This article first appeared in the 2013 Industrial Distribution January/February issue. You can view it here.
As many of you may recall, January of 2012 was the premier of the ID Big 50 Watch List—an effort we developed in order to shine a light on a different kind of distributor. It may not be as long of a list as The Big 50. It may not hone in on companies of a certain size, or those that fall strictly within the MRO wheelhouse. But what it does do is focus around the “ones to watch” —as in, companies that are making some noise out there and aren’t afraid to talk about it.
This series of short profiles offers ID readers an inside look at the competitive playing field. These are not your typical “Big 50” companies, but you might be interested in – and a little surprised by – what they bring to the table.
Headquarters: Houston, TX
Core Products: HVACR
Founded in 1953, Johnson Supply has grown to become one of the leading HVACR wholesale distributors in Texas and Louisiana. Now with 23 locations and 250 employees, the company strives to continue that success. Major equipment lines include the likes of York, Bard, Mitsubishi, Friedrich, and Reznor.
Richard Cook, President and COO, describes several internal initiatives that he sees driving the company’s continued growth, including it’s strong emphasis on employee recruiting and training, particularly with integrating young people into the business. Other important elements include:
• Using IT as “a competitive weapon.”
• Aligning with the Texas A&M Industrial Distribution program as a way to improve it’s business processes through the identification of best practices.
• A continued effort to quantify business processes - specifically, “applying the ‘science’ part of the ‘art and science of distribution,’” explains Cook.
It’s clear these initiatives are designed to support it’s corporate values, which include tenets such as “Passion for service excellence” and “Encouragement of innovative solutions for our customers.”
“The Employee Owners of Johnson Supply are committed to providing our Texas and Western Louisiana customers with excellent services, quality products, and real solutions to persistent HVACR repair and installation challenges,” says the company. “The reward of these efforts will be our customer’s loyalty.” And Johnson Supply’s employees are also rewarded—with an ESOP program, supported by a strong succession plan to ensure the employee owners remain on the right track.
For more information, visit www.johnsonsupply.com.
Industrial Supply Company
Headquarters: Salt Lake City, UT
Core Products: MRO, safety, chemicals, finishing, and more
“We are proud to be a fourth generation family-owned business, committed to our employees and customers in our area,” says Jessica Polychronis, Industrial Supply Company’s VP of Sales & Marketing. “We are one to watch because we continue to grow each year and take market share from our competition. Our customers are loyal, and appreciate the service that we provide.”
This general line distributor offers many different categories of products, including safety, hand & power tools, abrasives, cutting tools, maintenance and janitorial products, and construction supplies. Industrial Supply Company has 160 employees, and branches in Wyoming, Nevada, and Utah, with a footprint in end markets such as mining, aerospace & defense, oil & gas, construction, and government.
Industrial Supply Company has spent the year giving serious focus to its B2B website, “adding value for our customers with a site made specifically for each of them,” explains Polychronis.
Perhaps the aforementioned customer loyalty is a result of Industrial Supply’s ability to create specific, tailor-made programs for their customers based on need. “Our key initiative is to ensure that our people are trained and responsive to the needs of the customers, and nimble enough to tailor programs to each one. No two programs are alike,” she says. “Our people are our differentiator, with an average tenure of 17 years. Despite technology, people still do business with people they trust, and that makes us different and special in our own way.”
Historically, the foundation for Industrial Supply was laid in 1916. Since then, the company’s fundamental commitment has been to
understand its customers’ business and to deliver customized solutions where and when they are required. “Ninety-seven years later we still call this customer service,” says Polychronis.
Since 1916 the company has helped its customers fight and win a war in Europe and the South Pacific, make steel, produce
and supply energy and power, build refineries, smelters and power plants, put men into space, mine minerals, and help hundreds
of plants and shops of all sizes, all while surviving and thriving during each of the recessions encountered since it’s been incorporated.
Solutions range from staffing and operating job-site trailers (open 24/7) and bar-coding customers’ warehouses, to creating customized web-based digital solutions to meet each individual requirement, where and when they are needed.
“We understand that as the value chain decomposes, removing all unnecessary costs is fundamental to our future,” says Polychronis. “We see technology, innovation, and speed as unique customer-centric competitive weapons. Each is uniquely developed to take cost out of the supply chain. These fundamental parts to our business will be the key to our success moving into our fourth generation of family leadership.”
For more information, visit www.indsupply.com.
Headquarters: West Hartford, CT
Core Products: Concrete, forming, rebar, tools
A.H. Harris started out in 1916 as a small, family-owned and operated trucking company. Now, A.H. Harris is a company that distributes products to the heavy & highway, commercial, industrial, and residential markets with special focus on forming, sitework, and concrete repair and restoration. Today the company boasts 43 locations, from Maine to Florida, and 465 employees. Harris has two full service rebar fabrication facilities and, additionally, several Harris DCs provide rebar fabrication quickly for small projects.
Harris took a unique approach to the recession years, and company Director of Marketing, Sally Harris, cites a strategy some might consider unorthodox: “During the lean times, we took an opposite approach of (most) distributors; we beefed up inventory and invested in our associates with education.” These decisions have paid off, as Harris’s 2012 year put them back to “our high water mark of 2008,” says Harris. In addition, the company completed a strategic acquisition this past year of one of its key competitors.
The Harris Advantage, according to the company, is what’s behind some of the following valuable services:
• Supplies and materials ready for distribution to any site.
• Local, conveniently located Harris stores offering a comprehensive selection of tools and equipment under one roof.
• One of the industry’s largest trucking fleets, delivering project requirements without delay.
• CAD capabilities to create precise, accurate presentations by Harris engineers.
• Harris account managers’ ability to provide in-depth product knowledge, on the job assistance, and application advice.
• Harris inside sales’ ability to solve problems and answer questions by providing customers up-to-date advice on product usage, availability, and options.
“We distinguish ourselves with innovation and dedication; even in a weak economy, AH Harris chose to develop and manufacture Harris 1500, a state of the art lightweight clamp system,” says Kimberly Corwin, A.H. Harris President. “We are constantly looking for ways to improve our customer service by providing our associates with training and education. The result is some of the most experienced and knowledgeable individuals in the industry today.”
For more information, visit www.ahharris.com.
Alaska Industrial Hardware
Headquarters: Anchorage, AK
Core Products: Adhesives, construction, fasteners, hand tools, safety, and more
Alaska Industrial Hardware (AIH) was founded in 1959, from modest beginnings with a simple plan—buy surplus nuts and bolts and repackage them for resale. The new company was headquartered in a one-story, one-bedroom house on Fireweed Lane in Anchorage. In time, the demand for hardware soon outgrew the original idea and it wasn’t long before AIH started handling new goods instead of surplus items.
Presently, with eight locations throughout Alaska, AIH provides quality goods and services at competitive prices, with a complete selection of hand and power tools, builder’s hardware, contractor’s and industrial supplies, maintenance, and safety products. Stores range in size from 20,000 to 53,000 square feet.
A $15 million inventory ensures ample supplies when any need arises, whether it be a single hammer or 1,000 shovels. With more than 20,000 different items in stock, AIH has something for everyone’s hardware needs—from a rig operator in Prudhoe Bay to the do-it-yourselfer. “Large, on-hand inventory at all times makes us the dominant supplier for all of Alaska—even with Grainger, Fastenal, and 12 Home Depots and Lowes in Alaska,” says Mike Kangas, President and General Manager of Alaska Industrial Hardware Inc. “We maintain a distribution network that, if superimposed on the 48 contiguous states, spans from California to Florida and Wisconsin to Texas.”
Over the last several years, AIH has remodeled or expanded seven of its locations throughout Alaska, including the 100,000 square foot Anchorage Distribution Center, to accommodate increasing sales and additional stock. The most notable of the recent expansions includes the 53,000 square foot flagship store on Old Seward Highway in April of 2012. The new store is nearly twice the size of the former store. This new facility was built with 100 percent Alaskan labor, 95 percent “Buy America” goods, and incorporates the latest in sustainable energy designs. In addition, AIH completely remediated a former four acre salvage yard that was a community eyesore. The power tool department is a store within a store with almost 12,000 square feet of tools and machinery. Other expanded departments include Safety, Outerwear, Jan/San, and Material Handing.
“After 53 years of supplying Alaska with tools and hardware, AIH is still Alaskan, through and through,” says Kangas. “Like Alaska, over the years, AIH has weathered the tough times and prospered in the good ones.”
For more information, visit www.aihalaska.com.
Headquarters: Cleveland, OH
Core Products: Abrasives, material handling, metals, MRO, pipe, safety, tools, and more
3B Supply is not the kind of company you’d see on the Fortune 500 List, but they’ve made this one because of the substantial growth the company has seen—posting 50 percent gains each of the past three years.
This growth came, according to general manager Leonard Bashkin, “mostly organically, with little acquisitions. In 2013 we are looking to make two to three strategic small acquisitions of distributors who are owned by upcoming retirees (i.e. people wanting out), and will grow their revenues to existing companies using our integrated model.”
So if you haven’t heard of this company yet, you might want to pay attention.
This Ohio-based integrated supplier represents thousands of manufacturers in areas such as PT, welding, chemicals, abrasives, material handling, and many more.
“We specialize only in manufacturing companies of 30+ employees and put on-site management teams at no cost, and guarantee savings in writing or write them a check for the difference,” says Bashkin. “Typically, we guarantee $100K. We have never written a check.” Customer savings drives the 3B business model, and the company is proud to say it strives to save its customers money to demonstrate its own value as a supplier, rather than get the customer to spend more. The customers have paid 3B back with their loyalty. “First and foremost, we truly take care of the customers we have and add new ones. The last time we lost a single customer was 2008—over 4 years and counting,” says Bashkin.
Other reasons 3B thinks it’s customers stick around is because of the custom reports and analytics the company provides. As part of a standard monthly review, 3B presents reports specific to each customer, which include:
• Fully itemized product data.
• Savings reports.
• Spend variance analysis.
• Machine usage reports.
• Inventory right sizing.
• Employee accountability.
• Predictive vs. reactive ordering.
• Scrap reports.
• Warranty tracking and processing.
Says Bashkin: “Customers are often puzzled with how we can offer a ‘Nordstrom’-type of high service and charge a ‘Wal-Mart’-type of low price. Most of them have never even heard of a company like this, let alone were able to imagine our offering something their companies could qualify for. They frequently ask how we can even make money, but the reality is, by eliminating non-value added internal costs and activities, and focusing on a very specific market segment, you can offer the too-good-to-be-true proposition and be very profitable at it.”
For more information, visit www.3bsupply.com.