From Pads to an HVACR Powerhouse DiversiTech Grows Its Business by Offering More for Its Customers
HVACR distributors want to work with manufacturers who provide them with quality products and then back up those products with reliable service and on-time delivery. When that manufacturer can offer a comprehensive line of HVACR products so that a distributor needs to create only one purchase order and cut only one check, that's even better. Less time and effort for the distributor translate into big cost savings.
In essence, the ability to provide such consolidation of goods and services has been the key to the success of DiversiTech during the past two decades. The company has grown from a manufacturer of concrete pads to one that offers a catalog of more than 8,000 SKUs of HVACR products and chemicals, most of which DiversiTech and its companies manufacture. DiversiTech has become a powerhouse in the industry by listening to its customers and providing them with what they need to grow.
This transformation began more than a decade ago. Jim Kirby, the senior vice president of sales for DiversiTech, recalls traveling with his sales representatives in the 1990s and hearing customers tell him they would do all of their business with DiversiTech if he could develop a product catalog. DiversiTech's customers said the company was easy to do business with, and they liked its people and its sales policies that, for example, allowed distributors to return unsold items to DiversiTech without a restocking fee, Kirby says.
With the blessing of DiversiTech's President Charles Lipman, Kirby and his staff built the catalog and undertook an effort to manufacture their own line of products. Today, Diversi-Tech-manufactured products comprise about 75 percent of the company's revenues. Its diverse product line includes everything from equipment mounting pads and installation accessories, such as air-conditioning disconnects, to a full line of professional coil cleaners and system maintenance products. Based in Duluth, GA, the company has manufacturing facilities in Georgia, Florida and Texas, as well as overseas facilities in China. DiversiTech also has three distribution centers outside of Atlanta, Los Angeles and Nottingham, England. In total, DiversiTech has one million square feet of manufacturing and distribution space and about 300 employees.
Kirby is proud of the progress that DiversiTech has made in developing new, highly engineered products for the HVCAR industry, and he gives much of the credit to the engineers in its product development group. Investing in research and development has not only propelled DiversiTech into being one of the leading manufacturers in the HVACR industry, but it has further positioned the company to be more of a one-stop shop for its customers. “We're now able to serve wholesale distributors with a broad base of installation and maintenance products,” says Bud Sjogren, executive director of business development for DiversiTech. “Distributors and contractors will continue to see the results of our continued investment in product development. Today, we are evolving into a business that's generating new products for the industry.”
By truly understanding the needs of contractors, DiversiTech's product development group has been able to bring a number of new products to the marketplace, says Brian Creager, the company's director of marketing. The company has also made a concerted effort to understand the needs of contractors as well as its distributor customers. DiversiTech has accomplished this through formal channels, such as focus groups, as well as through informal methods like time on the job with customers, explains Creager.
DiversiTech's independent sales representatives are always listening to what their customers want. They often ride along with customers to visit with contractors, and they utilize their time to talk with them during their scheduled visits to local distributor branches. “That's really key to understanding how the contractors work. What are the tools they need, and what are the products that will help to improve their efficiency?” Creager says.
The dialogue goes beyond Diversi-Tech's sales representatives and their customers and contractors. It's a team approach that includes all departments, from the product development group to those in distribution. In their quest to create productive new products, DiversiTech even encourages anyone with a new idea for an HVACR product to submit it on the “invention portal” page of its website (diversitech.com/invent). The company promises to treat each idea professionally and provide a fair compensation program for the originator of new ideas. For example, the DiversiTech Dolly Strap, which securely attaches the condenser unit box to the dolly to make it easier and safer to move the unit around at a factory or job site, came about through the portal.
DiversiTech's SOS Switch came about when a distributor approached the company about producing a different type of safety overflow switch. DiversiTech's engineers developed a completely interior, non-intrusive switch that does not require drilling, holding or stopping the line. The Diversi-Tech switch uses completely exterior, non-intrusive technology to sense when a drain line is clogged; slime and sludge don't affect its reliability. The SOS Switch has simplified the work for distributor and contractor alike.
DiversiTech extends its reach throughout the HVACR industry to include relationships with cooperative buying organizations, independent accounts and OEMs. “We're well-positioned in all of those categories, and their loyalty has enabled us to grow,” Kirby says. DiversiTech is a member of most major cooperative buying organizations and recently received the Vendor of the Year award from Blue Hawk, an HVACR cooperative. “Blue Hawk was built around the theme of consolidation,” Kirby says. “Their members understand the value of consolidating purchases with a supply chain partner. They can avoid the cost of managing several different vendors covering a lot of product requirements with DiversiTech.”
Kirby says DiversiTech's sales representatives consistently reinforce the message of consolidation when they meet with customers. “As they climb into their cars every day, that's the message they take with them,” Kirby says. Through frequent visits, DiversiTech customers quickly understand that the company's “consolidation” theme is about building and maintaining a relationship throughout all levels of both organizations.
Offering the products is one thing, being able to deliver them on time is another. That's something that Diversi-Tech takes to heart. “From our standpoint as a manufacturer, we have to make sure that we deliver world-class service at competitive prices so our wholesalers can have just-in-time inventory to service the contractors,” Kirby says. With DiversiTech's state-of-the-art distribution centers in California and Georgia, the company is able to meet its customers' schedules. The automated Georgia distribution center uses bar code scanners and tote bins to move the products through the system quickly.
DiversiTech continues to integrate new computer technology to create a more seamless supply chain that will further improve on delivery and take additional costs out of the supply chain. “The one thing that continues to change is technology,” Sjogren says. DiversiTech has invested in a new computer system that is allowing more distributors to communicate electronically with the company. Order entry times are shortened, tracking is simplified, and ordering and processing information is more easily and readily available. The goal, Sjogren says, is to “add value to the wholesale supply chain so that the distributor partner can be more profitable.”
But the human element remains an absolutely essential part of the supply chain. Without employees who understand the HVACR distribution market, all of the advanced hardware and software mean nothing unless the products get on the distributors' shelves, Sjogren says. DiversiTech's customer service employees are second to none, Kirby notes. “In fact,” he adds, “they're often referred to as the benchmark of the industry. One of our strongest points is our customer service department.” He credits them with handling everything from technical questions to information about orders and deliveries. “They've built friendships with our wholesalers over the years,” he says.
With its growing customer base in the United States as well as in Latin America and overseas, DiversiTech also has staff with an expertise in distribution. With its Far East manufacturing operation, DiversiTech is an NVOCC and has its own licensed import brokers on staff to deal directly with customs and shipping lines. Having this specialty further drives costs out of the supply chain and provides better customer service, Sjogren says.
Even as technology is applied in our business, it's the personal interactions that drive business throughout the supply chain. Contractors, Kirby says, will continue to require the help of knowledgeable wholesalers who are skilled in recommending the best products for their needs. “The contractor wants to be able to go into the wholesaler and get the technical support with a new thermostat or widget that's on the market. He wants to be able to talk to somebody,” Kirby says. “The role of the wholesaler as an expert resource will continue to bring value to the contractor and manufacturer alike.”
DiversiTech is committed in its plans to continue to grow its business and make it even more attractive for HVACR distributors to do business with it. The company plans to grow 20 percent annually over the next four years. An aggressive goal, sure, but DiversiTech is a company that believes in what it sells and has created a streamlined process of bringing its products through the supply chain to customers quickly and efficiently. DiversiTech will continue to be a company that distributors find easy to do business with. After all, it's easy to do business with a company like Diversi-Tech when they work at reducing your costs, streamlining your business and producing and delivering the products and equipment your customers want.
Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].
Brian Creager, Marketing
Bud Sjogren, Business Development
Brian Jackson, Materials
Mark Minor, Eastern Operations
Artie Toevs, Western Operations
Raymond Hamilton, Chief Financial Officer
Eddie McDonald, Chief Information Officer
Paula Frnka, Human Resources
East West Manufacturing LLC
DiversiTech UK Limited
DiversiTech Transportation Inc.
Installation accessories — whips, disconnects, secondary drain pans, condensate pumps, PVC pipe and fittings, clear vinyl tubing, liquid-tight conduit, thermostat wire, cushion clamps, condensate overflow detection switches
Maintenance and repair products — coil cleaners, glycols, water treatment, drain pan treatments, drain cleaning guns, motors, hard start kits, refrigeration oil, personal protection equipment, acid test kits and treatments Ancillaries — access fittings, line tap valves, AC components, antivibration pads, thermostat guards, tools, electrical connectors and terminals, fin combs
www.wetswitch.com
www.ewmfg.com
www.diversitech-uk.com