Every Sale Is LocalDuring a banquet last year in New Orleans to celebrate Coburn Supply’s 75th anniversary, President Don Maloney recounted the company’s core values. At the top of the list: Being customer-focused.
“We must strive every day to earn our way by serving our customers and understanding how we can add value to them,” he told an audience of more than 1,700 people, which included 1,475 employees and their guests, as well as 225 vendors, manufacturers reps and special guests.
A list of core values, like a mission statement, can be a plaque on a wall in the corporate office. Or, as is the case with Coburn’s, a company can put it to work to navigate the road to success.
“We want to give our customers something that will help them make money,” Maloney explains in his office in Beaumont, Texas. “Trying to understand what customers need is different than what they may want. Getting material to them on time when they need it is very important, for example. Our three distribution centers deliver daily to every one of our branches to replenish their inventory.”
Executive Vice President A.J. Maloney, Don’s brother, adds: “As a company, we don’t forget what our place in the supply chain is. We’re here to service the contractor to make him, or her, a more viable contractor. We’re an extension of our customers. If our customers are successful, then we’re successful.”
The banquet where both Don and A.J. Maloney spoke capped a remarkable event where the wholesaler not only celebrated 75 years in business in the Gulf Coast region, but it also recognized employees’ efforts toward a year of sales growth. The latter achievement becomes even more noteworthy by the fact it occurred in 2009 at the height of the recession.
Coburn Supply Co. - or simply Coburn’s to its customers - has continued to grow despite an uncertain economy, devastating hurricanes and the Gulf of Mexico oil spill. It has performed exceptionally well by understanding its place in the supply chain, focusing on the needs of its contractor customers and valuing its employees.
These reasons have led PM to name Coburn’s our 2010 Wholesaler of the Year.
Market IntelligenceA second core value of Coburn’s is to add value to their customers by selling only quality products from quality vendors. The wholesaler sells these products in six categories: residential plumbing; commercial pipe, valves and fittings; kitchen/bath showroom; HVAC; waterworks; and tools and chemicals.
While the family-owned company does not disclose sales figures, it ranked 18th in a list of the nation’s largest plumbing-heating-cooling-piping wholesalers that appeared in May 2010 in Supply House Times, PM’s sister publication. The other companies in Coburn’s group post annual sales in the broad range of $100 million to $500 million.
Coburn’s has 50 locations, including branches and showrooms, in Texas, Louisiana, Mississippi and Tennessee. The distribution centers that feed these outlets operate in Eunice, La.; Jasper, Texas; and Pearl, Miss., near Jackson.
The branches provide the vital supply-chain function of moving products from manufacturers to contractors. They also give Coburn’s an ear to what is happening in each of their markets.
“Our market intelligence comes from our branches,” A.J. Maloney says. “We structured our management to get information from the street level about what the contractor wants. Information is filtered up about what is needed, and we’re able to hear what’s going on.
“What we do in this office is based on the belief that every sale is local.”
When Coburn’s gathered in New Orleans last year, it presented the company’s top sales awards to five branches that posted 15 percent growth in all six business categories from 2008 to 2009: Bossier City, La.; and Beaumont, Friendswood, Galveston and Galveston-Air Conditioning, Texas. A sixth branch, Houma, La., grew sales by 15 percent in five of the six categories.
“Last year, we all got caught up in our 75th celebration,” A.J. Maloney says. “Through our company sales promotion, we made a concentrated effort to make sure whatever activity was going on in our communities, we were going to become a part of it. The whole idea of a promotion is to go look for something new - find someone else we can service.”
Growth CurveCoburn’s has based its expansion in recent years on identifying opportunities and finding the right people to lead the way into new markets. When many companies were scaling back, Coburn’s opened branches in 2008 and 2009 in Lafayette and Slidell, La.; Memphis, Tenn.; Laurel, Hattiesburg and Pearl, Miss.; and Houston and Conroe, Texas. This year, new branches will open in Memphis; Gulfport, Miss.; and Baytown, Texas.
“People ask, ‘How many branches are you going to open this year?’ There’s no master plan or timetable,” Don Maloney says. “We react to what’s available. We want to be in a position from a financial and organizational standpoint to take advantage of opportunities if they open up to us. These opportunities could be a new market or to participate more fully in existing markets.”
The commercial mechanical market provides a good example of where Coburn’s has increased its presence in the last five years. From modest beginnings, its commercial PVF business now has eight full-time people dedicated to purchasing, quotations and sales.
A more dramatic expansion for the company occurred in recent years as it entered big-city markets it used to avoid. The wholesaler previously had preferred doing business in smaller communities where it felt closer to its contractor customers.
Coburn’s came to Houston about three years ago and to New Orleans in 2006, right after Hurricane Katrina. The moves fall in line with another of the company’s core values: Stay focused on the future.
“For us to grow, we had to go through Houston, Dallas and New Orleans at some point, and people became available in those markets to work for us,” Don Maloney says. “The dollars are bigger and the deliveries more complex, but we do there what we do in smaller areas. We’ve been able to create relationships with contractors, find out what they need and how we can meet that need.
“We still have to take care of the customer.”
Developing lasting relationships with customers has been an important element of the company’s growth. Coburn’s supports local chapters of the Plumbing-Heating-Cooling Contractors – National Association and was a platinum sponsor of the PHCC’s Connect 2009 convention a year ago in New Orleans.
Coburn’s incentive programs for contractors frequently appeal to their recreational interests. A points program tied to NASCAR races has been especially successful in finding new customers and getting closer to existing ones, Marketing Manager Michael Maloney says.
Embracing ChangeAnother core value is to adapt to an ever-changing marketplace by embracing change that will help the company become better at what it does. In Coburn’s case, change frequently comes with names such as Katrina, Rita, Gustav and Ike.
Katrina forced the evacuation of several of the wholesaler’s employees. Some of them relocated as far away as Illinois.
Coburn’s move to its modern, street-level corporate offices in downtown Beaumont is a direct result of Hurricane Rita. The storm knocked out the electricity in the company’s former headquarters, just a few blocks away.
“Rita came through a month after Katrina. It was a weekend storm and by Monday we were up and running again,” Don Maloney recalls. “Still, being on the ninth floor created problems. For one thing, the elevators didn’t work. We decided this is not the way to do it.”
Hurricane Ike destroyed Coburn’s Galveston plumbing branch. Fortunately, its nearby HVAC branch could accommodate the added staff and inventory until crews removed a foot of mud from the plumbing facility and rebuilt it.
While all the storms caused massive disruptions, Coburn’s didn’t miss any business days as a result. Coburn’s employees deserve the credit for the rapid turnaround, Don Maloney says.
“Our people were heroic. They really did a great job in their ability to get back into the community to service the community,” he says. “Once there, they had to handle the logistics created by the spike in demand for certain products. They would get our customers, both contractors and municipalities, whatever they needed to keep a city running.”
Today, Coburn’s has a Disaster Recovery Center in Longview, Texas, where a redundant system backs up all the company's computer records.
Long-Term ViewThe region’s most recent disaster is the blown BP oil well in the Gulf of Mexico. Unlike the hurricanes, the oil spill has not dislocated Coburn’s employees or customers.
The bigger concerns are the long-term effects of incident on the local economy and environment. A ban on offshore drilling could make a serious dent in an economy dependent on the oil-and-gas industry.
“The worst fears about environmental devastation haven’t happened yet - as far as we know,” A.J. Maloney says. “We’re hoping to find the right balance between keeping the oil-and-gas industry going and protecting the environment.”
The uncertain economy has presented Coburn’s and its customers with challenges not directly related to the oil spill.
“We see fewer housing starts for the foreseeable future,” Don Maloney says. “We want to use the time when the residential side is slow to improve the showrooms for people who want to remodel their bathrooms and kitchens.”
The wholesaler recently has opened showrooms in Bossier City and Lake Charles, La. New or remodeled showrooms are underway in Baton Rouge, Shreveport, Lafayette and Opelousas, La.; Longview; and Hattiesburg, Miss.
Coburn’s also continues to invest in training. It started Coburn’s University eight years ago for its star players and next generation of leaders, Don Maloney says. The latter group includes Chief Financial Officer Pam Mouton, A.J. Maloney’s daughter, and Michael and Patrick Maloney, Don’s sons. Patrick Maloney is an assistant branch manager in Harahan, La.
The company uses outside consultants as well as the American Supply Association’s Education Foundation to bring courses of value to their employees. The emphasis on training supports another core value: Believing in the value of the individual.
“One of the building blocks for this company is people make the difference,” Don Maloney says. “If we can train our people to do a better job of serving the customer, we’ll be successful.”
A.J. Maloney adds: “We recognize whatever ability we have to do business in the marketplace is a result of our people understanding our customers.”