New Frontiers with United Pipe & Steel
The scenic roads through Ipswich, Massachusetts, wind among the beautiful fall foliage and deep tradition of New England. So when I visited the area in late August, I was thrilled to meet with industry friends at United Pipe and Steel. This logistics-based master distributor services wholesalers exclusively with steel, copper, plastic, and electrical pipe and conduit products across 45 states, from 11 distribution centers.
For the past two years, the company has placed a lot of time and attention into enhancing the customer experience while building a scalable platform through a number of significant investments. The main four are IT, fleet, people, and geographic expansion. Their senior leadership team was excited to share with me the objectives and details around each key area of investment. The expertise and passion that this team radiated was contagious, and I left Ipswich with a keen desire to follow this company’s future, with baited anticipation of even more exciting things to come.
Epicor’s Prophet21 platform provides the foundation for United Pipe & Steel’s technology investments, and implementation of the new system was a process that took them over a year from start to finish. Those who have implemented new ERP systems know that it’s somewhat akin to changing a tire while travelling down a highway. Well, for this team, that car was going at excessive speeds because, right in the middle of their implementation, the company still managed to open their 11th distribution center, in Rialto, California!
Since going live on the new system in November 2015, they’ve added building blocks such as a transportation management solution, Roadnet, and a business intelligence solution, MITS.
As Lee Goldman, the company’s director of IT explains, “With our old system it was tough just to get the data to understand business drivers in a timely manner. With P21, we have information at our fingertips.” Bringing on the new ERP has provided the company the flexibility to understand and identify issues and opportunities quickly, and react to impact the business in a positive manner.
“We are a world-class distribution and logistics company, and visibility into the dynamics of our fleet and our inventory are critical to allow us to identify customer trends and meet their needs,” remarks President/CEO Greg Leidner. “Take companies like UPS or FedEx. They are great companies because they invest in technology that gives customers access to delivery visibility each step of the way.” Leidner had a customer call him that morning asking, "Where's my delivery?" He was able to log onto the Roadnet system, track down the truck that it was on, see exactly how many stops were on the truck, and know that it had already gone to the first stop. It was running about 15 minutes ahead of schedule, and Leidner was quickly able to let the customer know, ‘It's on the road. It'll be there at 11:15am.’ That's a remarkable ability to be able to communicate to customers and provide that dependability that they count on when they order from United Pipe & Steel.
“This program is making all the data real-time,” says VP of Operations Jon Renko. “When the customers can call up they can give them an exact ETA from where they currently are.” It's allowing United Pipe & Supply to speed up the billing process, too. “It's allowing us to capture errors at the time of delivery and make those adjustments so the customers are getting invoiced correctly the first time versus going through the billing process,” explains Renko.
Roadnet uses advanced algorithms to route the trucks most efficiently. “We're expecting a 20 percent reduction in fuel costs as a result of that,” points out Renko. That is a huge win for the company based on the large size of the fleet they manage and the more than 6 million miles driven per year. Before Roadnet, that knowledge had been based solely on the knowledge of the company’s distribution center managers, who had been drivers for them in the past. “They knew the customers. They knew the stops. They knew the product. Now we're institutionalizing all of that data into the system,” stresses Renko. Now, the managers are spending their time managing, coaching, and working to ensure a safe and productive environment.
In the high volume, low margin business of pipe products distribution, this type of innovative cost saving is part of what is going to propel the company to be a viable partner for suppliers customers over the long run. But cost savings are good only if they are in conjunction with adding value to United Pipe’s customer experience. The feedback from customers has been that knowing when to expect their deliveries is something that has created enormous value for the company’s loyal customer base.
Another important focus of the company is focusing on developing their own employees. One of the most novel ideas United Pipe & Steel has implemented is the creation of a professional development track for Warehouse Associates, the employees who operate forklifts to break lifts and rebundle orders for customers. United Pipe has developed a program to pay for forklift operators to train for and obtain their Class A driver's license and then ultimately become a driver for the company, which in essence is breeding their own cadre of drivers.
United Pipe & Steel fills an enormous gap in the wholesale distribution supply chain — trucking. Manufacturers of pipe are manufacturing experts. But they rely on outside carriers for distribution. Speaking to many manufacturers in the business, they say that obtaining reliable flat bed trucks is an issue, for two reasons. First, flat beds represent only 10% of trucks. Second is the demographic trend, whereby a lot of the drivers are baby boomers retiring and companies are struggling to get millennials into those careers. “By us continuing to make an investment, we’re continuing to fill this real void in the marketplace around trucking and shipping.”
In addition to their modern tractors, United Pipe & Steel has upgraded their trailer fleet as well. Specifically, the company has commissioned several Conestoga flatbeds — a soft-sided trailer that can retract, so they have the functionality of a flatbed but does not require the tarping and the heavy lifting usually associated with open flatbeds.
“When we talk to drivers to recruit them to come to United Pipe, we articulate not only the fact that they can sleep home every night” explains Leidner, “but also we also tell them all about the type of vehicle that they’ll be driving, and it gets them extremely excited.”
When it comes to geographical expansion, nobody does it better than United Pipe & Steel. Since 2006, the company has opened up nine new greenfield markets, most recently opening a 105,000 ft2 distribution center in Southern California. From their newest facility, they are shipping to customers in Northern California, Nevada, Arizona, and of course the massive Southern California market. The minimum order quantity is only 5,000-pounds on the West Coast, and “You can mix and match any of the products we sell to get to that minimum,” points out VP of New Market Noah Heller. “Copper tube, steel pipe, ABS Foam Core, SH40, PVC, strut, threaded road, etc.” Heller quarterbacks all of the west coast expansion for United Pipe & Steel. When Heller began at the company over five years ago, they were opening up their seventh warehouse in Texas. Now, they’ve expanded into California and are looking into other opportunities.
VP of National Accounts Michael Blair began his work with United Pipe & Steel when they were just opening their second facility in Easton, Pennsylvania . “I started to approach the subject more in terms of taking our model on a national scale and increasing our geographical expansion on a little bit more ambitious schedule,” he recalls. Michael is probably the best known of all of United Pipe & Steel’s salespeople. “He’s like air,” exclaims one of the VP of Vendor Relations for a key national account. “Michael’s just everywhere!” Blair’s philosophy is that it’s absolutely critical to get to know people – understand their business, their needs, their strategies. Only then can we even begin to articulate how the United Pipe & Steel business model can help them with their efforts.
Another key member to this expansion project at the company is VP of Sales Corey Lowsky. He’s been with United Pipe & Steel for six years and notes that every one of those years, they’ve opened a new DC. “Opening new facilities is something we do incredibly well. Michael, Noah, and I go out and visits those customers and really get a sense for the customer base and their unique needs that we can help service. Then we stock up with the right products, and our delivery model and package of products helps solidify our entry into new markets,” notes Lowsky.
“Getting product out to the west coast from east coast vendors takes two to three weeks if the manufacturer has it in stock,” explains Leidner. “By us having local inventory, it compresses that time frame and adds significant value for the customers, the wholesalers. Wholesalers can better deploy their working capital, and reduce their risk on commodities. Importantly, they can rest assured that they can take sales from their customers, and know they have the inventory to back it up.”
The company will continue to execute on its geographic expansion plan, in a measured, deliberate fashion. Developing relationships is the cornerstone with United Pipe & Steel. They want to remain dependable, reliable, and above all be a one stop shop that adds value both for wholesalers as well as for suppliers. For me, I’m going to look forward to returning to Ipswich, Mass. for more opportunities to bask in the brisk New England fall weather, and track the updates from this exciting and forward-thinking organization.