For William Churchman, running an efficient operation begins with a philosophy.
True, the CEO of Imperial Pools Distribution in Latham, N.Y., has
reorganized his warehouse space, restructured his workforce and
reduced the turnaround time on orders. But the key, he insists,
lies in a progressive state of mind.
“The most important thing is the culture you create by
talking about these topics,” Churchman says. “If it
doesn’t add value for the customer, then it’s waste.
That line of lean thinking permeates the company now, and
it’s reflected in a new attitude among our
Imperial Pools’ approach is not unusual for modern
distribution firms. Regardless of their size, the clients they
serve or the challenges each faces, distributors in the pool and
spa industry have spent the past couple of years discovering how to
stay competitive without sacrificing customer service or yielding
Here, several of the leading distribution companies share the steps
they’ve taken to remain competitive.
When Bill Kent re-examined his business two years ago, he
considered “every line item.” In doing so, he quickly
identified areas of his distribution business that could be
streamlined or, in some cases, outright eliminated.
So the CEO of HornerXpress in Ft. Lauderdale, Fla., closed down
locations in Lakeland, Melbourne and Ocala, Fla.
He then set about seeking better lease terms for a number of other
“We went to those landlords and asked for reductions,”
Kent says. “We explained to them about our marketplace and
told them we needed their cooperation, we needed their
Through phone calls and personal letters, Kent was able to secure
20- to 30-percent reductions for six of the eight Florida sites
that were targeted. In the two years since, he adds, not a single
one has tried to renegotiate back up.
“This is the new normal,” Kent says, “and this is
the way it is. We need to just get used to it.”
At distribution giant PoolCorp, vice president Mark Joslin also
managed to renegotiate leases — nearly 40, he says, on
facilities throughout the country. Because they represent the
company’s second-largest expenditure behind personnel,
PoolCorp as a result has realized savings in the neighborhood of
$40 million, he says.
But the reorganization hardly stopped there. Joslin notes improved
efficiencies in the labor force, citing for example the relocation
of some 30 West Coast-based support staff to more centralized
locations, as well as standardizing various company-wide programs,
everything from travel procurement to waste-disposal
“Even if it’s things like reducing unneeded cell phone
lines,” Joslin says, “we really looked at every cost
across the organization and asked if we could do it more
efficiently, but also do it in a way that didn’t negatively
impact our customers.”
When it came to establishing a lean culture at Imperial, Churchman
rearranged the company structure, which included elimination of
about a dozen positions in middle and upper management, he
But he also streamlined what he calls the company’s
“silos of responsibility.” For example, the sales and
operations divisions in the past worked largely independently of
one another. Sales typically interfaced with the customer, while
operations focused on fulfillment.
“Today they work much more in concert,” Churchman says.
“The branch manager now has the same boss as the outside
sales representative — together they establish the goals and
strategies for the different branches and regions, as opposed to it
all coming down from the top and both sides doing their own
About a year ago, Susan Stern had her own staffing dilemma. A
reduction in business meant there simply wasn’t enough work
to keep all of her eight employees busy for 40 hours a week.
Rather than send one to the unemployment line, however, the
president of California Specialty Distributors in San Luis Obispo,
Calif., found a better alternative. She contacted the state’s
Employment Development Department and applied for its Work Sharing
Unemployment Insurance program.
Operated by the government, the program is offered to employers
that experience a decline in production and wish to avoid layoffs.
It allows the affected employee(s) to work a reduced schedule while
collecting benefits for the hours they aren’t on the
It’s straightforward, but not a quick process, Stern says,
noting it took about six weeks from the time she applied to the
time she was approved; she has since instituted the program for
three-quarters of her staff, including sales, warehouse and
“I think it’s a good way for companies to retain their
employees,” Stern says. “And when business comes back,
I can give them their hours back. But that’s how I’ve
leaned up — by reducing hours.”
According to Barry Knickerbocker, finding opportunities for greater
efficiency is “the most fun part of the business for
The president of Spa Parts Plus in Prescott Valley, Ariz., is
constantly looking for new ways to trim expenses, often utilizing
technology when appropriate. For example, some time ago he decided
to drastically reduce the company’s reliance on paper.
In fact, beginning last year he stopped sending hard-copy invoices
to customers in favor of electronic versions. Clients would either
receive them via e-mail or have the option of downloading a pdf
document from Spa Parts Plus’ Website.
“The cost of mailing it was phenomenal,” he says,
“so we saved on labor, postage and paper.”
That philosophy has filtered through to the warehouse level as
well, Knickerbocker says, where pickers are now directed through
their routes by handheld wireless devices that are
Email has also helped Appatek Industries in Concord, N.C., reduce
its own postage-related expenses. In the past, the company mailed
its customers three-ring binders with the brands it carried and
their catalogs, as well as Appatek’s pricing. But today that
information is sent electronically, says chief operating officer
Still, Appatek hasn’t abandoned the personal touch, as
evidenced by its policies that now govern accounts receivables.
Within a week of the due date, a dedicated staff member now
contacts customers with, as Miranda describes it, “a friendly
phone call, though it may be more of a prodding at
The result has been a marked decrease in past-due accounts —
about 5 percent in the 30- to 60-day range, and 2 percent for more
than 60 days, Miranda says. Prior to the change, those numbers were
doubled, he adds.
For distribution companies nationwide, evidence of this “new
normal,” as Kent put it, are everywhere. Tightening belts,
however, must never conflict with customer service, particularly in
such a competitive environment.
At Baystate Pool Supplies in Cambridge, Mass., president Charles
Arakelian rattles off a laundry list of new initiatives aimed at
streamlining costs: bar-code scanning, more conveyor lines to save
on labor, renegotiating with freight companies, a reduced work
week, and more.
“There’s really only so much you can cut,”
Arakelian says, “because we pride ourselves on always being
able to meet our customers’ needs.”