Eastern Industrial Supplies Inc.
is inducted into Hall of Fame
Editor’s Note: This is the Eastern Industrial Supplies story, as told by the Eastern management team.
Seizing an opportunity in 1980 to start a new company, three partners broke away from an existing competitor to launch Eastern Industrial Supplies, Inc. – today known as Eastern, headquartered in Greenville, S.C. With a steadfast look to the future, the company began to grow in size and reputation as a PVF and plumbing distributor. Since then, Eastern has built 12 operating locations throughout the Southeast.
Kip Miller, president and CEO since 1987, was hired six months after the launch of the company. Starting in the warehouse receiving and shipping material, he quickly learned the business from the bottom up and was soon working inside sales. “It was an opportunity I never could have imagined,” Miller said. “Upon graduating from college, I entered a tough job market and wound up working for the Census Bureau, taking on odd jobs to make ends meet. My initial interview with Eastern was for a position they weren’t looking to fill for another three months. Imagine my surprise when the company called and asked when I could start. I knew then that the Lord had answered my prayers.”
To accommodate the need for more space, Eastern built its first new building in 1982. Over the next few years, the company continued to steadily grow, becoming known for its inventory and quality customer service. In the fall of 1985, Miller was named vice president and placed in charge of the entire sales division. These important steps allowed Eastern to become more profitable and established an opportunity for Miller to learn other aspects of the business.
“The owners of Eastern were great mentors for me when it came to running a business,” said Miller. “They provided me with valuable tools for successfully owning and maintaining such an organization, and I began thinking of how I would handle situations, if ever allowed to be the boss. Overall, it was a tremendous experience I’ll always be grateful for.”
An unexpected turn
Tragedy struck the young company on New Year’s Eve 1986 when then-owner George Bagwell suddenly passed away. The succession plan he had created offered Miller, through a Buy/Sell agreement, the opportunity to purchase the majority of company stock and to assume leadership – a step that left an indelible mark on Miller and one that would seriously influence his career path just a few months later.
During this time, a major Eastern competitor was heavily recruiting Miller. They had presented him with a very attractive offer that he was praying over and evaluating that very same New Year’s Eve night, as he was expected to provide an answer within a short time frame. “I was rocking my newborn son to sleep that evening when one of the minority shareholders called to say that ‘George had died, the company was mine, and that he’d see me next week.’ I wasn’t over the shock of George’s death before realizing I had some very important decisions to make and very little time.”
Prior to his death, Bagwell had announced his succession plan to the organization and its shareholders, stating emphatically that should something happen to him, Miller was his choice to take over the role of president/CEO, and he expected that staff and associates would stay with the company and give Miller their full support.
“It was the memory of this meeting that really solidified my position,” Miller noted. “I was tasked with ensuring that George’s estate, the company, its customers, and its associates and families were taken care of, and I knew in my heart that I would stay. I raised my salary just enough to cover the debt payments incurred with purchasing George’s stock and made no more money over the next several years, as I concentrated on growing the business and caring for our associates and customers.”
Miller slowly began to implement a three-point plan to help Eastern modernize its operations and establish a means for future growth:
• Point one was to purchase and implement a new computer system that could handle all elements of the business including inventory, sales and keeping accurate financial records. This system also needed to handle multiple locations, as one of Miller’s long-term goals was to establish other branches.
• Point two was to secure a location that could serve as Eastern’s home branch and central operating center. In 1993, land was purchased for the site that still serves as the Greenville branch today.
• Point three was to establish a second location. The Anderson, S.C., branch was opened in 1995. “We knew we needed to and wanted to expand but also understood that we’d never operated remotely, and an adequate test facility was necessary before spreading ourselves too thin,” Miller explained. “Anderson allowed us to learn how to operate a branch while maintaining our high level of service and care for the customer.”
Since then, through a combination of organic growth and acquisition, Eastern has opened 10 other branch locations – Florence, S.C. (1998); LaGrange, Ga. (1999); Jacksonville, Fla. (2000); Spartanburg, S.C. (2003); Charlotte, N.C. (2004); Asheville, N.C. and Huntsville, Ala. (2006); Buford and Atlanta, Ga. (2007); and Charleston, S.C. (2008). This large footprint provides product to some of the most recognizable contractors and manufacturing facilities in North America.
Other key business decisions during this time of expansion enabled Eastern to grow and prosper. In the mid-1990s, Miller realized he needed a strong support structure in place that would allow him to care for company associates and customers in a manner that reflected his principles of dedication, devotion and family loyalty. He began building a team that would enable him to focus on his strengths, while providing top-of-the-line customer service — a quality that was quickly becoming one of the hallmarks of the Eastern brand. Today’s corporate management team, representing many years of knowledge and experience in the industry, includes:
• Kim Miller, executive vice president
• Alyn Judkins, vice president-procurement
• John Snover, vice president-operations
• Richy Milligan, vice president-sales and marketing
• Robby Davis, vice president/CFO.
In 1998, Miller hired a consultant and initiated the first strategic planning process Eastern had ever engaged – out of which came the company’s “success plan” that is updated by the staff annually. Ultimately, this strategic planning effort provided a much needed road map that resulted in a smartly planned and timed business expansion.
Additionally, in the late 1990s, Eastern joined The Piping Connection, a buying and marketing group that provided the company increased purchasing power, subsequently allowing it to pass along better pricing options to its customers. Soon after, The Piping Connection merged with a larger group, C.L. Watt. Miller was president of The Piping Connection at the time of the merger, which provided him with a position on the board of the new entity. Then in the early 2000s, C.L. Watt merged with Affiliated Distributors (A-D), and his role with C.L. Watt afforded him a seat on the PVF board at A-D. “We’ve had a tremendous ride with these organizations,” Miller explained. “We were trying to build our own vendor incentives program when we first joined. These memberships allowed us to forge deeper relationships with select vendors, and these partnerships provided deeper purchasing power. Plus, being a member of Affiliated Distributors has been an invaluable educational tool. Its roundtable discussions and networking opportunities have taught us many crucial lessons from our peers about this business.”
Eastern currently employs 155, and its key PVF vendors include Anvil, Apollo, Bell-O-Seal, Felker Bros., Georg Fischer, Howell Metals, Matco-Norca, Milwaukee, Nibco, Norca-Industrial, Silbo, Warren Alloy. Purchasing is centralized; however, as Miller explained, “Our distribution and replenishment is neither centralized nor decentralized, with no predetermined rules other than wholly supporting our key vendor partners and driven by how best we can service the customer.”
PVF accounts for 80% of the company’s product mix; 65% of Eastern’s business is commercial/ mechanical with the remainder being in the industrial/MRO market. In addition, Eastern offers vendor-managed inventories, pipe cutting, threading, grooving, quarter-turn and linear valve automation, and a 24/7/365 national emergency Watts line.
It is evident that Eastern leadership has made wise and astute business choices over the years – from hiring practices, to expansion plans. Bagwell knew what he was doing in 1986 when he identified Miller as the future of the company. But Miller will tell you, with a heartfelt sincerity rarely seen in this modern age of business, that there is another force responsible for his personal and professional success. A man of deep faith and solid commitment to a value system many take for granted, Miller has allowed his Christian faith and the honesty and integrity instilled in him to be a driving force in the planning and success of Eastern.
“I have to go all the way back to high school to really talk about my path to Eastern,” he explained. “I was much more interested in girls and baseball than making good grades, but I knew I needed a college education. I watched my father work hard in his own business field my entire life and wanted to emulate him in many ways. At the time, gaining entrance to what was then Anderson Junior College required the applicant to write an essay on why you should be accepted to the school. I wrote mine on becoming a Christian businessman. Somehow, they let me in, where I continued to debate whether to join the ministry or move into the business world. After completing the two years at Anderson, I went on to get a B.S. in Management and Marketing from the University of South Carolina, and then returned to the Upstate of SC where I was ultimately hired by Eastern.”
A life lived by Christian principles, 30 years in business and eight years totally invested in Eastern Cares (see sidebar) have helped create an organization that is not only profitable, but thriving in a way that can’t be measured with net receipts and sales figures. It is the basis for Eastern’s future and what has led to its long-range vision, appropriately titled PVF150 — People, Values and Faith. It is the belief that by making people and values a priority over profits, with an abiding faith at its core, the company will become a $150-million annual enterprise within the next five to seven years.
In 2006, the corporate leadership began a 360° peer review process to determine if the team was working to its full capacity. They learned that the workload could be better shared based on a deeper understanding and appreciation for individual strengths and abilities. From this, Miller put together an inverted organizational chart – with the executive team placed at the bottom – that would leave many questioning his logic. But to Miller, it was simple: “As the leaders in our company, we exist to support the other team members and associates, enabling them to do their jobs and to serve both our internal and external customers. It only makes sense to reflect this structure of support in a way that clearly demonstrates this message.” From this process, Miller spent the following year casting the PVF150 vision. He made branch visits and implemented associate and customer surveys to ensure the success of his mission by adequately caring for the company.
Even in these tough economic times, each branch is in the process of preparing a five-year strategic plan directly in support of this goal based upon the PVF150 philosophy. These plans will allow smart and timely growth as Eastern continues to prove that its business model, while it might be viewed as unconventional, is most definitely successful.
“This is who we are and this is how we operate,” said Miller. “We never push our beliefs on anyone; we are convinced that our core values are the key to our success. We understand that living out deeply held values sometimes comes with a price. Our associates are committed to taking this risk.”
Rooted in faith
“One thing that’s been constant in my life – something that rings true now as it did 30 years ago, in my personal as well as professional experiences, is that I’ve never met someone who didn’t want to be cared for,” noted Kip Miller. It is this deep-rooted understanding that helps explain the difference at Eastern and what an impact its caring philosophy has made in the lives of so many people. As the company began to expand, one of the chief concerns from associates was that Eastern seemed to be losing its small, family-focused atmosphere. Miller began researching ways to recapture this important element. He attended a “Business by the Book” conference on how to implement biblical principles into the workplace. It was here that he realized he’d been concentrating on what not to do as a Christian businessman and needed to focus instead on what proactive steps he could take. Soon after, a customer introduced him to the concept of workplace chaplains. Miller was inspired by this idea and in the early 2000s, Eastern partnered with Marketplace Chaplains USA to provide all branch locations with chaplains who serve at no cost to the associates and their immediate families. This confidential, complimentary service was first introduced as the Eastern Industrial Cares Program; however, Miller wanted to expand that to care for the communities around them, which led to the launch of Eastern Cares in 2002.
Eastern Cares (www.easterncares.org) was established to exhibit profound care for people with the ultimate goal of having a positive impact upon the lives of others not only within the Company, but also within its Communities, the Country and other Cultures around the world – what Eastern calls the four “C’s” of caring. Associates remain committed to the program’s central tenet of offering helping hands of service, concern and compassion for others in need.
One of the key components of Eastern Cares is its associate-sponsored emergency fund, established to provide associates with financial support in times of personal crisis. Other aspects include assistance for those looking to further their education and training, scholarships for college-bound children and grandchildren of associates, adoption assistance, and marriage seminars. In addition to providing chaplains in the workplace, Eastern partners with Teleios Services (www.teleiosministry.org) in giving associates access to a financial management specialist to assist them with planning for the future.
Eastern demonstrates care for its communities by participating in local blood drives, supporting rescue missions, youth homes and children’s shelters. It demonstrates compassion on a national stage through participation in various health and wellness-related fundraising endeavors, as well as support for Samaritan’s Purse, Special Olympics and sending care packages to U.S. troops serving abroad. Care for other cultures is exemplified through its Missional Program supporting associates with non-vacation, paid leave to take part in special projects – some locally within the branch communities, some throughout the U.S., and some around the world. Associates have led business conferences in Romania, served the needs of others in the Dominican Republic, Peru, and Kenya; and continue to provide special care to the orphans at the Daily Bread Life Children’s Home in Tanzania. These and other projects are part of the company’s yearly strategic planning process.
As Miller explained, “Eastern Cares is Eastern’s brand. It is the heart of our company, the way we do business. It provides the standard for our core values of honesty, integrity, caring, self-responsibility and being positive. This is how we strive to live and work each day with everyone whom we come in contact. I believe it is how we’ve managed to stay profitable during these trying economic uncertainties. It’s been hard, as we’ve watched many friends and competitors struggling in this economy. We’ve certainly had to make some tough decisions of our own, but I believe that these core values and what they mean for our ‘second-mile’ customer service and our commitment to exceeding customer expectations have helped make all the difference.”