vesna Brajkovic: Thank you so much, Brian.

I appreciate you joining the MDM podcast and look forward to what's in store for the company this year and in following years. BRIAN W.