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MCN Case Study: Industrial Tube & Steel

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Map Out the Move No detail is too small when planning a move to a new location, say executives of this Ohio long products distributor. By Dan Markham, Senior Editor No one-size-fits-all blueprint exists to take an entire warehouse operation and relocate it, either across the street or across the state. It’s a task most service center executives rarely face in their careers. Mishandled, it can result in significant lost sales and tarnish the luster of the shiny new place of business. Industrial Tube & Steel, an Ohio distributor of steel tubing and bar products, successfully handled the relocation of its West Chester branch in August. The move to a new facility a few miles away nearly doubles the operation’s floor space and offers a host of additional logistical advantages. Founded in 1956 in Akron, the Ohio company is now headquartered in a 120,000-square-foot facility in Kent. It opened the smaller West Chester branch near Cincinnati in the 1980s to serve customers on the other side of the state. Eight years ago, Dick Siess, son of founder Edmund Siess, decided to turn the branch into a near copy of the main location, adding the full line of products and services, including Dura-Bar products. With the leadership of Sales Manager Damon Gaynor, grandson of Edmund Siess, and General Manager Bob Snyder, the operation was able to duplicate the corporate culture that had made ITS so successful in Kent, and eventually outgrew the building. Construction of a new West Chester service center began in the fall of 2013, using the Kent facility as a model. The new plant includes nearly 80,000 square feet for metal storage and processing. It has drive-through entrances on both ends, with internal docks so trucks can be loaded in the evening for delivery the next morning in any weather condition. Improved material flow is a major advantage of the new building. “We wanted to be more efficient in how we cut material, how we process it and how we get it on the truck, so we can get material to customers when they need it,” says Gaynor. The work environment is designed to be employee friendly. Bright white walls and equally bright lighting are meant to have a positive psychological effect on the workers. Large fans on both sides of the building keep the building at a reasonable temperature. “That keeps employees happy and it cuts down on rust on the steel,” Gaynor says. ITS customers include fabricators, machine shops and manufacturers of most types. Since ITS has no minimum order size, it also serves small job shops and weekend warrior-type metal users. Semis and pick-up trucks alike can be found pulling into the new facility for orders. Even as building work continued, ITS staffers began preparing for the relocation of inventory and equipment. Prior to shutting down for the move, the company notified every customer and encouraged them to place their orders early. “We made it very clear to our customers through emails, phone calls and other ways of getting the word out that this was coming. If there was anything they needed, we wanted to take care of it now,” says Gaynor. ITS suspended deliveries from West Chester for the week of the move, though salespeople continued to take orders. Those that could not wait were delivered from the Kent warehouse. Naturally, the company sold down much of its inventory leading up to the move. The more material delivered to customers, the less it had to move and place back into inventory. “We wanted to let things run out as much as possible, while not letting the customer notice it,” Gaynor said. The move remains a work in progress for several more months as the company ramps back up to normal velocity. Gaynor says he learned several lessons from the experience: Be patient. It’s tempting to want to rush the process along, but that’s counterproductive. Inform your customers. Repeat as necessary. “Probably the most surprising to us was how understanding our customers were. We had our hiccups, but because we were proactive, rather than reactive, our customers were able to make their adjustments with us fairly seamlessly,” he says. Plan extensively. From a thorough plan of the facility itself to the ins and outs of the move, no detail is too small to consider. Trust your people. You put the people in positions of responsibility for a reason; let them handle their end of the transition. Roll with the punches. The unexpected is unavoidable. “There are things that happen that are out of your control, and you have to be able to work with it,” Gaynor says. That attitude was put to the test when a strap broke on the rigging that was lifting a saw, which flipped upside down and hit the concrete. The saw did not survive the fall. Gaynor opts to look at the bright side. “No one was hurt. Equipment can be replaced.” Such a move doesn’t end when the door opens for business on Day 1. The entire staff, from the office to the warehouse, must transition through a learning curve. “It will probably take a month or two before we get back to normal inventory levels and really start to fly,” Gaynor says. “It has been fun to be a part of this,” he adds. “Now we just have to get out there and sell to pay for that pretty building.”