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Ahead of the Pack South Side Control Supply Co.

In a competitive wholesaler market, it's no longer enough to sit back and wait for business to come through the door. Successful wholesalers today have to possess all of the qualities that customers demand: from customer service and technical competence to a deep and wide-ranging product inventory.

Frank DiStefano of South Side Control Supply Co. has been in the business long enough to remember the days when selling effort was a minimal part of the process. But the Chicago-based controls distributor has thrived in a changing competitive environment because it has always been out in front with those very qualities that so many others are only now seeking to instill in their employees and operations. With 11 locations and a market area that extends from southern Wisconsin down to southern Illinois and over to northwest Indiana, South Side Control Supply Co. has developed a well-earned reputation as a control house that contractors and technicians can count on for superior service and the controls they need.

Founded in Chicago as an electric supply wholesaler circa 1940, it existed as a mom-and-pop operation for its first 20 years. The company actually traces its origins to around 1925 when founder Vic Jensen arrived in Chicago, says DiStefano, the company's vice president, treasurer and secretary who has been with the company for 35 years. In the early 1960s, Nort Jensen, Vic's son, joined the company, and its metamorphosis to a controls distributor began to take shape. An engineer by training, Jensen believed there was a greater market for control specialists in Chicago and its burgeoning suburbs.

He grew the company from its facility on Chicago's South Side to eight branches throughout Chicagoland. The company has since added branches in central Illinois and one in northwest Indiana. Most branches are set up identically, though branch managers have the latitude to adjust their product offerings for their customers, says Len Kasper, South Side Control's vice president of sales and operations.

DiStefano says it may be a bit of a misnomer to call them branches. At between 2,500 and 3,500 square feet, each location is more like a twig, he says. But don't let the small size fool you. Within each location are at least one or two employees with a high degree of technical competence and lots of inventory. Convenience is also a big factor when one considers that the eight Chicagoland branches are all located within a one-hour drive of one another.

Each location also has another feature that illustrates how South Side Control Supply goes the extra mile for its customers. “We have a testing center set up at each one of our locations so that we can test pretty much everything that we sell — from flame safeguards to pneumatics,” says Kasper. “It's not uncommon for us to invite a customer to the test bench, taking him through the calibration procedure.”

It makes sense, after all. Controls are what South Side Control Supply does. And it does it well. Its employees use their control specialty and specialized training to its advantage, educating customers at their counters, their test benches and in their training sessions. “You'll see a lot of training at our counters,” Kasper says. “Or if a guy is having a problem on a job, we'll test the control and help him figure out what the problem is and help him come up with a solution for the problem,” adds DiStefano.

If the problem can't be solved over the counter or on the phone, the control house will send a specialist on-site to help find a solution. “You've got to go out and earn every customer's business. Sometimes that means taking care of them at the counter, sometimes it means making an outside call, sometimes it means going out to the job site,” DiStefano says. “If there's a control problem, we'll go out and help our customer solve it.”

South Side's engineering department is another valuable resource that its customers have come to rely on for designing control systems. In this day and age, most times that control system involves DDC controls, and South Side Control Supply represents two of the best DDC controls manufacturers, Honeywell and Johnson Controls. On a typical job, South Side engineers will design the system, create the drawings, program the controls, construct and fabricate the control panels and help the contractor start up the job. For those contractor customers having more than enough work to handle, counting on South Side for their engineering gives them peace of mind that a major part of the job will be taken care of correctly. For those contractor customers who want to do it themselves, South Side is a major technical resource if they find they need the help.

The technical ability of South Side's engineering department, managers and inside salespeople is “second to none,” according to Kasper. But South Side Control Supply also instills in its employees something they can't learn from a manual: attitude. “Everybody says their customers come first, but with our guys, actions do speak louder than words, and those actions show they truly care about their customers and what's best for them,” Kasper says. He cites several examples: As a customer walks into the stores, someone will meet them at the counter and not keep them waiting. If a customer calls, an employee will pick up the telephone by the third ring. It's a corporate culture thing, an attitude that is learned from example and what is expected and tolerated by management. Employees take their cues from other employees and from the attitude of managers. “It's leading by example,” says Eric Jensen, grandson of Vic Jensen.

A large part of this customer-first attitude stems from the fact that so many South Side Control Supply employees have been with the company for so long. In fact, its 11 branch managers have an average length of service of 20.5 years. The 21 inside salespeople average 14.5 years with the company, while the engineering staff has been with the company for an average of more than seven years. “We've been around a long time, and our people have been around a long time,” says DiStefano of the 41 full-time and two part-time employees.

South Side Control Supply gets tremendous commitment from its employees because they feel the relationship between employer and employee is a two-way street. This family-owned employer respects and appreciates the work of its employees and compensates them well. This includes good salaries, bonuses, health insurance, a weekend company outing, vacation time and absentee time that can be saved or paid out in cash yearly. In addition, the company has an annual pension and profit- sharing contribution (DiStefano says that in his 35 years with the company, they have never put less than 8 percent of an employee's annual salary into the plan). “We try to be very fair with our people, and we want to retain them. Our people work really, really hard,” DiStefano says. Obviously, based on the tenure of the South Side employees, there is a feeling of loyalty to their employer and customers, and it causes the employees to continue to do the best job they can.

South Side Control Supply considers this longevity and those skills as differentiating factors. It is an important distinction that helps to set them apart. With the blurring of traditional channels, “big box” retailers, other wholesalers and even some manufacturers themselves competing for business, it's an edge that counts among their customers. “We believe that we have the best people in the industry: technically competent, extremely friendly, the type of people who enjoy solving problems and taking care of customers,” DiStefano says. “I doubt you'll find that level of commitment anywhere.”

As a control distributor, the company sees itself in the customer education business. Nort Jensen began holding controls classes for customers 40 years ago, DiStefano says. “His Flame Safeguard class was a classic, as was his class on pneumatics,” he says. “Nort is an excellent teacher. He was able to impart useable information to employees and to our customers. We've continued that tradition.”

South Side Control Supply holds free classes for its customers in the spring and fall. To make it easier for customers, they moved classes to one of the company's suburban locations three years ago. “Driving to downtown Chicago after work can be tough. Our customers suggested that we move it,” DiStefano says. Not only is the location convenient, but there is a larger space that allows the distributor to accommodate more of its customers.

South Side Control Supply maintains good relationships with its manufacturers and counts on them for additional product training. DiStefano says they will typically have a manufacturer come in for a couple of days to allow all of its employees an opportunity to learn one-on-one with the manufacturer's representatives as well as get to know that rep. South Side Control Supply will also bring training directly to some of its better customers, creating a specialized program for them. The company has also teamed up with the local pipefitters union, creating relationships with future service technicians.

While South Side Control Supply's locations may be on the smaller side, they don't lack inventory. Roughly two-thirds of each location is devoted to products. South Side runs its supply operation through its 15,000-square-foot warehouse at its headquarters. The locations are replenished daily, with its resupply of products based on the daily branch reorder reports. They restock branches in the Chicago area first thing in the morning; as for the outlying branches, they receive shipments by 10:30 a.m., DiStefano says.

South Side Control Supply has been out in front with technology. The company had a computer system 25 years ago that they have upgraded, modified, improved and customized to their needs. And they continue to rely on inventory and sales programs to monitor items like lost sales and warehouse errors. “We monitor a lot of our processes on a daily basis,” Kasper says. “Every time we lose a sale, it's entered into our computer, and I get a record of it.” Kasper, DiStefano and Jensen review the reports and are proactive in making adjustments to keep the number of lost sales low, so sales can remain high.

According to Jensen, the South Side Control Supply website is gaining importance as a tool to bring more information to customers. The company recently launched a revamped website that increases interactivity with customers. Now customers can search every item in the South Side system and check real-time availability by location. They can check the status of current orders, search past orders and even place orders at any one of the 11 locations. In addition, the website makes all primary documents such as invoices, credit memos and packing slips available to the customers via the website.

In addition to being on the Web, these primary documents are available by fax and e-mail. “One program that customers have found to be very useful is our ability to immediately fax or e-mail them copies of their sales orders or packing slips which their technicians have picked up. Our customers get immediate, accurate information on their order, there are no discrepancies, and our contractor can bill their customers without delay,” Jensen stated.

While South Side Control Supply's claim to fame has been as a controls distributor, they are continuing their expansion into the refrigeration market. “In the last four or five years, we've grown it substantially, and we see it as one of our bigger opportunities for continued growth,” Jensen says. The company has become a Carlyle Certified Refrigeration Partner and added Carlyle refrigeration compressors to its inventory, complementing its existing Tecumseh compressor line. For a technically oriented company like South Side Control Supply, combining refrigeration specialist skills with their control specialty and having it supported by their people and their refrigeration and air conditioning lines such as such as Sporlan and DuPont will surely bring benefits to its customers.

Meanwhile, the employees of South Side Control Supply continue to do what it takes to meet customers' needs. They certainly understand the underlying issues that face them and other wholesalers. “Our customers are consistently looking for us to do things better, faster and cheaper, and trying to keep up with that is always a race,” DiStefano says. “What we try to do is figure out how we can bring value to them and be of service to them so they keep buying from us and we grow our business.” South Side Control Supply has a team of employees and a business philosophy that will continue to keep them ahead of the pack.

Michael Maynard is a business writer in Providence, RI, who writes on issues related to HVAC, construction and architecture. Contact him at [email protected].

South Side Control Supply Co. at a Glance
Owners Norton Jensen & Eric Jensen
Vice President Sales and Operations Len Kasper
Vice President Finance/Secretary/Treasurer Frank J. DiStefano
Headquarters 488 N. Milwaukee Ave., Chicago, IL 60610
Branches 10
Employees 41 Full-Time, 2 Part-Time
Major Product Lines Belimo, Bell & Gossett, Carlyle, DuPont, Fireye, Honeywell, Invensys, Johnson, McDonnell & Miller, Siemens, Sporlan, Tecumseh, White Rodgers
Annual Sales $15M

BEST PRACTICE

Definition: Our best practice is our managerial approach that fosters an environment where customer service is a top priority. We believe it is critical that all of our employees are striving toward a clearly defined goal. This instills an attitude that causes everything to fall into place. We put a strong emphasis on technical knowledge that allows our customers to rely on us as a resource, not just a supplier.

Significance: We take better care of our customer, which has allowed us to build a dedicated and loyal customer base.

Benefits: Our customers call us first because they are confident that we understand their needs and will provide them with whatever solution is in their best interest.

Procedure: We continually introduce and encourage simple and proven techniques that promote top-notch customer service. We believe that it's the small things you do every day that cause the big things to happen. It can be as basic as answering the phone within three rings or immediately addressing customers when they walk in the door. These things set the tone, which creates an atmosphere that delights our customers.

People Involved: Everyone, but it starts with the managers and more experienced employees.

Timing: Daily.

Cost: Incorporated into the daily cost of running a business.

Other Considerations: We run multiple branches that are close enough to compete with each other, so it's necessary to do things from the customer's point of view and not an individual branch point of view, because what may be good for the branch may not be good for the customer. But what is good for the company is to put the customer's interest first, thereby assuring the company's interest over the long term.

Contact: Frank J. DiStefano, 312/226-4900, ext. 146, or [email protected]; Len Kasper, 312/226-4900, ext. 156, or [email protected]

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