Ahead of their class

At Western States Tool & Supply Corp., 'old school' service means never saying no to customers' requests and anticipating their needs

By Ken Brack -- Industrial Distribution, 7/1/1998

The two men formed Western States Tool & Supply Corp. in Hayward, Calif. 12 years ago with a clear vision to provide fast service to mechanical contractors and other customers. While larger, commodity-focused distributors have risen and fallen on the West Coast, Rader and Talbot haven't strayed from their formula of "doing whatever it takes.''

Whether it's round-the-clock deliveries, driving hours out of the way to locate a small tool order, or checking proactively on the needs of contractors as jobs progress, Western States earns accolades -- and repeat business -- from thankful customers.

The two owners and their 12 employees execute the strategy well. With nearly $5 million in sales last year, Western States is profitable both to Rader, Talbot and employees. While not disclosing exact numbers, Talbot says profits have been "very consistent'' and employees who work odd hours to assist with a job regularly receive bonuses. Sales revenues increased by only one percent last year, but Talbot says a key to the firm's prosperity is careful purchasing -- which he credits Rader as "being a master at.''

Meanwhile, the company's reputation among local and out-of-state contractors continues to grow. Crews working in plants as far away as Puerto Rico and Montana don't hesitate to call them for next-day deliveries.

"They're ahead of the class when it comes to providing service,'' says Manly Ormsby, equipment manager at Pacific Mechanical Corp. in Concord, Calif., a large mechanical contractor. "They understand the needs of the individuals in the field. They're just people you can count on. They say they're going to deliver and there's never been an instance where they haven't."

Unique breed

Being located on the outskirts of vibrant Silicon Valley certainly helped Western States Tool & Supply take off when the region's economy revved up in the early 90s. Construction is booming with large projects, such as airport expansions, underway or planned in several cities. Location isn't the prime reason for the distributor's success, though. Rader and Talbot focused from the start on serving metalworking contractors that do planned maintenance at industrial processing and power generation plants and work on projects from water treatment facilities to hotel construction. Both owners knew from their experience in manufacturing and distribution that those contractors have unique needs.

First, the contractors' tool and supply demands change quickly according to the pace of jobs, with snags and adjustments the norm rather than the exception. Many crews work weekends and at night, so typical warehouse schedules are irrelevant to them. And while tools make up a tiny portion of a project's budget compared to labor and material costs -- and sometimes receive scant attention from foremen -- lost time waiting for tools can make or break a job. In short, these customers require rapid and relentless service.

"We thought there should still be a place for someone who wanted to supply tools and equipment at a job site on a quick and timely basis. We're still doing the same thing we did 12 years ago," says Rader, noting that supplying planned maintenance projects now accounts for about 20 percent of revenues.

Employees respond quickly and anticipate customers' needs in a variety of ways. Customers receive home telephone numbers of the two owners or key employees, and all make free late-night deliveries at a moment's call. Talbot and Rader stay in close contact with contractors at job sites to prepare tools they may need next. Talbot even makes regular Thursday-Friday rounds to check for supplies that may be required -- and unavailable elsewhere -- during the weekend. "It's overall service we sell rather than products,'' says Rader, who is 55.

My old school

Some distributors only perform lip synch when it comes to providing service. Western States' customers can't say enough about the help they receive.

"What I like about them, it's kind of like the old school...they go above and beyond the call of duty,'' says Steve Campos, shop foreman for Pacific Erectors Inc. in Hayward, Calif., which has purchased supplies from Western States for about 10 years. "They'll also stock everything I need. I don't ever go there and say I need this type of goggle or hard hat.''

"It would be nice if American industry would model themselves after Western States," Ormsby adds. "We would probably get a smoother flow throughout the entire world.''

Both Talbot and Rader knew which niche to fill when they launched the company. In the mid-1980s both men worked for a distributor that had moved away from its quick turnaround-flexible service approach and began charging for those services. Rader had nearly 25 years experience at the time, starting with a major welding equipment manufacturer. Talbot, 44, began working at a distributor's warehouse filling orders and driving trucks while still in college and later moved into sales. At the company where he met Rader, Talbot oversaw special projects and did outside sales during his last few years there.

Starting out on their own with little inventory, Rader and Talbot's first key customers included contractors such as steel erector-fabricators. They targeted other industrial contractors rather than trying to compete with general-line tool houses, moving into hoses, lifting and moving equipment, chemicals and diamond cutting tools, for example.

"We built our inventory around specific types of accounts rather than (trying to) be all things to all people," Rader says. Hoses, couplings and accessories now make up about 20 percent of revenues, and the firm supplies an array of products from air hydraulic and electric tools to welding, abrasives, electrical products and general supplies.

But both owners believe staying specialized is a key to their future. "It seems the way business is going today, you need to have more and more specified activities to maintain the base you have and hopefully gain new customers,'' says Talbot, who served as president of the National Assn. of Hose and Accessories Distributors last year. "The gamut in that is very wide.''

"We've never been accused of being the low-price leader in town so we must have services that are worth it,'' Rader says. Campos and others, however, say Western States' prices are competitive -- and when their pricing is a little higher, it's well worth it.

Marv Robinson, a rigging loft superintendent with The Herrick Corp., says the distributor's hustle has helped avert crises when crews ran out of a specialty tool or piece of equipment. Herrick is one of the largest steel erectors and fabricators on the West Coast, and its superintendents don't hesitate to call whether they're laying beams for a Los Angeles high rise or framing a hotel in Las Vegas.

"They have it most of the time, they have good inventory of things we use," says Robinson. "I can get it better from them than locally with next-day UPS...It's kind of one-stop shopping. I'll say when can I get it and I'll call Ralph (Rader). If he doesn't have it, he'll get it. He's amazing.''

"They'll send a truck out with $10 worth of things if need be, knowing that next time it may be a $500 order,'' Robinson says. For example, while building the new international terminal at San Francisco's airport during the past year, Herrick Corp. workers relied on the distributor for everything from air hose to welding leads and 40-foot ladders. Even though the drive from Hayward to the airport can take up to two hours, someone from Western States arrives at the job every day.

"The service is huge,'' he says. "If we have a crew that's standing around out there'' big dollars would be lost.

The icemen delivereth

Talbot and Rader don't hesitate going to extremes for a customer, even when the request has nothing to do with a tool or part.

Several years ago, for example, a contractor doing planned maintenance at a nearby oil refinery called Talbot at home one Sunday mid-summer morning asking for 1,500 pounds of ice. His crew was working inside an extremely hot vessel during the shutdown and needed to cool off. The plant's ice locker supplier did not make Sunday deliveries and there was no more ice.

"I said I don't have any sources off the top of my head but would check,'' Talbot remembers. "As luck would have it there was a service station a mile from my house with an ice locker filled with 50-pound bags. I had my pickup truck and within 15 minutes of the phone call I loaded about 1,200 to 1,300 pounds of ice...He had 1,400 pounds of ice [90 minutes] after asking for it. I recall my hands were numb.''

"I told the guy, 'This is probably going to be the most expensive ice you ever bought,' '' Talbot says. "He said, 'It doesn't matter; as long as we get what we need.' "

Of course, Talbot and Rader aren't afraid to retell that anecdote to a prospective customer. "They might remember that if you did that, you're pretty responsive," Talbot says.

Campos doesn't need to hear other contractor's stories -- he has plenty of his own. With a crew of about 90 working on high rises and other buildings up and down the coast, his company relies on the distributor for safety equipment, specialty saw blades and more.

He likes Western States because it remains small enough and retains skilled employees who know him personally and the tools he needs. He likes the convenience driving in to the warehouse with an order form, rather than standing by a computer that spits out orders. Perhaps most important, Western States anticipates his job requirements and usually stocks everything. Rader or one of his employees will also go the extra miles and stop by Pacific Erector's Hayward, Calif. shop to pick up materials like welding lead and deliver that along with an order of saw blades to a job site. The distributor even opens early enough (always 6 a.m.) for Campos' crew to make a stop when the workday begins.

Campos recalls that a few years ago Western States bailed his crews out when they had an emergency repair at a local refinery about 1 a.m. on a Saturday night. Without the proper tools, "We would've been fighting the situation for several hours," he says. "They make me look great."

Planning for El Nino

Providing inventory on consignment is another way Western States thinks ahead for its customers. Rader and Talbot agreed to try the concept early this year, and inventory such as safety supplies and rigging equipment now sits on contractors' shelves. More informally, if a contractor is about to do a lot of spray painting or welding at a job, they can purchase a case of breathing respirators. "If you've got them and get (them) out of a jam you've made a friend," Talbot says. "If they don't need it we take it back on Monday."

Months before the weather system called El Nino began dumping record rains on the West Coast, Talbot and Rader planned ahead. Last August, as forecasters made predictions for the winter and spring rains, the two checked rental yards selling pumps and other gear for the stocks of hose and accessories available. They placed huge orders not only for hose but rain suits and rubber boots, including unusually large sizes for burly workers. Talbot recalls that El Nino didn't set in for a few months "so we wondered about the error of our ways. During the winter Ralph told me for about the fifth time: 'We're placing our last order for coats and boots.' "

The storms did come, of course, and Western States had ample supplies. Once again, Rader that was vital for customers. "It's not a question of days or weeks to get it. It's a question of hours," he says.

Looking ahead, Rader and Talbot plan to hire a few more salespeople this year. The consolidation of contractor-supplying distributors led by White Cap Industries, Inc., another California-based company, may actually provide some opportunities to find more quality people, they believe. Of course, any prospective employees will be told that late night calls -- and resulting benefits -- come with the job.

"It's not real glamorous, it's (often) lousy, dirty, crummy work. But there's a lot of potential in it," Rader says. I

COMPANY SNAPSHOT

Western States Tool & Supply Corp.

Headquarters: Hayward., Calif.

Founded: 1986

Locations: 1

1997 Sales: $4.9 million

Primary products: Personal protective gear, power tools, hose and accessories