Staying POWER

Family-owned welding distributor J.A. Cunningham has proven its staying power to its local community and to its customers and suppliers

By -- Industrial Distribution, 6/1/2000

J.A. Cunningham has spent all of its 54 years operating from its original location on Trenton Avenue in the heart of Philadelphia, choosing to expand by acquiring contiguous property rather than going in search of greener pastures. President Paul Cunningham attributes the firm's staying power to "the perseverance principle." That same principle has enabled this family-owned welding equipment and supplies distributorship to not only survive but thrive in today's competitive marketplace.

J.A. Cunningham was founded in 1946 by Cunningham's father, Joseph A. Cunningham. Its original 5,000 square feet now encompasses 60,000 square feet. The company's three locations-Philadelphia, York, and Allentown, Pa.-each feature a retail showroom. The distribution firm also operates a division called the Weldsale Company. Weldsale manufactures welding platens, machined cast iron welding surfaces that assure a flat working surface, which complement the distribution firm's product mix of welding equipment and supplies.

Paul Cunningham's brothers, Clete and Tom, manage Weldsale International and the compressed gases distribution portions of the business, respectively.

It would have been easy for J.A. Cunningham to justify moving out of Philadelphia in search of a better tax bracket, as so many industrial companies have done over the years. But Cunningham says a commitment to the surrounding community is one of the company's defining characteristics.

"It was important to us to stay in this location in terms of supporting the original community from which we gathered our roots. We own two city blocks in one direction and one city block in the other direction. The neighborhood's been good to us in terms of the availability of contiguous space. Over the years we'd purchase space before it was necessary and then grow into it," Cunningham says.

A new member of I.D.A., Cunningham says his interest in joining the organization was to learn more about critical industry issues like integrated supply, to network with associates, and to gain a greater understanding of technology.

Commitment to community is only one defining characteristic of this new I.D.A. member. The company also has worked hard to establish strong relationships with suppliers and customers, demonstrates its commitment to growth every day, and boasts a technically proficient staff with low turnover rates.

Strong customer relationships

Bill Vant, plant superintendent for Beaumont Birch Co., a manufacturer of bulk material handling equipment in Pennsauken, N.J., has been buying welding equipment and supplies from J.A. Cunningham for more than 10 years.

Vant says he'd rather buy welding equipment from a specialty distributor like J.A. Cunningham because most of the larger, broad-line national companies carry only a limited line of welding equipment and supplies. And the reason he buys from J.A. Cunningham, he says, is simple:

"Basically, they're a good welding distributor. Their pricing is competitive, their sales reps provide good service on the welding equipment and handling welding-related questions. They're helpful in terms of getting you in touch with manufacturing people and finding answers for you when you run into the occasional unusual question," Vant says.

J.A. Cunningham provides a wide variety of services to its customers. The company offers vendor-managed inventory and operates a comprehensive service department staffed by three full-time technicians. J.A. Cunningham is also a warranty repair facility for most major welding equipment manufacturers, offering repair service at their facility or on-site at a customer's facility. In addition, the company offers customers additional cost savings by selling used equipment it refurbishes on-site.

"We take used equipment in on trade and we do a significant business with used equipment. That's pretty unusual," says Dick Hughes, general manager. "We bring it in, refurbish it and clean it up until it's serviceable. Then we'll resell it and we'll put a warranty on it depending on its age and condition. We also have an extensive rental fleet and an extensive inventory of hard goods and welding wires."

Beyond offering a wide range of welding products and related services, the company's employees are committed to going the extra mile to service their customers on a just-in-time basis. It's not unusual, Hughes says, for J.A. Cunningham employees to come in at odd hours on weekends to open the warehouse for a customer with a last-minute need.

"Those kinds of things are happening all the time, more often than you wish they would perhaps, but they do give you the chance to prove you do bring a little more to the party than the next person," Hughes says. "Everyone today expects just-in-time services and end users, for whatever reason, will let their inventories run lower than they should. Maybe they think they have enough and then all of the sudden there's not enough for today. If they don't have welding wire, they can have all the welders and machines in the world and it won't do them any good."

The supplier connection

As with other product segments of the industrial distribution industry, long-established relationships between manufacturers and distributors are being challenged by today's fast-paced changes in technology, consolidation, the trend toward integrated supply and more.

Though it's a tumultuous time for manufacturers and distributors alike, Philip Plotica, senior vice president of sales and marketing for ESAB-a manufacturer and supplier of welding and cutting equipment, filler metals and technology-says the relationship between independent distributors like J.A. Cunningham and manufacturers is still vital to the industry.

"We have a lot of respect for the large national organizations that we do business with, but we also like to see the localized family business survive and J.A. Cunningham is a good example of that. We think that adds strength to our industry," Plotica says.

"The local independent distributor is a very important part of our marketing mix. In order to stay in business today, the local distributor has to be able to do a lot more value-added selling in order to compete," Plotica says. "And those local distributors that have survived tend to be the most proficient ones at doing that. They are oftentimes some of the most technically proficient. They've really had to be to stay in business.

"That's certainly true of J.A. Cunningham," Plotica says. "He competes against large national distributor organizations and the only way he can keep his business going is by providing service and products to his customers that they're willing, in many cases, to pay a premium for getting because of the value that he adds."

Cunningham says the company works hard to maintain some select distribution lines to help differentiate J.A. Cunningham from its competitors, and the company also offers its own brand of private-label consumables under the name of Weldsale.

Hughes brings a unique perspective on the manufacturer-distributor relationship to J.A. Cunningham. He retired after 31 years working on the manufacturing side of the industry-primarily for Union Carbide-and quickly decided that retirement didn't suit him and went to work for J.A. Cunningham.

From the manufacturing side, Hughes watched the opportunity for limited distribution erode with the momentum of mergers and acquisitions in the industry.

"The role of the manufacturer changed and he really had few choices. Suddenly all these additional distributors were put on his plate. But I wouldn't be surprised if that starts to change as manufacturers try to align themselves with distributors who will promote their products preferentially. I think we're beginning to sense a little bit of that," Hughes says. "We're pretty committed to our major suppliers, and they know that."

Technically savvy sales

The not-so-secret weapon behind J.A. Cunningham's steady success is the longevity of its staff and the product and industry knowledge the staff has accumulated over time.

The average J.A. Cunningham employee has been with the company for over 17 years, Cunningham says, adding that tenure is particularly important when it comes to his sales staff.

"The average salesman falls into that same category. Fifteen-year veteran salesmen are very common here. So over that time, we do an extraordinary amount of training for our outside and inside sales forces," Cunningham says. "Because when the end user makes a decision as to who he's going to buy from, he'll usually pick whoever he feels has the most integrity, trustworthiness, and the most technical product knowledge. We have been able to beat out other large distributors that have a higher turnover of people and are able, effectively, to do less training with their people."

The company's commitment to training and their focus on equipment, versus supplies, is important to Hoyt Fitzsimmons, executive vice president of Thermal Dynamics. J.A. Cunningham is a full-line distributor for Thermal Dynamics, a division of Thermodyne, which manufactures plasma cutting systems for manual or automated cutting needs.

"The plasma arc cutting system is, to a great extent, a technology sale. It's a better way to cut metal than the traditional ways and even some higher technology alternatives like laser. The real challenge is for a salesperson to be able to identify applications well-suited for plasma arc cutting and then to sell that to the end user as a solution to his problem," Fitzsimmons says. "Cunningham has a very good, well-trained sales force. A big part of the success in selling plasma arc cutting equipment is the person's ability to demonstrate it. It's a real hands-on selling product and [Cunningham's salespeople] have always been really good at that.... They are one of our top distributors."

The strength of J.A. Cunningham's sales staff has not gone unnoticed by ESAB either.

"They have a well-trained sales organization," Plotica says. "They're aggressive, knowledgeable. They're located not too far from one of our main training facilities and they have had their people come to our facility for product training. That enables them to do a better job in the applications engineering of welding products. We feel they can do a good job because they understand the technical aspects of welding products."

This article was reprinted from Industrial Distribution's spring 2000 ASMMA/I.D.A. convention guide.

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