Balancing autonomy and scale, while not always easy, has led to success.

With 17 locations in six states (Oklahoma, Texas, Florida, Missouri, Arkansas and Nebraska), Dave Settles, president of Weldon Parts, has his work cut out for him. However, Settles prefers to look at differently.

“The benefits are that it rounds things out,” he says. “When things get ugly in Florida, there usually is something going on in the oil patch. Or if grain is down in Nebraska, generally timber is up so we can cushion the blows.”

Daryle Settles, vice president; and David Settles, president

Settles says that managing multiple-locations today is not as hard as it used to be. “You’ve got Internet connections where you can keep track of everything and you have email. When we started this business, email wasn’t around and now you can do voice over Internet protocol.”

He adds, “The main thing you have to do is make sure the people in the stores are good enough so that you don’t have to constantly be there.”

Settles says Weldon is “intensely customer oriented.”

He adds, “I am sure everyone says that. You are not going to be around long if you aren’t. But it is a matter of bringing your own individual culture to the business. I think at this point we have a very good culture and everybody works well together.”

To effectively manage such a diverse business, Settles needs to balance autonomy for his managers with the benefits of scale.

“This is a constant battle,” he says. “We have procedures that everyone has to follow. You do your cash box the same way and you replenish the same way.”

Each Weldon Parts location has its own profit and loss statement. “So when it comes to what is the product mix or what is the delivery schedule, you can take that all back to profit and loss,” Settles explains.

“It is a constant battle and we talk about it all the time,” he says. “You have to have the line between freedom and chaos and I am not sure we always tow it well, but that is what you are after.”

Branch managers run each Weldon location, but Weldon also has several managers who are not attached to a particular branch.

“They help with sales or operations. We have one that is over the brake shoe rebuilding operation,” he explains.

Weldon Parts’ 17 locations operate with their own profit and loss statements while adhering to some standard operating procedures.

“But when they come into a town, they are working for the branch manager. The branches are the profit centers and those other managers are there to back up the branch managers.”

Growing beyond 17 locations is not out of the question for Weldon. “We enjoy expanding. Even though the last four locations were easy.”

Earlier this year Settles merged with other stores in Nebraska that were run by his cousins. “You have to make sure you do not over-extend,” he says.

While Settles currently has no timetable for expansion, he says, “When it feels like we are ready to do it something comes up.”

People play an important role in Settles’ expansion plans. “When we are expanding organically, it is totally about people. If you have the right guy to run a store you can find a place where he fits,” he says.

Other expansion decisions are based on a combination of geography and the staff you are getting when you make a purchase, Settles explains.

“In some cases we get feedback from manufacturers who tell us ‘We could use some help there.’ or ‘That is a pretty full town, I don’t know why you would want to go there.’ This is helpful information,” he says.

“But in the end it always boils down to people. We put a lot of responsibility on our branch managers and if you have one and you think you can make (expansion) work, you go for it. If not you take a pass.”

While attracting people seems to be an industry-wide problem, Settles says at least at Weldon, things have improved in that area.

“A lot of it is referral from people we already have working for us,” he says.

“If you look at the ages of people in the company, we are like everybody else. We are loaded with 40s and 50s and then we have a huge gap of 30-year-olds. I don’t know what happened to that decade.

“But we have some people in their 20s who we look at and say ‘this could work.’”

Settles has a unique philosophy when it comes to his sales staff in that he is less concerned about making “the big score” than some of his competitors are.

“If I have a salesman, I’d rather have him make five calls today on middle-sized companies who we might get business from than to go back every day to the same big fleet that everyone else in town is after.”

This line of thinking parallels with Settles’ view on the increasing sophistication of trucks.

“I see that as a huge opportunity. You want to be the guy who, for whatever reason, when you walk in the door the customer is glad to see you.”

He believes with smaller customers this is more likely to be true. “If you bring them some kind of value added beyond this week’s special, you are way ahead.”

To be able to do this, Settles says he works hard to keep his staff up to date and educated. In fact, Wegldon has an employee responsible for training and education at all locations.

“He does a lot of it online, because we are so far flung,” Settles says.

The training manager picks a supplier who has a new technology or product and schedules five or six training sessions over a period of a week for all employees.

“If someone gets intrigued with something, we let him go a little deeper and learn more. You always will find some people like that,” he says.

For now, Settles is comfortable with where things are. “I think the business seems more stable,” he says.

“I don’t think we actually are on a roll yet but it seems a little more predictable. We are a little more confident than we have been.

“Down the road it will come down to people and I am pleased that we have some young people here to help carry us into the future.”

Name of Company: Weldon Parts

Headquarters Address: 711 W. California Ave.

Oklahoma City, OK

Web site: www.weldonparts.com

Founded: 1957

Owner(s): David Settles, president and Daryle Settles, vice president

Number of Locations: 17

Number of Employees: 125

An extensive parts inventory, hourly delivery and on-line parts ordering have led to growth.

Tidewater Fleet Supply positions itself as a one-stop shop for its large fleet customers. According to Allan Parrott, president, they are able to achieve this by stocking 130 different product lines, ranging from light-duty lines to heavy-duty.

Tidewater Fleet Supply’s management team (from left): Scott Schriner, Roger Weber, Mike Hill, Allan Parrott, Randy Turlington, Fred DeLaCruz, Lee Williamson and Bill Megginson.

The sales staff is trained to sell the full range of Tidewater products, although Parrott says, “Some guys are more proficient than others on heavy-duty and vice versa, but every day they have to sell heavy-duty and light-duty products.”

The fact that trucks and equipment are becoming more sophisticated and that technology is becoming more complex adds to the challenge of providing the right part for the customer.

“I think the ability to stay current with technology is going to be very important in the future,” Parrott says.

In order to ensure his sales staff stays abreast of market developments, Parrott sends his counter staff for training as often as possible. “Some manufacturers continue to offer training, and we have had good success with hosting technical training seminars for our customers.”

Training courses have covered a range of subjects including heavy-duty brakes and batteries. “The ability to help train your customers is a great service you can provide,” Parrott says.

Another service Tidewater provides is hourly delivery to its customers. “We run hourly delivery to probably 80 percent of our customers,” he says. “Customers get deliveries nine times a day starting at 8 a.m. and going until 4 p.m.”

Parrott feels customers have reduced the amount of inventory they carry and are depending more on distributors to get them parts quickly.

“A good delivery service seems to be a real important part of the business. It is something we have spent a lot of dollars on,” he says. “We have a lot of money in our delivery vans and the personnel to deliver parts. I think it is something that sets us apart. Most of our competitors don’t offer delivery as frequently as we do.”

Another niche Parrott has carved out for Tidewater involves contract work with municipalities. “We won our first contract in 2003 with the city of Chesapeake, Va., which at the time was a good account for us,” he says.

Operating out of eight locations in Virginia and North Carolina, Tidewater Fleet Supply sticks to its core mission of having parts on the shelves and knowledgeable people selling them.

The city had been a regular parts customer when it announced it was going to put its parts management operation out for bid. In effect, they were soliciting companies to come in and run their parts room for them.

Parrott realized that if Tidewater did not bid on the work it would lose a big customer. “We looked into it and the more we looked, the more we felt like we could handle it.” That was the first bid Tidewater won and things have evolved from there. Today it offers the same service to other municipalities and some large corporations.

In order to make sure employees feel connected to Tidewater, Parrott treats each of these operations as if it were a branch. “It is a different kind of situation for our people because they really only have one customer. Obviously they are not selling to the general public but we still treat them as a branch with a branch manager and assistant branch manager.”

Parrott says he and other managers visit these municipal operations on a regular basis. We sell the same kind of parts and try to give the best level of customer service that we can. The day-to-day mission is consistent with what we do with all of our customers,” he adds.

Online ordering is yet another convenience Tidewater offers its customers.

“We started our online ordering system in 2007 and it has grown every year. Today Tidewater receives about 600 to 700 orders a month through its online option.

“We are up to about 600 users and these are all active accounts,” Parrott says. “This is not the general public. They all have to have a user name and password.”

When customers log on, they can do a lot of things including see their invoices, see how much they owe on their account, do parts look up and place orders online.

“When they place an order, the pick ticket goes to the Tidewater warehouse that they gets their parts delivered out of,” he says. Tidewater has eight locations in Virginia and North Carolina.

The impetus for going to online ordering came from the light-duty side of the business. “It is something that definitely has been used more on the automotive side,” Parrott says. “The company we get our operating system through had a number of customers who were having success with online parts ordering, so it seemed to make sense for us to try it.”

Growth is part of Parrott’s future plans. “I think we will continue to see opportunities for municipal contracts because municipalities really are stretched thin and are looking for ways to save money.”

He also is willing to look at expansion into new locations. “We added Richmond in 2008 and I expect that we will get some new markets in the next couple of years. And of course there are additional product lines. We always are anxious to add lines that we think are a good fit for our customers.”

While Parrott acknowledges the economy has been tough and put pressure on businesses to provide service, he says Tidewater has done well. “Focusing on our core mission of having inventory on the shelves, people who know those parts and a fleet to deliver those parts, has helped us.”

He adds, “The 12 years that I have been here we have grown every year and we have been profitable throughout the downturn. We never had any layoffs. I think we have managed to weather the storm pretty well.

“We have a lot of really good employees here who make that happen on a day-to-day basis. I was very fortunate when I started here because we had a lot of people that had been here for years and years,” he says.

“They helped train me and helped educate me about the business. A lot of those folks stuck around and they are a huge reason why the company continues to grow.”

Name of Company: Tidewater Fleet Supply

Headquarters Address: 1324 Lindale Drive

Chesapeake, VA 23320

Website: www.tidewaterfleetsupply.com

Founded: 1953

Owner: Allan Parrott, president

Number of Locations: 8

Number of Employees: 90

Reorganizing has made this business better, stronger, more efficient and poised for future opportunities.

Recently adopting the philosophy that you should run your business on systems rather than personalities has helped John Bzeta, Fleet Brake president, position his business for the future.

John Bzeta, President

“If you don’t adequately analyze your business and look at what the functions of people are supposed to be, then the business typically will rely on what I call good people or personalities,” he says.

Bzeta says he learned this lesson the hard way when a key person announced he was leaving the business — in part because he felt he was always being called on to do the tough jobs.

At that point Bzeta took at close look at how Fleet Brake was operating and realized that work was being piled on to good employees because they were the ones who got things done.

“So if someone needed inventory control done or something needed to be done in accounts receivable for example we used to say ‘Oh we will just get Jim to do it,’” Bzeta says.

“And soon Jim had more and more responsibility piled on him.”

Bzeta discovered that these good people were becoming overwhelmed with the amount of work they had to do.

While the loss of a key employee was the impetus for the reorganization, Bzeta says he now is analyzing how each aspect of Fleet Brake works and the responsibilities and roles required to get tasks completed.

“This has taken a lot of pressure off our good people and put them into a system,” he explains.

Bzeta believes this process has made Fleet Brake a better, stronger business and has increased its efficiency.

“Surprisingly the response from the staff has been incredibly positive,” Bzeta says.

“When I first implemented it I was concerned that employees would think we were becoming a bureaucracy.

“But business owners need to realize that people want order, structure and accountability in their workplace.”

Bzeta also has changed the way he looks at technology. In the past he says that he, like other distributors, ran his business based on how their business system worked.

Today he has created systems and procedures around the business system to fill in the holes not covered by the business system.

“There are things that you need to operate your business and they need to be built outside of the business system,” he says.

“As an example, we have taken data from our business system and put it into workable reports so that we can more effectively manage our business.”

Bzeta sees technology as an enabler. “All it does is help you run your business better, to create better reporting, better accountability of your staff — not just to manage them, but to empower them so they can do their jobs better.”

Fleet Brake is a diversified business with parts distribution, drive-in service at eight of its 14 location and remanufacturing at two locations. It also operates a driveline facility.

This systemization allows Bzeta to manage a very diverse business and to act as a true fleet specialist.

“We have parts distribution in our network. We have service capability — both mobile and facility based. We have OEM sales.

“We produce suspensions and other components for OEMs. And we also sell some trailers as part of our network.”

Fleet Brake offers drive-in service at eight of its 14 locations and has two remanufacturing centers where it does brake remanufacturing. It also has a driveline facility at one location.

The fact that Fleet Brake’s customers have a diversified fleet of equipment also helps the company to operate as a true fleet specialist.

“I describe us almost as a broker. We make it so that our customers do not have to call 50 places to solve his problem,” Bzeta says. “What we try to do is specialize on the fleet which means we are trying to help him broker all the information together.”

This means if a customer has a Freightliner truck, a trailer, an automobile and a fork lift, Fleet Brake will come up with a solution to whatever problem that fleet is having.

“We have found that is our value added and our place in the heavy-duty industry,” he says.

While Bzeta admits his staff may not be experts in all areas, he says they have enough general knowledge to find someone within Fleet Brake or from outside to provide the customer with the answer he is looking for.

Part of that expertise includes having parts available.

To ensure that Fleet Brake has what Bzeta calls “unmatched parts availability” he has established several supply chains.

“We have direct supplier relationships. We are part of buying group — automotive, heavy-duty and industrial,” Bzeta says.

“We have direct OEM relationships. We also have partnership agreements with our OES partners.”

Bzeta says HDA Truck Pride has been an invaluable partner especially as it helped Fleet Brake set up adequate, stable and secure supply chains for products to its customers.

The future is full of tremendous opportunities, according to Bzeta.

“Because the nature of our customers is changing and growing rapidly along with technology and the diversity of equipment, the solutions that are required for the future present a tremendous opportunity for the independent aftermarket.”

He adds, “Vehicle technology solutions are so diversified that our customers need a specialist who can wade through all the information.

“It is a full-time job deciphering what is coming out and our customers are supposed to be focusing on their core business. So the opportunity for Fleet Brake moving forward is tremendous.”

He adds, “You have to take yourself seriously, believe in yourself, have systems in place and couple that with the fact that we care and have our heart in this business.

“With all that, any of our competitors will have a difficult time dealing with us,” he says

Bzeta adds, “Our position within the heavy-duty aftermarket is going to become more important over the years and the need and value we provide is going to continue to grow.”

Name of Company: Fleet Brake

Headquarters Address: 7707 54 Street SE

Calgary, Alberta, Canada

Website: www.fleetbrake.com

Founded: 1978

Owner: John Bzeta, president

Number of Locations: 13

Number of Employees: 300

The Tenth Annual Truck Parts and Service Distributor of the Year Award

Ten years ago Truck Parts & Service embarked on a program to recognize the best in heavy-duty truck parts distribution. The award continues to stand as the independent aftermarket’s most respected and highest honor.

This year’s nominees for Distributor Of The Year are the top performing distributors, as chosen by their peers, representatives from parts suppliers and manufacturers and other industry leaders.

This year’s finalists maintained their performance through the tough economic times and are continuing to be successful as the market slowly comes back. They do this by keeping a strong focus on the cornerstones of their business, while identifying and taking advantages of market opportunities.

Beginning in the June issue and running through the September issue, Truck Parts & Service has revealed one finalist each month through question-and-answer style articles, which are available online at www.truckpartsandservice.com.

In this issue, we profile all four distributorships taking a more in-depth look at what makes them unique. We also explore their best practices and what they do to keep their competitive edge.

* Please join us in congratulating this year’s finalists:

* Tom Stewart, president, Carolina Rim & Wheel, Charlotte, N.C.

* John Bzeta, president, Fleet Brake, Calgary, Alberta, Canada

* Allan Parrott, president, Tidewater Fleet Supply, Chesapeake, Va.

* Dave Settles, president and Daryle Settles, vice president, Weldon Parts, Oklahoma City, Okla.

The winner of the 2011 Truck Parts & Service Distributor Of The Year will be announced during Heavy Duty Aftermarket Week in Las Vegas, Jan. 23-26, 2012.

A wide breadth of inventory and knowledgeable salespeople make the difference.

Carolina Rim & Wheel has been family-owned since 1926. Current president Tom Stewart is quite proud of that fact because he says it gives the distributorship some flexibility to react to customers and market changes.

One way the flexibility manifests itself is in the way the business has changed over the years.

John MacClements, vice president; Patricia Stewart, chairman and secretary; and Tom Stewart, president.

Originally heavily automotive and, as the name implies, a rim and wheel specialist, Stewart says the business has evolved into “purely heavy-duty and small trailer.”

The scope of Carolina Rim & Wheel’s product offering has expanded well beyond rims and wheels. “We have about 110 different product lines most dealing in underframe, brakes, suspension, axles, air compressors, filters, drums, etc.,” Stewart says.

This is one of the things that Stewart believes makes Carolina Rim & Wheel unique. “We carry a good breadth of inventory where others may only concentrate on higher volume items.”

To supplement the extensive inventory, Stewart says he has an extremely knowledgeable sales force.

“They spend a lot of time building relationships with customers. I think that is very important for our business — to strengthen our relationships with the customers so we are not just a place where you can get a part at a price,” he says.

“We don’t think price is everything, although you obviously have to be competitive in this market. But our customer service and our knowledge of their needs is what our strength is.”

That customer base “is all over the place,” Stewart says.

“We work closely with construction companies, dump companies, a lot of repair facilities, and we deal with small local fleets,” he says. “We also have some small OEM contracts that we deal with mostly on the trailer side.”

In addition, Carolina Rim & Wheel does a significant amount of business with government agencies in North Carolina, South Carolina and Georgia.

Carolina Rim & Wheel is headquartered in Charlotte, N.C. with additional locations in Fayetteville, N.C., Columbia and Charleston, S.C. and Suwanee, Ga. It has been family-owned since 1926.

“A lot of it is work where you bid on multiple product lines for sale to the state,” Stewart says. “If you are awarded those contracts for that period of time, you supply them with the products they need.”

This type of work is not without its challenges. “You really better know what you are doing otherwise you will get in trouble in a hurry,” Stewart says.

The issue with contract work is that it has a lower margin, so Stewart says you have to look closely at the volume and ask yourself if you can “turn and earn on this line.”

You also need to be familiar with proper procedures in order to be paid in a timely manner. “For a lot of municipalities, if everything matches up, you normally get paid on time, but if there are issues, you can have a big problem with payment.”

Stewart says Carolina Rim & Wheel has enjoyed success with its government contracts over the last 20-year when it landed its first contract with the state of North Carolina. “The product mix has changed over the 20-year span, but we have maintained that contract and added others,” he says.

Another thing that has helped Carolina Rim & Wheel succeed is its affiliation with Vipar Heavy Duty. The distributorship was one of the original members of the marketing group.

“We always felt Vipar was an integral part of our business because of the ability it had to negotiate better pricing from manufacturers, which significantly reduced costs and kept us competitive with other channels of distribution,” Stewart says.

In addition, Vipar membership exposed Carolina Rim & Wheel to other product lines that it may otherwise not have seen, and allowed it to benefit from the experience other distributors had with those lines.

Another benefit of group membership is Vipar’s fleet program, which brought new business to Carolina Rim & Wheel.

Stewart sees opportunities ahead for his business. “If an opportunity came along for acquisition of another business in our trading zone, that would be something we would look at.”

Taking on additional product lines if they make sense is another avenue of growth.

When considering a product line addition, Stewart looks at things like the required investment he has to make in order to have the correct amount of the product in inventory, who the potential customers are for the product, what the technical knowledge level needs to be and how much time and training will be necessary to be up and running with the product.

“Customers don’t stock nearly the products they used to, so we look at increasing our service level to make sure our customers are getting parts when they need them.”

He adds, “The reality is that with today’s economic situation, you have to be very careful what you do. You have to make sure that it gives you a return on your investment.”

The difficult economy is not the only challenge Stewart sees for his business and the aftermarket in general.

The uncertainty surrounding governmental regulations also concerns Stewart. “We don’t know what the government is going to do as far as regulations are concerned and that can certainly mess with small business very quickly,” he says.

Stewart sites LIFO regulations as a prime example. “The repeal of the LIFO method of accounting on inventory could be devastating for a lot of distributors because all of our businesses are built on inventory.” If distributors have to change their inventory accounting methods they could, according to Stewart, find themselves with $60,000 to $100,000 worth of tax liability.

Stewart sees the Commercial Vehicle Solutions Network as an ally for distributors in the legislative arena.

“There needs to be an active and strong trade association in the heavy-duty aftermarket and CVSN is that association right now. We need a neutral place where distributors from various marketing groups and independents can get together and share ideas,” he says.

As for the future, Stewart says keeping Carolina Rim & Wheel family-owned is very important to him. “I’d like to keep this company a family operation for another 80 years. I am proud of the fact that we are family-owned and extremely proud of the fact that at least now we are still a debt-free company, which in these economic times is not easy.”

Name of Company: Carolina Rim & Wheel

Headquarters Address: 1308 Upper Asbury Ave. Charlotte, N.C.

Website: www.carolinarim.com

Founded: 1926

Owner(s): Thomas M. Stewart, president,

Patricia M. Stewart, chairman and secretary,

John W. MacClements, vice president

Number of Locations: 5

Number of Employees: 59

Allan Parrott, president

Tidewater Fleet Supply

Why did you get involved in the business?

My father-in-law bought the business in 1998 and needed someone to run it for him. I left my law practice and started as a vice president in 1998. I was very fortunate to have lots of good employees with years of experience who taught me the business. I have enjoyed the proactive part of business­ — working on growth and strategy ­— and don’t miss the reactive nature of being a trial attorney. I can even enjoy lawyer jokes now!

Describe your current role in the business?

We have lots of experienced, knowledgeable employees who handle the day-to-day operations of selling parts to our customers. That allows me to focus on bigger picture items like long-term contracts, new stores or new product lines. Our business continues to evolve at a rapid pace and managing change is something I find important.

What is your business strategy?

We want to be a “one stop shop” for our fleet accounts. To achieve that goal, we stock more than 130 different product lines, including light-, medium- and heavy-duty products. We buy most of these product lines directly from the manufacturers so we can compete effectively with companies much larger than ours. We also manage the parts operations for several municipalities and one large corporation where we own the inventory and our employees run the parts rooms.

Where do you see your business five years from now?

Same mission­ — twice the size.

What is the biggest challenge facing your business today and what are you doing to respond to it?

Price increases from most of our manufacturers and communicating these price increases to our customers. It takes constant work to implement these changes and to make sure we are communicating the changes promptly. Customers don’t always accept the price changes, but if they read the newspaper they know that commodities have experienced hyper inflation over the past 12 months.

What is the accomplishment you are most proud of?

We have grown every year since 1998 and we have maintained profitability every year, even during the recession. We have never had layoffs due to a business downturn.

What sets your business apart for its competitors? What makes it unique?

Our 30 delivery vans and trucks provide hourly or nine times a day delivery to 80 percent of our customers. Our online ordering system allows our customers to search our inventory at all locations, generate orders and access electronic cataloging for product lookup. Our corporate philosophy is to maintain the best relationships possible with our employees, our customers and our vendors, and to be a good “corporate” citizen. Weekly branch meetings with upper-level management teams give our store managers and outside sales staff an opportunity to tell us what’s working and what’s not.

Name of Company:

Tidewater Fleet Supply

Headquarters Address:

1324 Lindale Drive

Chesapeake, VA 23320

Website: www.tidewaterfleetsupply.com

Founded: 1953

Owner: Allan Parrott, president

Number of Locations: 8

Number of Employees: 90

David Settles, president and

Daryle Settles, vice president Weldon Parts

Why did you start the business?

We grew up in it. Daryle attended the University of Oklahoma before joining the business. Dave graduated from the University of Nebraska and the University of Denver School of Law. We had a successful business in an interesting market available, so we signed up.

Describe your current role in the business.

Daryle is responsible for inventory for inventory management, purchasing, and marketing; Dave is responsible for finance, operations and sales.

What is your business strategy?

Our stores are relatively small. We focus intensely on customer service. We give our managers enough freedom to respond to their individual markets.

On the other hand, we try to achieve enough volume to be able to deliver some scale to the stores.

In areas such as purchasing, marketing and national networking, where we don’t have the reach or heft to service our customers as we need to, we rely heavily on HDA/Truck Pride to enhance our effectiveness.

Where do you see your business five years from now?

We want to continue expansion at a controlled pace.

What is the biggest challenge facing your business today and what are you doing to respond to it?

Our only differentiation from others who sell truck parts is the caliber of our people. We have to continue to attract and retain talented and dedicated people to move forward. At its simplest level, we work hard to make Weldon a place where people want to work.

What is the accomplishment you are most roud of?

We survived the recession of 2009-2010 with no layoffs.

What sets your business apart for its competitors? What makes it unique?

We’re patient. We don’t look for the big score all the time. We work at developing relationships with our customers and suppliers that are beneficial to both of us.

Name of Company: Weldon Parts

Headquarters Address: 711 W. California Ave. Oklahoma City, OK 73102

Web site: www.weldonparts.com

Founded: 1957

Owner(s): David Settles, president and Daryle Settles, vice president

Number of Locations: 17

Number of Employees: 125

In his words: Henry Cook, Owner

WHY DID YOU START THE BUSINESS?

My father and my uncle ran the business for many years. When I joined the company, I had a desire to continue the family business and to build upon the success we had achieved. I knew we had the potential to be bigger and reach new markets and I wanted to make that potential a reality.

WHAT WAS YOUR TOUGHEST BUSINESS DECISION?

In 1997 we were approached by a group representing TransCom, USA with a proposal to merge several parts distributors and create a publicly traded company. While we understood the benefits of consolidation, we also saw a downside.

Cook Brothers is owned by (from left to right) Bob Seyerlein, vice president of sales; Michael Venuti, vice president of operations; and Henry Cook, president.

When you are faced with that kind of decision, you never really know what the right answer is. In many ways, you are truly afraid to be wrong since the downside could be tremendous. We not only had to consider the impact upon our families, but also the impact the decision would have on the families of all our employees.

My partners and I struggled for quite some time before finally making the decision to join the group.

WHAT WAS YOUR BEST BUSINESS DECISION?

Our best decision probably was when we added our Mack Truck dealership, Triple Cities Mack, and our leasing company, NEC Leasing, to our portfolio. Prior to that time we were concentrating on just selling truck parts and realized we needed to do more.

We really wanted to be a one-stop shop where we could meet all of a customer’s truck needs. By adding a truck dealership and a leasing company, we were able to completely service anyone in the trucking industry or entering the trucking industry.

WHAT WAS YOUR WORST BUSINESS DECISION?

While we clearly did not realize it at the time, the worst decision proved to be the one to join the TransCom group. TransCom did not work for many different reasons and our change to TransCom ended up having a very negative impact on our customers. Fortunately, almost all of our employees stayed with us during those difficult years and we were able to purchase the business back.

Henry Cook, owner of Cook Brothers, credits the addition of Triple Cities

The next few years were very stressful as all our people dug in and worked to bring our customers back. Thankfully, through the hard work and dedication of a lot of our people, we were able to right the ship and move forward.

WHAT IS THE BEST WAY TO KEEP A COMPETITIVE EDGE?

We feel we have to constantly evaluate the market and be ready, willing and able to change our responses to market conditions.

One major way to do that is to open up the lines of communication with our people. Our sales force is in contact with our customers every day and has an excellent feel for what is going on and where we need to be. By cultivating that knowledge we are able to stay competitive.

We also work hard at retaining our memberships in various associations and organizations relevant to our industry. There is a wealth of knowledge and insight available, but you have to put yourself in a position to be able to access that information.

WHAT IS YOUR FIVE-YEAR VISION?

Our plan is to continue our model of constantly staying current with the latest technological advancements in both sales and operations. We feel there are several things we can do technology-wise to make us more efficient, while also creating closer relationships with our customers.

In the next few months we will be opening a new distribution facility that should allow us to improve our purchasing and handling of products. Hopefully, our efforts will permit us to continue increasing our sales and our profitability.

WHAT IS YOUR BUSINESS PHILOSOPHY?

Our motto has always been “For All Your Truck Parts Needs” and our philosophy always has been to provide quality truck parts, along with quality service.

Cook Brothers operates nine locations and employs more than 150. Its diverse operations include bumper-to-bumper service, a leasing company, new and used truck sales, hydraulic hose and driveline shops and parts distribution.

In order to achieve our goals, we have to maintain the right stocking levels for the parts we sell. We also have learned that we must hire quality people. There is no question that our people make the difference. We have the most knowledgeable, hardest-working people in the industry and they drive our business.

WHAT IS THE BIGGEST CHALLENGE FACING THE AFTERMARKET?

The great increase in technology and computer advancements in trucks is driving business back to the OEM dealers. Unless the distributors in the aftermarket develop strategies to keep that business, I believe you’ll see an increase in the OEM business and a corresponding decrease in the independent aftermarket.

HOW DO YOU SEE THAT CHALLENGE BEING RESOLVED?

The only way to resolve it favorably is for the aftermarket to develop the tools to be able to work with the new technology and become as effective at diagnosing and handling problems as the OEMs.

That, however, is not an easy task and there is a lot of work that needs to be done for distributors in the aftermarket to continue current levels of success.

DURING YOUR TIME IN THE INDUSTRY, WHAT HAS BEEN THE MOST SIGNIFICANT CHANGE?

Without question, the advances in technology have had the greatest impact on the business.

An aerial view of Cook Brothers’ expansion and new headquarters offices and parts distribution center in Binghamton, N.Y., near where the company’s current offices are located.

When I first started, computers were virtually non-existent in the industry. Now, not only does every customer have a computer, but every truck being built is run with computers.

I cannot imagine tracking sales, purchasing product, invoicing, preparing financial statements and doing all the other functions necessary to running a business without computers.

The overall impact on handling sales and servicing vehicles has been completely altered in this new technology-based environment.

WHAT ADVICE WOULD YOU GIVE A YOUNG PERSON CONSIDERING A CAREER IN THE AFTERMARKET?

I would strongly encourage someone to enter this industry since you can have a career, and not just a job. The opportunities in this industry are extraordinary.

Whether you have technical skills, organization skills or your strengths lie in sales or customer service, there is a place for you in the world of the distributor.

HOW DOES YOUR BUSINESS CONTRIBUTE TO THE COMMUNITY?

The primary way is through our support of many local charities. We also participate in community events and encourage our people to become involved in community organizations. Whether it is being on a committee for a charity, volunteering for a community event or coaching little league, we like our people to be involved and active in local organizations and events.

WHAT DO YOU KNOW NOW THAT YOU WISH YOU KNEW WHEN YOU FIRST GOT INTO THIS BUSINESS?

I wish I had known that computers were going to become such an integral part of what we do. It would have been great if all of our people could have had a stronger background in computers to prepare us all for the technological advancements we have experienced.

As technology has raced into our industry, employees uncomfortable with that technology have been resistant to change. If I had known where we were headed, we could have started training at an earlier stage and made many of our transitions much smoother.

WHAT MOTIVATES YOU EVERY DAY?

New challenges pop up every day in this business and no day is exactly like another. Dealing with those challenges while trying to take advantage of new opportunities keeps all of us going and, hopefully, moving in the right direction. n

Name of Company: Cook Brothers

Headquarters Address: 7 Walter Avenue

Binghamton, N.Y. 13901

Web site: www.cookbrothersco.com

Founded: 1918

Owner(s): Henry Cook, Bob Seyerlein and Michael Venuti

Number of Locations: 9

Number of Employees: 152

In his words: Keith McLemore, Co-owner

WHY DID YOU START THE BUSINESS?

Don Purcell and I both had a lot of years in the heavy-duty aftermarket. The family business where we were employees became a part of the industry consolidation of the 1990s. By 2002 our experience working with the national chain that resulted from the consolidation convinced us our marketplace was not being served in the best manner possible. This market missed the days of the strong regional WD, and we wanted to be the ones to fill that gap.

WHAT’S BEEN YOUR TOUGHEST BUSINESS DECISION?

Keith McLemore, owner

No one starts a business from scratch thinking that within a few years you’ll face the greatest economic downturn in almost 80 years, but those are the cards we were dealt. We were confident enough we could make the tough choices to not only survive but thrive. We kept our focus on branded OEM products while most of the competition was promoting private label, offshore products. We kept cutbacks to a minimum, while others were making more dramatic cuts. We were trying to keep our foot on the gas while also making the cuts that were necessary.

WHAT WAS YOUR BEST BUSINESS DECISION?

The best decision we made was going into business. But back in the summer of 2003, when we were standing in a newly leased empty warehouse with no customers and no employees other than me and Don, it didn’t seem like it at the time. But now, seven years later with the fantastic group of employees we have, we know it was the best decision.

WHAT WAS YOUR WORST BUSINESS DECISION?

We tried to grow too aggressively into one specific market area without ensuring we had the key personnel on board to take care of it. We were fortunate to have had a string of successes, but we didn’t plan that one out very well. Luckily, we were able to get out of that situation and move forward.

WHAT IS THE BEST WAY TO KEEP A COMPETITIVE EDGE?

We are committed to providing training to our employees and resources to our customers. We never cease to be amazed at the reaction we get to the technical clinics we put on. Our customers crave training, and we’re accommodating that in our marketplace. We used to think they just came for the barbecue, but we realize they value the technical information more so than they ever have.

WHAT IS YOUR FIVE-YEAR VISION?

Shown here is Stone Truck Parts’ headquarters in Raleigh, N.C. The company has two other locations in North Carolina – Charlotte and Greensboro.

We’re going to continue down the same path that inspired us to get started in 2003. We’re going to keep providing the same quality products that customers have demanded, and we’re going to blend in the personal relationship and service that we don’t believe can be matched in our market.

WHAT IS YOUR BUSINESS PHILOSOPHY?

When we started our company, we had to ask the questions “is there a place for us in the market?” and “what will make us different?” We kept our focus on the basics. We made sure our employees have a purpose and our customers are well served. We had seen the change that had taken place in the old company, and how it had impacted the employees and customers, and we didn’t like it. We wanted everyone to feel a part of the team; we’ve worked hard to make this as much of a family atmosphere as we can.

WHAT IS THE BIGGEST CHALLENGE FACING THE AFTERMARKET?

We’ve got to keep the pipeline filled with quality young individuals who are ultimately going to be the future of this industry one day. It seems tougher and tougher to get those guys into the business.

HOW DO YOU SEE THAT CHALLENGE BEING RESOLVED?

Stone Truck Parts’ sales and service personnel have more than 100 years of hands-on parts experience.

We have to expand our reach to make sure we’re covering all the bases. We need to be attending all the local job fairs, visiting every community college and technical school in our area, and participating in every maintenance council we can. Given the current employment situation, we may even get some looks from more traditional college graduates, and that wouldn’t have been possible in the past economic times.

DURING YOUR TIME IN THE INDUSTRY, WHAT HAS BEEN THE MOST SIGNIFICANT CHANGE?

The industry consolidation of the last decade or so definitely changed the landscape in the aftermarket. But we’re certainly thankful for that, because without that consolidation, Stone Truck Parts wouldn’t exist today.

WHAT ADVICE WOULD YOU GIVE A YOUNG PERSON CONSIDERING A CAREER IN THE AFTERMARKET?

Jump on board, you won’t regret it. There have been a lot of fad careers out there, but ours is not one of them. I’ve often heard it said, once you get in the heavy-duty industry, you just don’t get out. I think that’s true, but it’s true because you don’t want to get out; there are just some great people here.

HOW DOES YOUR BUSINESS CONTRIBUTE TO THE COMMUNITY?

The company caters to the full range of end users, including municipal fleets and provides sales and support online through www.stonetruckparts.com.

We like to do things locally. We’ve done some things like supported the Boy Scouts, helped a new local middle school get its first scoreboard and helped a high school group provide support to the families of deployed soldiers.

WHAT DO YOU KNOW NOW THAT YOU WISH YOU KNEW WHEN YOU FIRST GOT INTO THIS BUSINESS?

Don and I have been in this industry a long time, and most likely we will have been employees much longer than we will be owners. In the beginning, it was all about the race to get the business off the ground. As the seven years have unfolded, we realize the magnitude of what we do impacts more than 50 other lives, and that’s pretty humbling. I didn’t realize that in the beginning.

WHAT MOTIVATES YOU EVERY DAY?

We’re proud to have built the company we have in such a relatively short period of time. In the beginning, we worked so hard just to get it off the ground. Basically what motivates Don and I today is that we’re trying very hard to live up to the vision we created in 2003 when we began. n

Name of Company: Stone Truck Parts

Stone Truck Parts has extensive product offerings covering a full lineup of new and remanufactured components, as well as shop and safety supplies.

Garner, N.C. 27529

Web site: www.stonetruckparts.com

Founded: 2003

Owner(s): Keith McLemore and Don Purcell

Number of Locations: 3

Number of Employees: 55

DRIVE TRAIN INDUSTRIES

Name of Company: Drive Train Industries

Headquarters Address: 5555 Joliet Street

Denver, Colo. 80239

Web site: www.dti-inc.com

Founded: 1945

Owner(s): 100% Employee Owned (ESOP Corporation)

Number of Locations: 10

Number of Employees: 137

WHY DID YOU START THE BUSINESS?

Drive Train Industries was founded in 1945 by my grandfather John Burke. Drive Train was the premier aftermarket brake supplier in the Rocky Mountain Region. John had a passion for that business that he passed on to his sons (Joe, Jim, Larry, Tom and John).

As the “boys” went to work, they began to push and expand the company in new directions. They added drivelines, axles, transmissions and PTOs. The company was located in downtown Denver on Market Street and had stores on both sides of the street. There were several names for the company: Brake and Clutch, Gear and Joint and Axle and Transmission.

In 1974 they moved from lower downtown to a location a few miles away in a newer, larger building located on Brighton Blvd. It was at this time they combined all of the operations into one and changed the name to Drive Train Industries.

WHAT’S BEEN YOUR TOUGHEST BUSINESS DECISION?

I would like to answer: What the toughest thing I’ve had to do in this business?

Last year we had the biggest challenge we have ever had to face. Most people would say that challenge was our poor economy, and while that was tough for us, the even bigger problem for us was that we had to relocate our headquarters. Our building had been sold two years earlier and our lease was due to expire.

After 35 years of doing business at our Brighton Blvd. location, we had to move. While this was certainly a daunting challenge it also gave us the opportunity to rationalize our business model. By starting with a clean sheet of paper we were able to tear down barriers between traditional departments, allowing us to streamline process flows. We examined the products and services offered by each of our profit centers and in some cases decided that particular pieces would not make the transition with us.

We made the decision to combine our two separate truck service operations and our main store, which contained a large warehouse and brake, machine, driveline, transmission, differential and hydraulic shops.

Our next challenge was to find a building. We calculated that we could take a combined 170,000 sq. ft. of current operations and fit them into a building with roughly 90,000 sq. ft. We looked at more than 40 buildings before we found the one that met our needs.

We then spent nearly five months securing a lease on that building. After taking possession of the building in May, we then started tenant improvement projects which included constructing demising walls, cutting service bay doors, creating an administrative office, designing a new showroom, and installing new phone, network, materials handling and compressed air systems, just to name some of the things we had to get done in a short four month window.

The next big hurdle was to formulate a logistics plan to move more than 45,000 part numbers, a computer system and all of the admin functions over the Labor Day weekend. When we negotiated with the moving company they calculated it would take at least 56 hours to complete the move of our warehouse, counter and admin areas.

Last year Drive Train Industries moved to a new state-of-the-art facility after having been at the same location for 35 years. Jim Burke, president and CEO, says it was one of the toughest things he’s had to do in this business.

With some careful planning and some very talented and motivated employees and suppliers, we were able to move it in just over 18 hours (the movers did not get the double time they thought they would get for working on the Monday holiday). We were able to get set up to conduct business on Tuesday morning.

In the next phase of the process, we had a rigging company transfer and install 49 pieces of production machinery and machine tools into our component repair shop. During the following two weeks we moved our two service shops into their new home in the corner of our building. This operation was very successful and now allows us to better serve our customers.

This by far was the most difficult thing our company has had to overcome, and I hope I’m long retired before we ever have to move again.

WHAT WAS YOUR BEST BUSINESS DECISION?

Our move, while difficult, was the best business decision I think we have ever made. By combining all of our operations and streamlining our warehouse I believe we now have the ability to be very efficient and effective at helping our customers. The combination of our truck shop, with our component repair shop, and throwing in a comprehensive inventory, has allowed us to deliver a level of service to our customers that cannot be matched by our dealer competitors.

WHAT WAS YOUR WORST BUSINESS DECISION?

Moving might have been our toughest decision, but it wasn’t our worst.

Drive Train Industries’ new facility combined its other locations into one and brought under one roof the company’s truck service, store, warehouse and brake, machine, driveline, transmission, differential and hydraulic shops.

The economy during the last 18 months has forced us to make very difficult decisions in order to keep the company viable. The worst thing I think we have had to do is to reduce our workforce to remain competitive. Letting go of some of our long-term employees was an emotionally difficult decision that we wish we didn’t have to make.

WHAT IS THE BEST WAY TO KEEP A COMPETITIVE EDGE?

The best way to keep a competitive edge is through information and communication. If you can collect, calculate and generate the right and accurate data, you can make the best decisions. We are constantly trying to search our databases in new ways to help us make accurate projections and decisions.

Even though Drive Train Industries cut their total space almost in half when it moved to its new roughly 90,000 sq. ft. location, President and CEO Jim Burke says they were able to optimize operations and storage.

As accurate as data can be, nothing can be more helpful than constant communication with your customers, employees and industry peers. There are so many times that people tell a different story with a different conclusion than what the latest database can come up with.

WHAT IS YOUR FIVE-YEAR VISION?

The current economy has changed everything we thought we knew about our business. The term that everyone uses is “the new normal.” As we move forward, our immediate challenge is to weather the storm and bring back the strength of our organization.

The decisions we have made in the past year-and-a-half will cause us to look closely at growth decisions as we move into the future. We believe we need to stay lean and to carefully control our growth and expansion plans. We also have also learned that our service operations help with profitability, and truck service is an area where we plan to focus more of our resources.

WHAT IS YOUR BUSINESS PHILOSOPHY?

We still operate off of the same basic philosophy that John Burke started with. We create value for our customers by offering quality products and services – and then by combining outstanding technical support, training and service – we can help our customers be successful, efficient and profitable.

WHAT IS THE BIGGEST CHALLENGE FACING THE AFTERMARKET?

The dealer network. It seems like it has been that same challenge for several decades now.

HOW DO YOU SEE THAT CHALLENEGE BEING RESOLVED?

Distributors are doing several things to remain competitive with our dealer counterparts. We are lobbying heavily for access to vehicle information.

Distributors attend trade shows, training opportunities and events like Heavy Duty Aftermarket Week, NTEA’s The Work Truck Show and others on a regular basis. This allows us access to our industry peers and the ability to share best practices.

Most distributors are members of one of the marketing groups. These groups allow us to pool our purchases, and sometimes our resources, in order to remain competitive.

WHAT ADVICE WOULD YOU GIVE A YOUNG PERSON CONSIDERING A CAREER IN THE AFTERMARKET?

This is a business based on relationships. In order to be successful you have to build quality relationships with your customers, your suppliers and your peers in the industry. If you don’t possess the skills to build and cultivate those relationships, you will have a difficult time succeeding in this business.

HOW DOES YOUR BUSINESS CONTRIBUTE TO THE COMMUNITY?

John Burke was a devout Catholic and he strongly believed in helping his employees and his community. John was a big supporter of the United Way. For well over four decades Drive Train Industries has partnered with United Way and continues to encourage all of our employees to contribute to this charitable organization.

John also had a very soft spot in his heart for The Little Sisters of the Poor. The organization’s charter is to help indigent seniors with nursing home and hospice services. The Sisters always knew they could twist John’s arm whenever they needed help and he always would come through. When John passed away, my father, Jim, took up the torch and continued the support. Now the nuns are after me. n