Fortifying the foundation at Security Plumbing & Heating Supply
In-house investments, technological advancements spur growth at Security Plumbing & Heating Supply.
One Saturday every year, Security Plumbing & Heating Supply shuts everything down for the day. No, it’s not a random vacation day for all 146 employees of the Selkirk, N.Y-based distributor; it’s quite the opposite.
Because when Security Supply puts the proverbial power back on, it will be running faster, smarter and more tech-savvy than it had when the day began.
“We spend a lot on training,” states Brian Fowler, Security Supply’s vice president of sales and marketing. “On that Saturday, we dedicate a full day of training on new products from vendors and internal technology enhancements whether it’s our operating system or various Google functions.”
Improvement in its technological standing clearly wasn’t the lone factor in Security Supply’s increased 2012 sales and appearance once again in the Supply House Times 2013 Premier 125 rankings.
Fowler notes the company installed iPads in its showrooms last year and implemented Trade Services’ Product Data Warehouse into its operating system when it converted to Kohler in 2008. Trade Services is a third-party data provider to Activant/Eclipse that promotes more efficient use of vendor data.
“It allows our people to get to a spec sheet, an image and an operating manual in just two clicks for any kind of product,” he says. “Product Data Warehouse speeds up the ease of sales. It allows us to dump an entire vendor’s SKU catalog into our system. Now our associates don’t have to manually build a part number, price and description into our systems each time they quote something we hadn’t bought before. That saves most of our field employees an hour to an hour-and-a-half per week in administrative non-selling time.”
Kim Willey, Security’s COO and vice president of operations, believes the training and technology investments give the company a big bang for its buck.
“It’s fair to say as a mid-size distributor we’ve done our best to keep ourselves on the cutting edge of technology to be competitive from both the sales support and an operations perspective,” he says.
Not running and hiding
Located near the state capital of Albany, Security Supply enjoys a wide New York reach. Its Middletown, N.Y., branch is 30 minutes outside New York City, while affiliates in Plattsburgh and Watertown are only 20 minutes from the Canadian border.
In all, Security Supply has 12 branches and seven — soon to be nine — Bath Expressions showrooms that display Kohler, Delta, Duravit, Moen, Aker, InSinkErator and ROHL lines.
Security also carries products from BrassCraft, A.O. Smith, Baxi, Eternal Water Heater, Charlotte Pipe, Uponor, Lochinvar, Weil-McLain, Webstone, Taco, Grundfos and A.Y. McDonald.
The effort Security puts into training pays big dividends. A company with long-tenured employees and low turnover, Security was able to stay aggressive during the recession and did not have layoffs or pay cuts.
“We pushed forward with our growth plans and morale remained high,” Fowler says. “Although we had lower profits, we also retained experienced employees and acquired several more people who are helping us grow.”
Fowler says 2008 was one of the company’s strongest years, while 2009 was just below 2008’s pace. The company has continued to grow every year after 2009 and since the recession didn’t impact the company as much as others in the industry, Security could make strong moves in its marketplace.
“We saw a 10-15% drop in the market,” Fowler states. “We chose to keep our marketing and advertising in place. We kept a good amount of our inventory. We were able to grab market share because we weren’t running and hiding. There weren’t raises and we weren’t spending money on this, that and the other thing, but we remained profitable.”
Willey adds, “Because of all that we were able to retain our good people.”
“There seemed to be a market opening in Middletown and it was the next logical place to go,” Fowler says. “It was within reach of our delivery trucks and we knew there wasn’t a Kohler presence there.”
Third-generation family-owned Security, which celebrates its 80th anniversary in 2014, wants all its employees to share in the company’s success. Thirty percent of Security is employee-owned through an employee stock ownership plan.
“Every employee knows they have a direct impact on our business and have a direct benefit in our success,” Fowler states. “Part of our culture is to push as much authority and decision-making ability to the branch managers and field associates as we reasonably can. This empowers our associates to act quickly in resolving customer issues and take advantage of immediate market opportunities.”
Each year, Security takes a portion of its profits and puts it back into an employee profit-sharing program. Fowler says Security Supply follows an “open book policy” where employees can request to see its financials and where all the money is going. The report is periodically shared with employees at the company’s annual Saturday training day.
While this culture has nurtured long-term and experienced employees, Security continues to be on the lookout for talented young professionals. With the company’s growth, it’s been able to attract top experienced professionals from its competitors.
“We’ve created a good place to work and we’re viewed as working fairly for our employees, customers and vendors,” Fowler says. “As our company continues to grow, we will have to develop a program to find and attract younger workers.”
Willey adds finding new talent is challenging, but certainly not impossible.
“When you’re looking for people it’s hard to go outside the industry and integrate someone into it in a reasonable amount of time,” he says. “This still is a technical, hands-on business from the branch manager to the outside salesperson.”
Fowler and Willey report 2012 was a strong year for commercial projects in the upstate New York market. The company supplied products to a wide array of projects such as hospitals, nursing homes and base housing at Fort Drum in Watertown.
“We’re seeing a lot of aging-in-place,” Willey says. “We’re finishing up the third nursing home over the last year-and-a-half and there are two or three more on the books in the area I’m aware of.”
Security also supplied products to a major new casino and to a prison in upstate New York.
“When these things come about you grab them and ride the wave,” Willey says. “It’s not like you can plan any marketing for them. You never know when those projects are going to come. We’re fortunate to have a very strong commercial sales team led by three industry veterans (Mike Mullins, Steve Marks and Chris Riley). When these projects come along they grab hold of them. They have the contacts with the mechanical contractors and engineers to allow us to partake in these jobs.”
In 2012 Security was ready to hold the line from 2011, but its calculated internal moves and increased commercial business painted a much brighter picture.
“We planned for the market to be relatively flat and determined how we were going to grow in it,” Fowler says. “We achieved our budgeted growth plan. We grew both the residential and commercial portions of our business with continued investments in our facilities, associate training, customer product training and technological sales, and order processing improvements.”
At the quarter pole of 2013, Fowler notes the year has gotten off “to a mixed start” with commercial projects below last year’s first-quarter pace, but offset by strong residential construction growth. But in an area with all four seasons, 2013 could take off at any moment.
“We never really know how strong a year it is going to be,” Fowler states. “We never know how hot it’s going to be in the summer for air conditioning or how cold it’s going to be in the winter for selling boilers and furnaces. We don’t know how it’s going to be for sump pumps or replacement water heaters.”
Willey adds: “We can plan big-picture stuff, but we can’t plan for specific market reaction. We do the best we can to meet demand when it hits.”
Willey, who has been with Security for 30 years, has seen a strong shift in buying trends over the years.
“The heating seasons of my early years spiked in the third and fourth week of August through November. They’re not as big now and the season is not as long as it used to be,” he says. “In the Northeast, we depend less on that hydronic heating season for the end-all of a good year than we used to.”
One thing Fowler, Willey and the rest of the Security group can count on is when Major League Baseball’s playoffs start, business will be solid.
“I don’t think there has been one year where October hasn’t been our strongest month,” Fowler says. “Even if we hit a big commercial job in the spring or summer, October is always the biggest. Builders want to get their homes wrapped up. People remodeling their homes want to have them done before the holidays and then the hydronic season gets going. It’s a triple whammy. It’s a month of Black Fridays.”