With 49 branches spread across four states and a strong presence in HVAC, plumbing, electrical and waterworks, Coburn Supply Co. Inc. is a wholesale distributor that understands the value of diversification. For much of its existence, Coburn was a plumbing and A/C equipment supply house, but it took the oil bust in the mid-1980s to convince its owners that the business had to expand its offerings and grow geographically.
The company was founded by Albert Coburn, who started his career as a plumbing and heating contractor, first in Louisiana and later in Beaumont, TX. In 1929, he became the manager of a plumbing supply distributor in Beaumont and, when the store closed in 1934, Albert convinced the owner to let him buy the materials on consignment. With that, Coburn Supply was born.
As east Texas grew, so, too, did Coburn. It opened branches in east Texas and Louisiana and established the “show room” concept in its Beaumont office as a way to help plumbing contractors sell more products. This idea of a show room later spread to all of Coburn's branches. As Don Maloney, the president of Coburn and the great nephew of Albert, recalls, the late 1970s and early 1980s was the era of a great oil boom in Texas, and businesses throughout the region were doing very well. Coburn was no exception. But an oil bust in the mid-1980s — fueled by a national recession — brought many Texas businesses to their knees. “We literally watched our sales drop one year 50 percent,” Maloney says. “The rest of the world said they were in a recession, but we were in a depression.”
That's when Coburn decided to change its business model. “In the 1950s, we were known as an equipment house, selling the boxes and then the bigger boxes as the air-conditioning units evolved,” Maloney says. “We needed a larger footprint if we were going to grow. We needed to emphasize some things other than A/C equipment itself.” Coburn's growth in the mid and late 1980s came through acquisition — buying Cagle Supply Co. and American Supply Co., both with branches in Louisiana. With the growth of the company, it also began to expand its focus with new product lines, which included an emphasis on full-service HVACR distribution.
Today, Coburn has branches in Texas, Louisiana, Mississippi and Tennessee that fulfill the mission the business made for itself following the oil bust — virtually any contractor can come to Coburn and find what he or she needs for their residential and commercial jobs. Coburn kitchen and bath designer show rooms that appeal to consumers as well as contractors also have become an important way to differentiate itself from its competitors.
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For Maloney, Coburn's growth is part of its mission of being there for customers and offering all the products they need to do the job. “The more you could offer the customer, the probability of your being of value to them was enhanced,” he says. He's the first one to say, however, that you can't sell a customer the products unless you have the right people in place. “The best part of our growth has come from our people,” he says.
Even with 49 branches that range from Memphis to Houston, there's a Coburn way of doing business — and it begins with service. What does the customer need? What do they expect of you? These are among the questions that the Coburn staff keeps in mind as they take and fill orders and work with customers. The company launched Coburn University as a way to create some common training and educational methods among the staff. Coburn also uses HARDI training programs for development in specific areas.
Because of the large territory, Coburn is divided into six regions, with the branches in each region reporting to a vice president/general manager. They, in turn, report to Maloney and his brother, A.J. Maloney Jr., executive vice president. Each branch is set up and run to serve its local market. “We have a saying, ‘every sale is local,’ and our GMs/vice presidents are the people that are there,” Maloney says. “They're in their branches as much as they possibly can and take care of any issues.” Regional sales meetings help to keep the branches connected with one another and with the corporate office.
Six of the branches primarily sell air-conditioning equipment and supplies; two focus primarily on waterworks, and 19 specialize in plumbing and air conditioning with the remainder considered branches that stock a full range of equipment and supplies. While the plumbing, air conditioning and waterworks have links to construction, being in different markets “allows us to spread the efforts and reap the rewards,” he says.
Spread throughout its territory are three central distribution centers in Texas, Louisiana and Mississippi. It is key for Coburn to be able to provide next-day service that its customers depend on for their jobs. Replenishment to branches occurs every day. “In essence, a customer can walk in before 4:30 p.m. and say, ‘I need this widget,’ and the next morning, it's at that branch. That helps us considerably,” Maloney says. Having the central distribution centers also helps to reduce the amount of inventory the branches need to have on hand.
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An important component of Coburn's success has been its ongoing relationship with its vendors. “We learned a number of years ago that the best thing we can do is to have conversations with our vendors to make sure that we're all on the same page,” Maloney says. “Sometimes you find out you're telling them what they need to know, yet you find out somewhere along the way that something got lost in translation.”
Given this, Maloney and his brother stay in touch with as many vendors as they can, especially their largest vendors, to know their needs and what they expect from one another. In many cases, Coburn segment managers or general managers may be able to resolve the issue with a vendor. “When it's a major issue and it's a major concern not only for us but for the vendor, we'll get the complete team together and sit down to resolve it.”
Coburn learned some important lessons in contingency planning following hurricanes Katrina and Rita in 2005. Until those hit, Maloney jokes, their idea of contingency planning was nailing plywood over the windows and moving all of the equipment that could blow away inside the building. Hurricane Katrina did not physically impact the branches, but the destruction of a switching station in Gulfport, MS, effectively knocked out communications for all of the branches. “We were down as a company for three or four days.” Hurricane Rita knocked out the stores for several weeks.
Following those disasters, Coburn created a redundant site away from the coast in Longview, TX, and adopted a companywide evacuation protocol to ensure that the Coburn stores are not affected by a disaster and could continue operations as usual.
Three years later, Hurricane Gustav heavily damaged a branch in Thibodaux, LA, collapsing the roof on the show room and severely flooding the Alexandria, LA, branch. When Hurricane Ike made landfall on Galveston Island just 12 days later, it destroyed Coburn's plumbing office. Yet operating with generator power, Coburn was one of the first plumbing and A/C distributors to reopen on the island after the storm. In early May, Coburn was already testing its generators and getting them ready for the coming hurricane season.
Coburn has grown into what it is today because it listened to its customers and evolved to meet their changing needs. Maloney says this is the philosophy that will sustain the business for years to come — never taking customers and their needs for granted. “We're always reintroducing ourselves to the customer,” he says, whether it's at the sales counter or on a job site. “We're always trying to identify what's changing in the industry and then put the ball in motion.”
Michael Maynard is a business writer in Providence, RI, who writes on issues related to HVACR, construction and architecture. Contact him at[email protected].
Replenish inventory every day to all locations out of our three distribution centers
Definition and Example: Approx. 70 percent of all items sold on a regular basis are stocked in our DCs. Replenishment requirements of the branches are identified and fulfilled by shipment from the DCs.
Significance: Improves customer service; broader product offering available to all locations; reduced stocking levels at branches
Benefits: See significance
Procedure: Branch replenishment needs are identified by the DCs, and trucks are loaded the night before for delivery to each location the next day.
People involved: Distribution center personnel, branch personnel