When customers of the Ware Group/Johnstone Supply call their local branch or walk into one of the 11 locations in north and central Florida, they expect that the parts will be in stock and they'll be able to have them in their trucks and on their way to the job site without hassle. It's a seamless process because the people of the Ware Group/Johnstone Supply focus on making those customers successful. With the local presence of their markets and the support of a large national company, the Ware Group/Johnstone Supply makes it happen.
The Ware family joined the Johnstone Supply Cooperative in 1981. Over the years, they have opened new branches through organic growth, with plans to expand in its existing market as well as potential acquisitions in both existing and contiguous markets. Being part of the national cooperative has allowed the Ware Group to remain an entrepreneurial regional company with the backing of Johnstone Supply Cooperative. As Chris Ware, CEO of the Ware Group/Johnstone Supply, puts it, "We can act locally and buy nationally."
Johnstone Supply Cooperative is the largest member-owned, HVACR buying group in the United States, with more than 350 locations in the nation and a total sales volume of its members in excess of $1.2 billion. The goal of the Portland, OR-based cooperative is to create value for its 120 individual members, which it does through group buying power and a corporate office that provides centralized services such as merchandising, warehousing, marketing, purchasing and financial reporting. The cooperative has allowed the Ware Group/Johnstone Supply to keep its eyes and ears on what its customers want. "Our focus is to make our customers successful," Ware says.
Five regional distribution centers located strategically around the United States service the Johnstone Supply Cooperative, including one in Jacksonville. The city also is the site of the Ware Group/Johnstone Supply headquarters and two branches. The distribution centers represent another important feature of being part of the cooperative — the warehouses and distribution network mean members can offer expanded product offerings, improved inventory availability and shipping accuracy — delivered within 24 hours.
The Ware Group/Johnstone Supply branches still reflect a family feel, which represents the Ware family's imprint on each location. "We want our employees to feel like they're part of the Ware Group family," Ware says. For Ware to grow the business even more successfully, however, he felt the need to bring an outsider's perspective to the organization. In 2004, he turned to Henry Puente, CEO of an internationally owned, $1.4 billion wholesale natural food and vitamin business.
"I wanted to raise the bar," Ware says of his decision. "We needed a higher level of accountability, reporting and what we expected out of our people. I wanted an owner who didn't have my last name involved to show the industry that we're moving on from dad and the kids running the shop." As a partner in the business and president of the company, Puente has succeeded in raising the bar and bringing in best practices from the corporate world. "We're more professional and more accountable, and our employees appreciate that," he says.
So the business now relies on management methods as well as a strategic planning process to ensure that it runs efficiently. Yet, you'll still find Ware and Puente making sales calls and making decisions with customers over the lunch counter. The Ware Group/Johnstone Supply has managed to keep the personal touch that its customers have come to expect. "We can move quickly to respond to customers," Puente says. "Branch managers rarely need to call me when they're making decisions. We like to be fast. I love the word relentless because that describes us to a T. Our desire is to serve the customer."
Puente says the Ware Group/Johnstone Supply has been able to attract good talent to the organization — smart, fast-paced people who share the owners' desire to please customers. While a growing organization often experiences hiccups and growing pains, the Ware Group/Johnstone Supply has been able to avoid many of those issues because its people understand that the path to success is rarely a straight line, Puente says. "These are people who are willing to change and better the organization," adds Mike Bell, vice president of Sales. "We're like a battleship rather than an aircraft carrier. Stay the course, but we're willing to change quickly and ably if we need to."
Puente says that to focus on its customers, the company must first focus on meeting the needs of its employees. "We can't take care of our customers unless we take care of our employees," Puente says. "Our focus remains on giving them the proper training and the proper tools that will allow them to take care of our customers."
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From September through April, the Ware Group/Johnstone Supply holds a series of regular training sessions for employees and customers, which include all facets of the business, from sales and management to technical and products. "We try to take advantage of offerings from our vendors. Johnstone has Johnstone University, and that is a resource for our people as well as our customers," Ware explains. The business is also using the Web as a training tool.
Training is more important than ever for employees and customers, Puente says. While there is already a tremendous amount of product training, the Ware Group/Johnstone Supply wants to set itself apart by providing its employees and customers with the tools that will help them better themselves on the business side. From how to run a branch to how to make sales calls or work with people, these are subjects that often make or break a business — even if that business is a small HVACR contractor. The Ware Group/Johnstone Supply measures its success by the success of each customer. The business also tracks and measures the training hours from each branch.
With this consistent training, the Ware Group/Johnstone Supply boasts a knowledgeable and experienced staff that has helped ensure a consistent company message. Many of its 145 employees have done their contractors' jobs and speak their customers' language.
But Ware says it goes beyond the knowledge and experience. "Our people care about the success of our contractors," he says. When a prospective employee walks through the door, the HR staff makes sure that the person will be a good fit for the organization and has the people skills that are so important to building and maintaining a strong team. That means making sure the people at the branch location (where the employee will be working) agree that the person will be an asset. "We won't hire anybody unless the people they are going to be working with or for are fully on board," Ware says. "We make sure that the guys in the field sign off on any hires that we make."
The sign-off by the branches also demonstrates the level of autonomy that the branches have in the Ware Group/Johnstone Supply's operations. Branches are empowered to make local selling and buying decisions without the need for approvals from the main office. As part of its move to become a more professional, goals-oriented business, the Ware Group/Johnstone Supply in 2004 developed a strategic plan, with each branch owning a piece of that plan. "We're all in agreement about what we're going to do. It's in their plan," Ware says. When it comes to inventory, each branch stays within certain parameters that it has established for itself and determines the mix that they want to have to successfully reach their goals.
Ware says they encourage the branches to remain aggressive but also to be a little more coordinated about the decisions that they make. A store support team in Jacksonville works with the branches to handle back-end issues and logistics. "Our message is that we're here to help you get your job done," Puente says. "We don't want to create the distinction that it's us versus them."
Retail merchandising techniques characterize the branches: bright, clean and spacious stores that effectively use signage, promotions and displays. While the merchandise and setup of each branch is similar, the product mix reflects its individual market size and customers. Stores range in size from 20,000 to 60,000 square feet, with $1 million to $3 million in inventory. Its satellite locations are smaller in size (10,000 to 15,000 square feet) and inventory (about $700,000).
Because of its focus on the success of its customers, the Ware Group/Johnstone Supply makes sure that contractors can get in and out quickly. They stress an experience that is fast and pleasant, whether it is at the sales counter, over the phone, on the Web or through a delivery. "Minimizing contractor downtime helps them be more profitable," Ware says.
As part of this effort, the business has achieved major gains in efficiency since moving to its new Eclipse system for enterprise resource planning (ERP), a demand-based, real-time purchasing system. Bar coding in all locations has brought tremendous improvements, says Don Livingston, vice president of finance and IT. "The inventory accuracy has gone to the nth degree," he says.
"When a customer comes in or calls or looks on our website, they can be 99.9 percent sure that we have what we say we're going to have," Livingston notes. The Ware Group/Johnstone Supply warehouse is now paperless, and Livingston adds that being able to "pick without paper" has increased productivity. "We are totally committed to using technology as a tool for our guys to be able to service our customers," Ware says.
With the Johnstone Supply Cooperative regional distribution warehouse located in Jacksonville, the company offers same-day and next-day service, with 80 percent of products delivered to any branch location by the next day, Livingston says. Products also can go between branches if a customer has a particular need. Because they are members of the Johnstone Supply Cooperative, branches also can work with other members around the country to source particularly hard-to-find items. "Sourcing hard-to-get products is our specialty," Ware says.
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As a longtime member of HARDI, Ware and his staff have worked over the years on many of the association's committees and participated in its forums. "It's all about the betterment of the HVACR industry," he says. In April, the Ware Group/Johnstone Supply hosted HARDI's Southeastern Region meeting.
Ware says that when customers utilize HVACR distributors as partners rather than as a supply house to merely purchase a part or product, they will achieve success. "Customers utilize us as an extension of their organization," Ware says. The Ware Group/Johnstone Supply provides their customers with the one-stop shopping experience that will make them more profitable in the long run. And that benefits everybody.
Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].
Best Practice
Utilize technology … to drive our business and provide market leading customer service to the various customer segments we service.
Definition and Example: Utilize sales data (by customer segment, by customer, by product segment, by vendor) to understand various sales opportunities in our markets and with our customers. Utilize radio frequency handhelds in our stores/warehouses to ensure accuracy of inventory and order as well as speed of order processing.
Significance: Understand market and customer opportunities, which allows us to focus our outside and inside sales staff on the largest, most profitable sales opportunities. Inventory in-stock position, accuracy of inventory, accuracy of order and speed of order processing are all key differentiators in our marketplace.
Benefits: Increased sales and market share. Best-in-class customer service ensures high customer satisfaction and penetration. Allowed us to reduce manpower 25 percent.
Procedure: Every transaction and customer touch are affected by the advantages of our technology. Accuracy and speed are enhanced through utilization of specific technology.
People involved: The entire company — every Ware Group Inc. employee — utilizes and embraces the advantages provided by the use of technology.
Timing: It took one year to decide, implement and begin to realize benefits from the new software (ERP and related add-ons) and hardware … from the decision in July 2006, to our implementation in February 2007, to start reaping benefits in June 2007.
Cost: Hardware, software and related training costs approximated $1 million. The return on investment has been tremendous as our market share has increased and operating costs have gone down … could not have done that without technological upgrades.
Other considerations: We have woven technology into the core fabric of our company. It is no longer a tool … it is what we do.
Contact: Chris Ware, CEO, [email protected]; Henry Puente, president, [email protected]; Don Livingston, VP of finance and IT, [email protected]
Ware Group/Johnstone Supply at a Glance
Cameron Perkins, VP Vendor Management and Marketing
Don Livingston, VP Finance and IT