Mike Miazga 2013-10-12 06:27:47
Treating people the right way has been a Southern Pipe cornerstone for 75 years. Weidmann’s restaurant has been a downtown Meridian, Miss., staple dating back to 1870. On a recent late summer night Southern Pipe & Supply Co. Chairman Marty Davidson is greeted by a good percentage of the remaining patrons in the venerable establishment, which combines a welcoming family atmosphere with impeccable customer service, not to mention delectable food. Davidson, once part of a group of Meridian businessmen that helped the restaurant navigate a brief patch of rough road, knows a thing or two about family and customer service — the drivers of Southern Pipe & Supply’s long-term blueprint for success. Celebrating its 75th anniversary this year, Southern Pipe & Supply’s unwavering commitment to its family members (employees) and customers has cemented it as one of the largest privately held independent wholesalers of plumbing, heating, air-conditioning, industrial, mechanical, water and sewer supplies in the Southeast, and has earned it the honor of being named the 2013 Supply House Times Supply House of the Year. The ‘Junk’ days Davidson’s grandfather, Louis Davidson, came over to the United States from Russia in 1901. He had hoped to make it to New York Harbor, but could only find passage aboard a vessel bound for Mobile, Ala. He made it as far as Meridian before his money ran out. In 1918, he opened the St. Louis Junk Co., a scrap-metal business, and later was joined by Marty Davidson’s father, Meyer, and Meyer’s brother, Sammie, in the family operation. St. Louis Junk Co. Sold its first carload of steel pipe in 1938 and within a year the business shifted to plumbing supplies, which triggered the name change to Southern Pipe & Supply. Marty Davidson, who took over the company from his father and uncle in 1968, became involved in the company at a young age, stocking shelves when he was five. A photo in the company’s conference room shows him at age 8 standing on the first truck used to make a Southern Pipe & Supply delivery. His son, Jay, now is company president/CEO and represents the fourth generation of Davidsons at Southern Pipe. The company celebrated its 75th anniversary with a massive gala in Meridian earlier this year. “Growing up I thought it was an interesting business and the customers were really neat,” Marty Davidson says. “These guys were fixing peoples’ plumbing. They were skilled craftsmen. Not everybody can fix peoples’ pipes. I thought that was a pretty big deal and saw a lot of exciting potential for growth.” Today, Southern Pipe & Supply features some 800 employees throughout its 96 locations in seven states (Mississippi, Alabama, Louisiana, Georgia, Arkansas, Florida and Tennessee). The company’s headquarters and massive central distribution center (for more on the CDC see Page 20) are located in Meridian. In the last 12 months, Southern Pipe has opened six new locations. Obsessive about service Several years ago, Southern Pipe chartered a jet with an interesting passenger manifest. A single faucet. “The customer really needed the faucet for the job he was doing,” Marty Davidson says. “We sent the plane up to Kohler in Wisconsin to get a $100 faucet and brought it to the jobsite.” Southern Pipe also went the extra mile to supply lavatory sinks for the Hard Rock Hotel & Casino in Biloxi, Miss. “They had to have these in order to open up,” Marty Davidson explains. “Because of the specs they had to come from China. We used Federal Express to get the lavs from China to this site. We’ll do whatever it takes. We’re obsessed with customer service.” Dennis Manley, branch manager of the Southern Pipe’s 67,500-sq.-ft. location in Meridian (just minutes from corporate headquarters), has his staff on alert 24 hours a day. “We have two people on call who rotate,” says Manley, a 40-year company veteran. “We’ll come down here on weekends and nights. One guy came in at 2 a.m. because there was a situation with the city and they needed some fittings. We opened up for them and we didn’t mind doing it. That’s great customer service. Our customers have access to us 24-7. Whatever they need, we will get it for them. We do what we say and we take care of our customers.” That high level of care translates into longtime customer relationships. “Southern Pipe is known by word of mouth,” says Alexa Marcello, the showroom consultant at the Southern Bath & Kitchen showroom located at the same Meridian branch site. “We have repeat customers. People who built houses here 20 years ago are updating them now. They tell me they bought everything here and are ready to come back and rebuild their kitchen or bath.” And on the rare occasions where things don’t go according to plan, Southern Pipe is ready to take immediate action to correct any problems. “Every company aspires to have a high level of service,” Southern Pipe Vice President of Sales Mark Roebuck says. “It’s much more than a slogan here. When a customer has a problem the amount of alarms and bells that go off here is incredible and often times it will go right to Marty or Jay whether its $50 or $50,000. One of our old slogans is Southern Pipe is service-plus. We’ll resolve the problem, fix it and make it right. Problems are not like wine. They don’t get better with age. The cost of a problem goes up every day it’s not fixed. You fix it at the point of the problem and make sure the customer is happy.” Southern Pipe Purchasing Manager William Jolly says getting a leg up in the wholesale distribution industry involves playing a game of inches. “Everybody can buy and sell the same things we can,” he says. “I don’t believe we have as much buying power as the big boys. It comes down to serving people. It’s not easy, but not real complicated. I can vacuum the carpet and make it look nice, but it doesn’t take long to notice if you aren’t doing the right things. We live it and feel it here. We provide superior service and competitive prices and that brings value to the customer.” Southern Pipe’s commitment to service extends to the vendors it works with. Rheem Water Heating National Account Manager Gary DeArman is struck by the “degree of service they provide to each of their customers, both small and large.” “I always feel I’m working with friends,” DeArman adds. “They always have been a true partner in our business relationship.” Delta Faucet Co. Vice President of Trade Sales Kenneth Roberts notes Southern Pipe’s relationship with Delta goes back decades. “We enjoy a close working relationship with Southern Pipe due to both companies’ passion for excellence and focus on meeting the customers’ needs,” he says. All in the family The other key component in the equation for Southern Pipe is its employees. However, you won’t hear the word employee used in the company. Southern Pipe is comprised of family members. “We believe people are critical,” Marty Davidson says. “If we have any edge, it’s that we have the very best people in place. People buy from people. They don’t buy from companies. It could say ‘Mike Supply’ on the door, but as long as we have good people, we’ll always have the edge. The No.1 priority in this business is you must have good people who care about customers. If you do not have people to execute your beliefs, it’s not going to work. The name Southern Pipe & Supply makes no difference. This is completely about people.” Human Resource Manager Ron Black notes the company implemented an Employer of Choice strategy 12 years ago. The premise behind the initiative is quite basic, yet has produced impressive results. Southern Pipe has been named the best place to work for by the Mississippi Business Journal six years running (based on surveys given to local employees). “If we attract the best people and retain the best people, we will be more successful,” he says. “The team with the best players usually wins. A key component is to attract good people, but more importantly you must retain good people who want the opportunity to grow professionally.” Cerro Flow Products Vice President of Sales Eric Pilas says it’s no surprise Southern Pipe continually wins the best place to work honor. “The words ‘family’ and ‘values’ are synonymous with Southern Pipe,” he says. “They are an icon in the plumbing and HVAC industry. Central to its fabric has always been the people within the company. They truly are both employee- and customer-centric. We view Southern Pipe as a partner and not a customer and look forward to their future support.” Jay Davidson tracks a plethora of statistics on company performance. One of his key metrics is volunteer retention rate. “Volunteer retention rate tracks the number of people who chose to leave us,” he says. “The metric I’m concerned about is making sure we have a high retention rate. Right now we retain 95% of our family members. Our first customer is our internal customer. If we take care of each of them, they will take the same good care of our customers.” Family member longevity has translated into an even greater emphasis on local service. “We’re part of the fabric of these communities,” Roebuck explains. “Our family members live, work, go to church and school and play in these communities. People aren’t there at a branch 12 to 18 months and then move to a bigger location. Our Brookhaven, Miss., branch is a small dot on the map, but we’ve been there 30 years and we’re part of that community. That’s the difference-maker.” Johnny Dean, a 37-year Southern Pipe veteran and the company’s director of information services, adds: “We have the ability to develop specific and long-lasting relationships with our customers due to our high retention rate.” Company structure is built around the ability of family members to continuously advance their careers. “I started here 29 years ago right out of high school,” Central Distribution Center Operations/Customer Service Manager Randy Skipper says. “I’ve been in management since 1995 and there always has been the ability to move up and grow with the company.” Manley has known Marty Davidson since his childhood days. “Marty gave me a chance because I said I could do it,” he says. “I certainly didn’t have the education. He gave me the chance because I showed I had a good work ethic and the tenacity to do whatever it takes to get the job done.” Cam Cameron, a 28-year veteran who oversees the East region of Southern Pipe locations, points out that deep sense of family extends beyond company family members. “I’m responsible for 180 people and they have wives and children, so that’s more than 500 people,” he says. “My job is to nurture and enhance these people and help them advance their careers so they can better provide for their families.” Southern Pipe CFO Marc Ransier recently instituted a health and wellness program, not at the behest of corporate management to try and lower healthcare costs, but instead to encourage wellness among its family members. “I told them it needs to be built to improve the length and quality of life of family members,” he says. “Jay always is encouraging us to change the norm. This is a company that has done quite well for 75 years. I respect the fact it’s a remarkable company, but at the same time they aren’t threatened by someone coming along and trying things this way. When you do make a change here, you can do it fairly quickly.” In addition to providing competitive wages and health-care opportunities, Southern Pipe further rewards family members through a variety of bonus and incentive programs. The President’s Club honors salespeople who meet or exceed yearly sales goals, while the Champion’s Club honors management members who meet or exceed their sales goals. Recipients in both clubs get a sports championship-like ring and an invitation to an exclusive company trip. “If the company is making money, everybody is getting a piece of it because they are family,” Marty Davidson says. “Everybody deserves to share in the success of this family.” Prepared to serve Included in that commitment to its family members is making sure top-notch training is provided. “We put a lot of time and money into training,” says Southern Pipe’s Doug Kennedy, a sales associate at the Meridian branch. “I don’t know another company that spends the amount of money we do on training. We’re always going to different training exercises, classes and seminars.” Kennedy went through the company’s Management Development Program, which gives new hires hands-on experience in the various departments of a particular branch. “You get a good feel for the different jobs in the company,” he says. “You understand where the warehouse guys are coming from and what the inside salespeople are doing. You understand a lot of the problems you probably would have no clue about if you had not spent three to six months on the job.” Meridian Sales Associate Ryan Whitaker adds: “It lets you see every level of our business from restocking the shelves to making a sale. The program provides a lot of insight into how things work from the ground up here. If you work hard here and do a good job, you are going to get rewarded.” Jay Davidson notes the company averages about 7,000 training hours a year. “Training is an obligation of an organization,” he says. “I want our family members to grow personally and professionally. It would be unfair to the customer and we would be unsuccessful if we put someone out there who was unprepared. We will better service customers if we have highly trained people.” Roebuck adds: “If people are trained well, customers are served well and efficiencies go up and that leads to sales growth and more profitability. It’s never a question of if we are going to have training here. It’s when we are going to do it.” Black explains the company started a Southern Pipe online university training course in 2004. A major overhaul of the program occurred in 2010, which led to the creation of the current-day Southern Pipe Learning Center. Black, a member of the ASA Education Foundation Board of Directors, adds Southern Pipe (an ASA member) has made good use of the tools ASAEF provides. “We’ve made a major investment in training to make our family members as productive as quickly as possible,” Black says. “We’ve upped the ante with training and offer great growth with the education we offer.” Southern Pipe’s website (www.southernpipe. com) provides a mountain of information for customers through both dedicated trade professional and homeowner Web pages. Expanding horizons When the Great Recession hit, Southern Pipe tried something different. It diversified its portfolio and placed a greater emphasis on markets such as HVAC and waterworks. Southern Pipe acquired three waterworks locations and has seen steady growth in that sector. “One way we reacted to the huge decline is to put more resources into business segments not dependent on housing starts,” Marty Davidson says. “Like everybody else we decided not to be reliant on new housing as much. We put more into the HVAC business because it’s a replacement business and more immune to the housing cycles.” Jay Davidson adds: “We had a goal of being more balanced and we put a lot of resources and capital into it.” In terms of the future, Southern Pipe, one of the few larger-scale distributors that do not belong to a buying group, plans on continuing to focus on what it knows best — servicing the customer in the Southeast. “We have no plans to be a national player,” Jay Davidson says. “We’re going to continue to focus on the Southeastern part of the country and continue to expand where we play and where we know the life.” Marty Davidson adds: “We deal in the South. It’s what we now and what we are part of. We’re happy where we are.” Ransier, who has been with Southern Pipe for just a year, continues to marvel at the scene that unfolds around him on a daily basis. “Southern Pipe cares about people and believes in them,” he says. “We have a very inclusive culture here. When they say they are very familyoriented, it’s true. I’ve never been in an organization where people love it as much as here. People are crazy about this place.” Keep it moving Southern Pipe & Supply thrives thanks in part to a well-managed central distribution center. Peavey Electronics is one of the largest manufacturers and suppliers of musical instruments and professional audio equipment in the world. One of its distribution centers is located in Meridian, Miss. Directly across the street sits another distribution center that makes sweet music of its own. Southern Pipe & Supply’s central distribution center sits on 25 acres, encompasses 200,000 sq. ft. And services the company’s 96 locations throughout the Southeast. The centrally located CDC has grown from 50,000 sq. ft. When it opened in 1990 to its current size. An additional 70,000-sq.-ft. HVAC distribution center is located a short distance from the main building. It opened in 2007. Under the direction of General Manager Charles Johnson, the CDC has taken its efficiencies to new heights. In 2008, Johnson helped implement a barcode system that has resulted in a team of only 50 family members efficiently operating the 200,000-sq.-ft. facility. “In order to be successful you have to have the right people, the right technology and policies and procedures,” Johnson says. “We’ve been able to move forward and our productivity and accuracy have gone up while doing more with less.” Johnson says the CDC typically takes in 20 truckloads a day and sends 20 trucks right back out. On average, 12 branches a day receive materials that should last anywhere from a week to two weeks. “We unload by noon and put it away in the afternoon,” he says. “If we don’t have it put away by the time the trucks leave, we may as well not have had the trucks here.” Southern Pipe employs a unique philosophy with its CDC where branches aren’t mandated to place orders there and can procure product directly from a vendor if they so choose. “We have to work to gain their business,” Johnson says. “The only reason we are here is to serve the customers in the branches. Our job is to feed the branches and get them what they want when they want. If we don’t do that, we don’t have a job. It keeps us on our toes.” CDC Operations/Customer Service Manager Randy Skipper applauds the staff of 50 for its work ethic and dedication to the company. “Our retention rate out here was terrible,” he says. “We needed to change. Now we have the best, if not the best retention rate in the company. We have 50 family members working in a place this size. They know the one reason we’re here is to get products shipped and on the shelves so our customers can sell them. Money is made out there, not in here.” A later shipping deadline for customers, plus incentive programs for family members based on least amount of errors made have proven to be equally effective efficiency strategies. Bubba Thompson was lauded in July for making no errors while picking 3,388 lines during the month. “We have a real-time inventory process now,” CDC Human Resource Manager Jimmy Simmons says. “We know who is doing what and if any errors are made we can go back and trace it and see where the problem is.” These recent advancements have led to even higher customer service levels at the 75-year-old company. “Product availability is a key service item with customers,” Southern Pipe Chairman Marty Davidson says. “Our central distribution center gives our branches great product availability. We never accept we can’t get it. There is no such thing as ‘no’.” Branching out Southern Pipe & Supply’s nearly 100 locations are empowered to thrive Southern Pipe & Supply Meridian, Miss. Branch Manager Dennis Manley often gets asked what it’s like running a location located minutes from the company’s corporate headquarters. “They always ask me if I’m looking over my shoulder,” he says. “The Davidsons don’t come here any more often than they do other locations. They let each branch manager run their branch the way they see fit. We make our own decisions. They let us have the freedom to do our job and do what we do best.” Manley adds that when he does need the help of the corporate office, it’s just a phone call away. “The thing I’ve enjoyed over the years is we’re independently owned,” he says. “I don’t think there are many companies in existence now where everyone has the cell number of the president and the chairman. I have access to them 24-7 if need be. They give us great backing to make decisions. They have an open door policy.” That autonomy is part of the company’s recipe for success. “The branch location is the center of gravity in this company,” Southern Pipe Chairman Marty Davidson says. “The home office is looked at as a servant of the branch. We’re not the boss. We work with them. The branch is where the rubber hits the road. We have to do everything we can to make them successful. “Seriously, what can we tell a person in Conyers (Ga.) To help them with a customer? At the end of the day, they have to make it happen.” Manley feels the wide-ranging independence factors into the performance and longevity of his staff. The Meridian branch has four people with 20 years of service and one 50-year veteran in Dick Massey. “We have a family atmosphere here and that helps us with longevity,” Manley says. Southern Pipe President and CEO Jay Davidson notes the corporate office’s main goal is to get the local branch to be able to constantly use a three-letter word. “We have to make sure they have everything they need to be a solution center,” he says. “We have to do everything we can to get to ‘yes’.”
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