No coasting along
Coastwide Laboratories breaks new ground in the Northwest by developing chemical products, training programs and JIT inventory solutions
By Ken Brack -- Industrial Distribution, 9/1/1999
In 1998 Intel Corp. banned the use of glycol ether-based cleaning agents at its chip-making plants due to health concerns for pregnant women and other workers. Roger McFadden, chief chemist and technical director for one of Intel's suppliers, Paulsen and Roles Laboratories, took the decree as a challenge to find another cleaning product.Unlike most janitorial supply distributorships, McFadden's company was well equipped to address the problem itself.
Paulsen and Roles -- which became known as Coastwide Laboratories after a merger last year -- has developed scores of cleaning chemicals to help industrial, institutional end users and contractors deal with environmental health and safety concerns. In the Intel case, McFadden and his staff developed and produced a new cleaning agent in three months, which maintenance workers said worked as well or better than the glycol ether-based products.
"We looked at it and said it would be hard to do, and we went and fixed it up for them," he recalls. "Those are the kinds of things that most jan-san distributors don't do."
Having a research and manufacturing capability is just one of the reasons why Coastwide Laboratories is a growing force in the Northwest janitorial supplies market. It formed in April 1998 with the merger of Portland, Oreg.-based Paulsen and Roles with Coast Wide Supply of Seattle. Sales are expected to grow from $35 million to at least $38 million this year.
In August Coastwide acquired another firm, Alpha & Omega in Olympia, Wash. Coastwide president Grant Watkinson expects to expand further with more acquisitions, which may include moves beyond the company's current operations in Washington, Oregon and northern California.
Other services Coastwide provides help it stand out among large national distributors. Among those is a just-in-time stockless purchasing program, which takes over warehousing, delivery, order processing and usage reports for janitorial, safety and waste management supply needs.
Coastwide also provides numerous workshops for customers on issues like improving indoor air quality and the science of hard floor care. And this fall it will offer a facilities training program that enables custodians to train at their own pace and give managers the tools to track employees' progress at multiple sites.
"We intend to be a dominant regional player," says Watkinson. "We have a few things we do very well. We know chemistry and chemicals ... we're getting much better at the repair business, which is critical. And by virtue of our manufacturing we have the technical expertise to take care of a customer's unique needs."
"These guys really take it to a different level," says Ken Linde, vice president of sales at SBM Cleaning, a contractor based in Corvallis, Oreg., that is active in states from Colorado to California.
Linde says Coastwide is an expert in providing "stockless" JIT inventory, which is particularly important for many of his firm's high-tech customers that don't want a lot of space used up by janitorial supplies.
"They've really set the standards in that," he says. "For professionalism to their sales staff to the accuracy of invoicing, across the board they're superior to other suppliers we use in other markets."
P&R origins
Paulsen & Roles began manufacturing cleaning chemicals in 1937 and was purchased by Watkinson and his partner, vice president of marketing John Martilla, in 1977. During the next decade it grew to six locations and retained its manufacturing and distribution operations as a single entity. With two full-time chemists, Paulsen & Roles has developed nearly 110 products, many of which are acrylic floor coatings including floor finishes and sealers for concrete, vinyl and hard finish tiles. Other products include disinfectants and sanitizers for hospitals and health care facilities.
Watkinson says he and Martilla talked with owners at Coast Wide Supply for several years until internal developments at Coast Wide Supply made a deal viable in 1998. Both firms had about $17 million in revenue at the time. To do the transaction, Coast Wide's shareholders became shareholders of Paulsen and Roles, and then the corporate name was changed to Coastwide Laboratories.
In this case, "bigger is better," says Watkinson. "It's given us a stronger platform. We're clearly within the top 10 independents of our industry."
He says the merger has allowed the company -- which has 42 outside salespeople and 148 employees -- to take care of and expand its multi-site accounts. "We've picked up business because of that. It's helped with some important accounts," he says.
Counting the Alpha & Omega purchase, Coastwide has 11 stores and distribution centers in Seattle, Wilsonville (outside of Portland), Oreg., and Medford, Oreg. The Wilsonville facility will total 51,000 square feet when office space is completed next year in addition to the warehouse.
New initiatives
Among Coastwide's most recent initiatives are a management report called Facilities Analysis and Supply Tracking, the introduction of "ultra low odor" floor care products and a customized custodial-housekeeping training program.
Set for implementation this fall, the training program enables custodians to learn technical skills online and allows managers to verify their progress in real time.
Earlier this summer Coastwide was preparing to conduct a needs analysis of a Seattle hospital, film the facility and develop customized training procedures. Once completed, training materials will be available on CD-ROM, while software will track employees' training hours, issue tests and track their performance, allowing managers to check on custodians at multiple sites.
McFadden says he convinced Watkinson and others on the idea after several key customers showed an interest -- and told him that price was not a primary issue. The training will likely be sold and made part of the firm's single-source contracts.
"It's important from an efficiency standpoint for facilities managers to know how they're [custodians] doing their jobs," says McFadden.
Jim McGowan, physical plant director for the Albany, Oreg., school district, can't wait to implement the training program for about 40 employees who take care of 24 buildings.
"I've been hounding them about that, it will really be beneficial," he says. "It will allow us to save a lot of money and time in the training process ... it's a user friendly way to do training and it can be site specific through the software."
The training initiative is indicative of Coastwide's strategy to develop products and services from the end user's perspective. The firm has hired a full-time media specialist to oversee production of the materials.
"I work with Intel, Nike, Boeing -- big corporations that have complex issues and processes don't always know how to solve them internally," says McFadden. "Having scientists on our staff who know how to get into those situations and help has given us a big advantage. Providing technical expertise was a vision we had early on as a way to set ourselves apart."
In another example, chemists at the firm developed "ultra low odor" floor care products in response to customer complaints about odors.
Besides developing their own chemical formulas, in several instances Coastwide's expertise with chemicals has made cleaning contractor SBM look better to its customers, Linde says.
In one case, a Hewlett-Packard plant in Oregon shut down a 'clean' room that SBM services and at first blamed the vendor for some chemical odor problems. Linde asked McFadden to determine the source of the odors. He did so, and eventually plant supervisors determined the source of the problem was somewhere else.
"Initially they put the finger at us hard," says Linde. "He came in and explained the issues and showed how the chemical mix (first blamed) couldn't have done it."
Taking ownership
Even in a market where many distributors see their margins shrinking as national competitors grow, Watkinson is convinced that Coastwide's future is bright. His competition includes W.W. Grainger, Unisource and Sysco Foods, which Watkinson acknowledges have taken a share of the Northwest's sanitary-janitorial supplies market. He realizes that some customers, whether in manufacturing plants or school maintenance staffs, will buy cleaning supplies based on price only.
"We will lose some business there, most everybody will because it tends to be price focused," says Watkinson. "We just differentiate ourselves by providing service that they need and others are not capable of or interested in supplying."
McGowan agrees, saying Coastwide's JIT stockless program saves his school district significant dollars. Albany turned to the distributor after budget woes forced it to close a warehouse. Besides managing cleaning and paper products, Coastwide provides regular product training and installed dispensing stations in custodial closets, which McGowan says reduced product use and improved safety.
"The bottom line perception of the whole relationship is they have partnered with us and pretty much taken ownership of what goes on with our custodial practices," he says. "If there is a problem, they have ownership and they deal with it."
"The landscape is dynamic and changing almost daily," says Watkinson. "To me there's just an enormous opportunity to grow our business today with all of the competition ... The distribution game is really quite simple. It boils down to having a team of talented and committed people who have a near singular passion for identifying and responding to customer needs."
COMPANY SNAPSHOT
Coastwide Laboratories
President: Grant Watkinson
Headquarters: Portland, Oreg.
Founded: 1937
Locations: 10
1998 Sales: $35 million
Primary products: Full line of janitorial supplies; manufacturer of industrial and commercial cleaning chemicals, wax strippers, finishers, sealers and restorers, disinfectant cleaners.
Web site: www.coastwidelabs.com
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