The self-proclaimed specialist in “products with holes” is making some “revolutionary” changes to position the company for the future.

By Tim Triplett,
Editor-in-Chief

• Quick Facts
  

McNichols Co., distributor of perforated and expanded metal products, is in the midst of a major expansion campaign of its own.

Dubbing it the “Hole Revolution,” the Tampa, Fla.-based distributor is extending or relocating many of its facilities, adding new products and fabrication services, upgrading technology, and encouraging its 340 employees to be more “customer-centric.”

“I don’t remember a time when we’ve had so many facilities being expanded,” says Eugene H. McNichols, chairman and CEO of the business founded by his late father Robert L. McNichols in 1952.

Since November 2004, McNichols’ growth has exploded to more than 630,000 square feet across 19 locations. This includes recent commitments of more than $22 million for 280,000 square feet of new facilities in North America.

Some of the moves were forced by the physical constraints of existing facilities, McNichols explains, others by the opportunity to land prime space that had become available in better locations.

McNichols’ Atlanta and Dallas service centers were relocated to expanded facilities at the end of 2004, and its New Brunswick and Los Angeles facilities are being expanded and renovated this year. The company also has continuing expansion plans in the works for its Houston service center. In May, it opened its first international service center in Monterrey, Mexico.

McNichols flagship service center in suburban Chicago will also be relocated later this year, making it the company’s largest facility. Moving from a plant it owned in Elk Grove Village to a leased space in nearby Des Plaines with 30-foot-high ceilings will give McNichols the space it needs to service a growing Midwest customer base. “We’re looking at high-density storage systems, because we will have so much high space. We’re studying how to fully use the cube in that building,” McNichols says.

Later this year, the company will relocate its corporate headquarters to a larger high-rise complex located just minutes from its current offices in Tampa. McNichols leased 41,000 square feet, where it will consolidate three offices into one. The space even includes office furniture and equipment left behind by the former tenant.

“That’s a big step for us,” McNichols says. “We’ve never been in a corporate headquarters we haven’t owned, and we’ve never been in a high-rise environment, which is not typical of a service center. It’s just gorgeous,” he adds, “with water views on all sides.”

McNichols used to believe in owning the company’s facilities, but has since shifted his philosophy toward leasing. “It’s more flexible for us to grow when we need to move out to get a bigger place.”

The expanded facilities are necessary to accommodate the company’s growing product offerings and new fabrication focus, he explains. In response to increased customer demand, McNichols recently added four new products to its line: Extren fiberglass structurals, customized embedded angle frame, lightweight ADA-approved aluminum grating, and handrail fittings.

Further, in December 2004, McNichols expanded its wire cloth inventory and capabilities when it acquired the assets of F.P. Smith Wire Cloth Co. near Chicago.

With more space for fabrication, McNichols is making a $5.5 million investment in equipment and engineering to increase its value-added service offerings. The increased attention to fabrications like cut-to-size, cutouts, print takeoffs, welding, stair treads and metal finishes calls for the addition of saws, welding equipment, plasma cutters, rollers, slitters and levelers.

McNichols did not just expand its physical plant, but its human resources as well, increasing its workforce by about 10 percent in the past year.

“Like everybody else, we retrenched a little in 2002, when sales really got hammered and we had to tighten up,” McNichols says. “Now it feels very different, as we’re making money and trying to move some projects along to satisfy that pent-up demand I think is still out there.”

Growth means significant technological advancements at McNichols, too. Due to the specialized aspects of McNichols products and business operations around North America, the company’s information services team is dedicating more than $2.5 million to developing a customized in-house system know as Mserve to enhance its customer service capabilities.

As technology changes, so have the avenues McNichols explores for sales potential. In June the company launched a revamped Web site that contains more product applications photos for its architectural markets and new product information. The site content was redesigned to be more consistent and easier to read. Customers with product or fabrication questions can now chat online with live customer support personnel.

In January 2005, Gene McNichols stepped aside as president of the metal supply company and passed leadership to longtime top company executive Herbert T. Goetschius as president and chief operating officer.

In addition, Gene’s two sons took on more prominent management roles with the company. Scott M. McNichols was named executive vice president and general manager, the title Goetschius held for 20 years, and Steven R. McNichols was appointed vice president of advanced technology. The daily tactical operations of the company are now in the hands of the family firm’s third generation.

Today, the company claims to be North America’s leading supplier of metal products with holes, with 2005 sales expected to approach $140 million. Gene McNichols attributes this success to a strong family legacy, savvy marketing and professionals at all levels dedicated to providing customers with superior service, quality and performance.