A few years ago, I had the privilege of sitting down with David A. Cunningham in his office at Hugh M. Cunningham Companies (Supply House Times 2008 Manufacturers Rep of the Year), the Dallas-based rep agency founded by his father that now is one of the largest independent manufacturers representatives in the country.

I came away from that interview highly impressed with Cunningham’s zest for life, dedication to the business, emotion when talking about his father’s legacy, willingness to empower his team and ability to look outside the box at opportunities to grow the business.

He deftly balances relationship building and service with high-tech tools and practices that ensure greater efficiency throughout operations. But it hasn’t come without some serious challenges. Shortly after his father’s death in 1984, the S&L crisis led to disastrous economic conditions — and HMC being dropped by its long-time bank. Thanks to long-term relationships with vendors and customer allies, they were able to navigate through that crisis, but it forced Cunningham and his team to push the boundaries of their traditional comfort zones in exploring new ways to diversify revenue streams.

They took on complementary lines, stocked product in a massive warehouse that was designed with the utmost productivity in mind, and expanded their footprint into the neighboring states of Oklahoma, Arkansas, New Mexico and Louisiana. HMC combined the four Texas market-specific business units with four separate state entities which formed eight business units: PlumbingMechanicalGroup; FireWaterGroup; FlowControlGroup; HVACGroup; OklahomaGroup; SandiaGroup; LouisianaGroup; and ArkansasGroup.

This allowed HMC to position itself as local agencies in these states while focusing on Texas with separate sales forces in different market sectors.

Since that last interview, HMC has rolled out a number of forward-thinking changes. First, it moved into a colossal new 115,000-sq.-ft. facility in Dallas that is the epitome of modern both in warehousing and office space. HMC will be expanding “next door” with an additional 25%-plus space in January.

“The new facility has positively and dynamically impacted sales, marketing, training, distribution, service and support,” Cunningham says. “We have ‘room’ to facilitate all areas of responsibility. Our warehousing costs have dropped by low double digits; inside sales customer service has improved its response to 94% phone-call pickup; and we now can handle six-plus direct container loads per month. We also are better positioned to be a viable option as a regional distribution center for our vendors.”

Among the special equipment and design features of the warehouse are:

• A push-pull-squeeze forklift for handling products;

• A higher roof line that expands vertical pallet storage
  by 40%;

• 24 Auto drop pallets to shorten pull time;

• Expanded staging area;

• 2 Auto stretch wrap equipment;

• Roller rack system for date-sensitive product;

• Built-in pallet levelers for 12 doors;

• 30% larger outside storage;

• Variable aisle width for various sizes/configurations of packaging; and

• Fully paperless technology including bar-coded shipping and receiving.

“We are fortunate to be able to share this new facility with our customers,” President Jim Ambery says. “It gives a great snapshot of the pride we take in servicing our customer base, as well as representing our vendors in the market. We now have a training room, HughU, capable of holding more than 75 people comfortably, that has grown our onsite training 300% annually. Our BusyBeeBistro was designed for associates and guests and seats 30. All have separate entrances and we can host events that impact our daily business.”

HMC also has warehouses that it calls “WillCallAnnexes” in Houston and El Paso, Texas, Albuquerque and Oklahoma City. This allows HMC to service its customers’ needs with same-day pickup.

But HMC’s number one job is sales. “We have increased the number of salespeople both inside and outside,” Ambery explains. “We currently have more than 34 full-time outside salespeople and are actively interviewing to hire three more.”

Senior Vice President Dan Townsend adds: “We have 38 full-time inside sales/customer service and quotations folks working within and together in 10 teams.”

In addition, HMC has developed, marketed and staffed a new initiative called “The Wholesaler’s Pump Source,” which features multiple complementary interlocking pump products from several key vendors for sales only to the wholesale-distribution base for its contractor customers.

The future is now

HMC has completed a transition plan under which Cunningham became CEO and Ambery, formerly senior vice president and Plumbing-
MechanicalGroup manager, became president.

“Jim was our regional manager for Moen Commercial for three years,” Cunningham notes. “When I first met Jim, I was thoroughly impressed with his work ethic, market adeptness, honesty and sales skills. Jim is now a Texan and when Moen offered him a significant promotion in Cleveland, he and his family wanted to stay in Texas. I seized that opportunity to bring him onboard. Months later, Jim and I began laying out the path for him to become president. In HMC’s 70-year history, Jim is only our fourth president. None of his predecessors were better prepared, more qualified or more able to fulfill this role. I’m so proud Jim is leading my dad’s company.”

Ambery adds: “David and I share so many similar beliefs on the sales process. We don’t let all the complexities of what we have going on in the company get in the way of the selling process. It still comes down to being in front of the customer and building a solid relationship with them.”

By all accounts, the transition has been exceptionally smooth. Ambery is highly regarded by both HMC’s vendors and customers. While his experience has primarily been with the PMGroup, HMC is methodically getting him more involved in all markets. HMC has an outstanding team of dedicated long-term executives and staff who are empowered to do their jobs in the way they believe will best serve their customers.

“Throughout the transition, I have tried to learn as much as I can from David on a daily basis,” Ambery shares. “I’ve worked extremely hard to gain the trust and respect from our vendors that have, in many cases, been dealing with David for years. And we have so many talented people who also have great relationships with these same customers and vendors. It truly is a team effort.”

Cunningham and Ambery are focused on recruiting quality people for leadership and management positions for the future.

“Our agency has leaders who are in their 50s or older like me at 61,” Cunningham notes. “We will transition over the next three to five years to the next generation of leaders and managers, and Jim will take on the CEO position as well in the not-too-distant future. The book on my business career is now in its final chapters as far as day-in and day-out engagement. I wear hats as an owner, leader, manager and employee. Meanwhile, my family and I will maintain, grow and position a solid and dependable capital foundation so HMC, under Jim’s leadership, can continue to operate with the best associates, vendors, customers, tools and partners possible.”

Cunningham and Ambery are strong believers in the future of independent representatives and their ability to offer manufacturers a proven methodology of selling and promoting products.

“Agencies position broader market penetration more cost effectively,” Cunningham notes. “The agency is ‘in the door’ and is the ‘point of the spear’ of sales for the manufacturer. Amazon and other internet direct-sales purveyors have somewhat replaced the ‘dread’ in our industry that home centers elicited a decade ago.

“Wholesaling is very different than retail. The sales and disbursement demands on all of us in the professional construction trade is fierce, dynamic, fast and decisive. When agents and wholesalers deliver products in a timely manner, it lowers labor costs and everyone wins — the owner, distributor, vendor and us. As long as representatives add value in the distribution chain, we have security. All of us must drive out mirrored costs and wasted energies. Productivity is as important to the agent as to the manufacturer. I believe the role of agencies is more important today than it was 10 years ago.”

Ambery concludes: “Technology, and the speed at which it changes, has forced all reps and manufacturers to communicate and work together more than ever. If you are not working together as a cohesive unit with your manufacturers, you are certainly falling behind in the eyes of your customers. In order to be successful, you must have a strong and candid relationship with your manufacturers. It has become much more of a partnership over the years with both parties willing to accept and deliver criticism in a fair and constructive manner as a means of better positioning themselves in the process.”

This article was originally titled “Building blocks for the future” in the October 2016 print edition of Supply House Times.