It snowed the day I visited SCR, St. Cloud, MN — in mid-April. No worries, though, because at SCR, working with colder temperatures is a favorite activity.
SCR, a dynamic, 54-year-old company of 140 employees, is a leading provider of refrigeration service and installation in the Midwest. SCR provides mechanical, refrigeration, building controls, sales, and service for all of Minnesota, parts of Iowa, Wisconsin, and the Dakotas. Originally founded as St. Cloud Refrigeration, in 2009 it gathered all divisions and branches under the "SCR" banner, as part of a rebranding plan based on one, identifiable name.
Mike Fitch, a son of company founder Don Fitch, now leads SCR, with Pat Welty, his partner since 1985.
Don Fitch founded the company in 1957. He was 35, had returned from the service in 1946, had earned a three-year degree in refrigeration and electrical, and had five years of practical experience. He paid his dues by working on ammonia compressors for local creameries. He's one of those industry pioneers who truly have seen most of the industry's major service and installation advancements.
"I was the young kid on the block who was willing to crawl under those systems and fix the seals," he recalls. "In my years, there was competition, but we had a big demand for supermarket service. Many new things were coming on the market that needed servicing. When I started, they were still chopping ice from frozen rivers."
His wife, Delphine, managed the office and billings.
Mike Fitch has been a part of SCR from age 9, when he'd help out in whatever way he could. He earned an HVAC degree from North Dakota State School of Science, and joined the family business full time in 1974.
Pat Welty had always wanted to be part of a successful business, partly because he had worked in his parents’ resort business while growing up. He attended Moorehead Vocational School and North Dakota State University, and worked briefly for a refrigeration business in Brainerd, MN, before joining SCR in 1977, as an estimator, and the company's first salesman.
In 1980, SCR obtained dealer rights for its first refrigerated case line (Kysor/Warren), and officially entered the grocery store arena. Today, the majority of SCR's refrigeration business resides in supermarket refrigeration system service and installation. As an authorized Hill PHOENIX and Barker dealer, SCR is on the cutting-edge of innovative and energy efficient systems that customers now crave.
Fitch and Welty's styles and approaches to the business meshed well, and they agreed to purchase St. Cloud Refrigeration from Don Fitch in 1985. In some ways, it was the start of the "modern era" for the company, as the change in leadership coincided with exciting advancements in refrigeration technology.
"Everything evolves over time, and you can’t foresee the end result," Fitch says. "But Pat and I had energy and vision, and we saw the opportunities in this area. We were both aggressive, hungry, and we wanted to succeed."
They kept at it, knocking on doors and shaking hands. In a sense, Fitch says, he and Welty were the "new kids on the block," even in the minds of those who had worked with Don Fitch and company's older technicians.
"That was a hurdle, but we took on the challenge," he says.
HVAC service was added in early 80s, followed by a sheet metal shop. Everything took off from there, and as refrigeration in the region expanded, SCR expanded with it.
Fitch and Welty are the first to arrive and the last to leave. They participate in most sales calls. It could be they have a long history with an existing customer, will certainly have expertise to lend to a new project, or, they may simply wish to meet prospective new customers, and emphasize the advantages of working with SCR.
They keep their ears to the ground by participating in the supervisor call rotation team, an eight-person contingent that answers after-hours and weekend calls. Upon receiving a call, the supervisor first contacts the customer, to learn some details prior to dispatching the technician, and to determine if the call is indeed critical. They also obtain other helpful information the technician needs to know.
SCR's approximately 1,000 commercial refrigeration customers include supermarkets, cold storage facilities, beer warehouses, convenience stores, liquor stores, and food service businesses. In addition to ultra-modern refrigeration systems, the teams provide custom millwork and cabinetry, custom stainless steel, LED light retrofits, fixtures and shelving, insulated building panels, HVAC, and building automation. Annual sales are estimated at $20 million.
Diverse Talent Wins Customers
SCR's four divisions — refrigeration, service, HVAC, and building automation — are often brought together on a refrigeration project. Welty says it’s that diversity which has vaulted SCR to a position of prominence throughout the state. Division interaction is the major value differentiator between SCR and its competitors.
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"For instance, for a current supermarket project, our building automation division is installing the refrigeration controls, the HVAC division is handling the store's comfort systems, and our construction division is bringing it all together," Welty says. "Once the job's completed, the service department will handle the service work. We really focus on customers for whom we can use all of our services."
SCR's branch locations— SCR North, in Baxter, MN; and SCR South, in Rochester and Mankato, MN — were established over the past decade, to help SCR cover the state more efficiently and take advantage of new opportunities.
A Loyal Band
SCR's team approach is evident to any visitor, and its technical expertise is clear to see when viewing project layouts, or when visiting a customer's mechanical room. Quality standards are linked to customer satisfaction. Everything must meet high standards of craftsmanship, and be neat, clean, and working.
This team approach contributes to employee longevity. SCR employees don't leave. Twenty-five employees have been with the firm for more than 15 years. Twenty-seven have been on board for more than 10 years, and 37 have served more than five years.
Their loyalty enhances SCR's diverse talent bank, with a solid foundation that can only come from a tested outfit, well-acquainted with a company's high standards and best practices.
So, why such fierce loyalty? Welty says the answers are based on rewards, challenges, opportunities, and security.
"Refrigeration technicians," he says, "will typically earn more than most other trades, for two reasons. Their pay scale is at the top of the service and construction trades, and the work is more stable. Electricians, plumbers, and other trades tend to follow in the footprint of a larger construction project. There are no short hours, and it’s just about unheard of to see a refrigeration technician working less than 2,080 hours per year. In addition, many industries don’t have the range of opportunities or technological challenges that are found in refrigeration. Not that other industries don't provide challenges, but, the skill levels that are required to make repairs requires a strong base in electronics, mechanical systems, and theory. It brings about a good learning challenge. And should the day come when a technician no longer wants to work in the field, he can fill other positions, thanks to his mechanical skills," Welty says.
Staying in Touch, Looking Ahead
SCR knows where it's going every step of the way. Its 14-person Leadership Group oversees company business, and plans for the future. First, it meets monthly, to review existing projects, and share developments within each division.
Secondly, a more concentrated, two-day meeting is held every February. During this focused retreat, the group reviews financial reports, engages in various organizational troubleshooting, and plans for the future.
Day 1 is a review of the previous year's activities. "We review each branch's numbers, review the volume of invoices, customer retention, and a variety of other success indicators against previous years," Welty says.
"This includes all departmental operating overhead expenses, sales and expenditures compared to previous years, department operating percentages, phone expenses, fuel expenses, and more. We cover all of the different overhead expenditures that are part of the cost of running the business."
Day 2 involves planning for the new year and beyond, as they determine where they need to go with the business.
"We set budgets for all divisions as far as gross sales and expenditure forecasting. We do our best to project evenly for four quarters, and later in the year, we compare targets to the budget," Welty shares.
As the year progresses, attention is given to monthly and quarterly financial results.
The meeting concludes with a presentation of "wish lists," which could include new laptops, trucks or trailers, or expanding shop space.
"At the end of the year, we review the minutes from these planning meetings, and we find that we're able to make most of those wishes come true," Welty says.
SCR helps makes others' wishes come true through a variety of community contributions, including the Catholic Charities Food Shelf, United Way, St. Cloud Chamber of Commerce, Big Brothers & Big Sisters, St. Cloud Hospital, and St. Cloud State University.
Industry memberships include Air Conditioning Contractors of America (ACCA), Refrigeration Service Engineers Society (RSES), Sheet Metal Air Conditioning National Association (SMACNA), and North American Technician Excellence (NATE).
Advice for Success
Fitch has sage advice for the owners of smaller companies who want to think big:
"Seize opportunities. If you'’re a smaller company, get licensed to do bigger things. Keep your eyes open for opportunities, and continue your education. Hire good people, so that if an opportunity comes along, you can use your team approach and knowledge to handle a larger project. Seek out those potential customers who appear to be growing."
Fitch urges colleagues to avoid complacency, and to never take customers for granted.
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"Don't live by emails and voice mails. Get out there to meet your customers, and earn their trust," he says. "That's why Pat and I are still on the call rotation; we want to remain close to our customers. You're only as good as your last installation or service call, so you have to be on the ball with everything."
When asked to describe SCR in one word, Welty again mentions "diversity."
"We've had years in which refrigeration was slow, but HVAC was good. With multiple legs to stand on, it's easier to keep the entire enterprise on a solid foundation," he says. "Our employees are all good people, with family values, and a strong work ethic. That's consistent throughout the company. Having a team of geniuses doesn't necessarily get work done, if they don't have the same values and work ethic."
Moving forward, Fitch believes a new company motto might be, "hold on tight."
"As our area and branches become stronger, and the economy comes back, there should be lots of additional opportunities," he says. "We're trying to position SCR as 'the company to go to.' We want them to call SCR first." On a particular day in March, it was ContractingBusiness.com who happened to call, with some good news. We're glad Mike Fitch and Pat Welty took that call, and that they were willing to accept this latest accolade, as we name SCR the ContractingBusiness.com 2011 Commercial Refrigeration Contractor of the Year.
New Talent Always on Deck
SCR has never had a problem finding qualified technicians, thanks to a special scholarship program initiated in 1996. It’s been used at three area vocational/technical schools since that time, and is currently in place at St. Cloud Technical College. Here’s how it works:
SCR writes a check to the school for the students who are chosen to participate in the program.
The funds are applied to students’ accounts, and is used to cover tuition, books, and any other course requirements, such as lab fees.
The schools typically teach HVAC and refrigeration together, which covers every major topic of potential interest, including building automation.
After graduating, students are expected to remain with SCR for a minimum of two years.
Students work for SCR during the school term, usually for three hours each day after classes (2 PM to 5 PM).
Students will also work for SCR in the summer months in between their first and second school year. The program, and the summer employment feature, is a major win-win, for the student and for SCR.
"They're a much more enlightened student when they return for their second year of class," Fitch says.
"We've had 30 to 35 people participate in the program," Welty adds. "We always have people going through it, so we haven't had a shortage of workers for the last 20 years."
Fitch and Welty have found that many of the youth from surrounding rural areas have a high level of mechanical skills. And, having three schools in your hometown keeps them nearby when school’s out.
To grow students' interest in HVACR careers, SCR leadership will speak to high school counselors about the HVACR industry’s many opportunities, and arrange for technician "ride-alongs," for students who are curious about the work.
"Get into the high schools, and let them see what the industry's all about, its earning potential, importance, and resilience. And, talk to counselors and parents," Fitch says
WHAT IS THE CONTRACTOR OF THE YEAR?
The ContractingBusiness.com Commercial Refrigeration Contractor of the Year represents an elite group: a forward-thinking class of commercial refrigeration contractors who are dynamic and professional in every aspect of their business. They constantly seek new ways to improve their businesses through quality contracting, and they strive for the highest level of customer service.
These contractors maintain superior treatment of their employees, customers, and suppliers. They establish a reputation as providers of superior products and services. They have an eye on the future, and are aware of changing market conditions as they respond quickly to opportunities in their niche.
These contractors follow strategic plans and maximize their returns on investment, and are always exploring new ways to improve their operations. They maintain high levels of communication within their organizations, are aware of changing market conditions, and respond quickly to opportunities. They’re the leaders of our industry. They’re committed to their businesses and the industry, and aren’t afraid to take calculated risks, and explore new market areas.
We welcome nominations at any time. Visit http://contractingbusiness.com/awards/contractorofyear/ for the entire list of our nomination criteria. Then, nominate your company or a colleague. Send nominations to Terry McIver, executive editor, at [email protected].