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Community Comes First

Dec. 19, 2013
With their bright red color, Republic’s delivery trucks are easily recognizable as their drivers travel the highways and back roads to customers throughout eastern Iowa and into southern Wisconsin and western Illinois. The trucks stand out, especially during November and December, when they resemble Santa’s distinctive red sleigh. The comparison is not too far off. For during the holiday season, Republic trucks are delivering not just HVAC and electrical products, they’re carrying winter coats, hats, mittens and scarves to distribute to local social service agencies.

Setting up large bins at its branches and in its customers’ lobbies and warehouses, Republic partners with a local dry cleaner to clean them so area families who may have gone without will stay warm during the winter. This drive, called Give Warmth, is just one of the ways that Republic has woven itself into the fabric of the community.

For a company that’s been in business since 1916, being part of the community is not an obligation but part of its DNA, says Republic President Mark Kilmer. “It’s deeply, deeply, deeply rooted in our culture,” he says. “We’re proud of all the activities that our employees are involved in. Giving back to the community is very important to us. All of our drivers really get into it. It’s a great win utilizing a collaborative group of resources.”

Give Warmth is one of many ways that Republic and its employees are involved in the communities where they have a presence.

The tagline, ResponseAbility™ focuses on the culture of speed and depth of technical expertise and was developed out of overwhelming response to a 2008 customer survey.

Kilmer touts the numerous employees who coach local sports teams (including a territory manager who has led a local high school girl’s soccer team to three state titles), work with nonprofit community organizations and their “adoption” of a local elementary school as part of the Big Brothers and Big Sisters program. “A lot of us have ‘littles,’ referencing the little brothers and sisters that Republic employees have taken on,” Kilmer says.

“It’s definitely part of the culture,” says Guy Pauley, Republic’s vice president of mechanical, who has served as mayor of his town. Republic also encourages community involvement by giving their employees the flexibility to give back while continuing to be productive at work.

Republic actively supports the Make- A-Wish Foundation, matching employee contributions to the organization 100 percent and working with Luxaire, a national sponsor of Make-A-Wish, to grant several “wishes” for children in Republic’s markets. “We like to try to tie in with a contractor or someone who’s really involved in their community as well,” Kilmer says.

A third-generation company, Republic has grown from its roots as a distributor for Delco-Light Plants, the initial 32-volt system for rural electrification that was truly the forerunner to the generators Republic sells today, and later as a Frigidaire distributor, pioneering mechanical refrigeration and air conditioning in the area. It still serves both the electrical and HVAC markets, encompassing a wide spectrum of business that includes energy management, hydronics, commercial rooftops and commercial refrigerants.

While the electrical and HVAC businesses are separate entities with distinct sales organizations, they are able to utilize shared services for delivery, marketing, IT, human resources, crib management and warehousing. “We think that’s an advantage for us,” Kilmer says.

Headquartered along the banks of the Mississippi River in Davenport, Iowa, Republic opened a branch in Dubuque, about 90 miles to the north, in 2001 and then in Cedar Rapids, about 90 miles to the west in 2008. “We treat each market as its own unique market,” Pauley says. “It’s the customers who set the direction – the services they need and the products they’re looking for us to support them with.”

The senior mechanical leadership team reflects Republic’s commitment to family and longevity with over 103 years of combined service, (left to right) led by Chief Operating Officer Tom Wagner, Vice President, Commercial Products Rick Cudd, Vice President Guy Pauley and 3rd generation owner and President Mark Kilmer.

About 60 percent of Republic’s business is comprised of residential, Kilmer estimates. The new housing market has seen steady growth of late, he adds, with the replacement business still sluggish, but starting to rebound. Growth in the commercial business continues to be steady, Pauley says, including strong traffic in hydronics. Led by Rick Cudd, Republic’s vice president of Commercial Products, a team-selling approach has helped fuel the growth in this market, Pauley says.

“Every one of our markets is very competitive,” Pauley says of their three branch locations. “It’s also very competitive for our customers.” With that in mind, Republic keeps a close eye and ear on what customers need now and may need in the future. It’s embodied in Republic’s brand promise that promises to work closely with its strategic vendors to provide the products, technical knowledge, customer service and fast response time that helps their customers remain successful and grow.

To make sure that its customers still believed this to be true, the business decided to take a good look in the mirror. Unwilling to let customers view Republic as a staid, old-line business, Kilmer brought in an outside agency to help the business rebrand its image. The agency did qualitative as well as quantitative research, which included surveying Republic’s customer base. The results … Republic’s Rapid ResponseAbility!™ helped to better focus Republic on what really mattered to customers: being as fast and efficient as possible so their customers could be as fast and efficient as possible. “What came back to us was the importance of speed and providing quick and accurate responses,” Kilmer says.

With those results, Republic laid out a massive investment in technology that included a new phone system, traditional and mobile e-commerce, a more efficient fleet management system and improved inventory tracking and management. The company even revamped how its salespeople provide quotes to customers and upgraded anything that would allow Republic to move faster. “We have a rapid response platform in place to do that,” Kilmer says.

These technological upgrades have resulted in a positive situation for both the distributor and its customers. “The idea is to make us more efficient in what we do, but also to create greater efficiencies in our customer base,” Pauley says. “Contractors only have so much time in the day. If we can do anything to help them be more efficient, then we’re all about that.” Kilmer adds that the business continually looks at new ways to create a better experience. “In every aspect of our business, we’re constantly taking a look to see how we can make it more efficient, trying to increase the speed of what we do.”

Kilmer says the company also took the focus on rapid delivery to heart, putting a greater emphasis on it than any other value-added services it could provide customers. Republic has since expanded its delivery service to go right to the end customer’s home, and it will pick up an old furnace or air conditioner. “We try to be dominant in the markets we service with our fleet,” he says. “We think it’s a strategic advantage. It’s expensive, but it’s a strategic advantage. Our local delivery service is a best-in-class arrangement.”

Republic also hopes to use this investment in technology, its customer service focus and community involvement to be the employer of choice for its industry in the region. “Our younger staff doesn’t want to just sit around,” Kilmer says. “They want to get out and go after it, get involved in their community and make a difference. We think our culture and direction help foster that enthusiasm.”

Republic is also making an investment in its employees by giving them incentives to get and stay healthy. The business pays for YMCA fitness memberships, pays their employees’ registration fees for charity walks and runs, and encourages involvement in working toward fitness goals. “We really encourage our people to get involved in a whole variety of activities,” Kilmer says. “We walk the talk.” The company has also added health savings accounts and other incentives that allow employees to save money on their health insurance. While Kilmer, who is personally committed to fitness and also serves on the Board of Directors of the local Genesis Health System, says it’s too early to quantify the long-term savings to the business, “the current is going in the right direction.”

Training remains an important component of Republic’s commitment to both its customers and employees. and Pauley says they have two of the best in the business with technical service advisers Steve Goodenough, who has been recognized for his work by both Johnson Controls and NaTe, and Mike kelly, a hydronics expert with more than 35 years of experience.

While Republic offers a number of certifications for its customers, it really stands out in its one-on-one training. Republic trainers will go to the customers and train their employees on specific topics. “We’ll even break the training down for two or three of their guys if the rest of the staff is familiar with the topic,” Pauley says. Republic’s territory managers are continuously asking customers about their needs and where they are seeing skills gaps. Republic will also train at any of their three branches or use a local community college training facility.

“We also invest a lot of time and money in our employee training,” Pauley says. Republic will send their people to courses offered by manufacturers or they’ll encourage them to take online courses. employees know that learning is ongoing – and encouraged – by their leaders. “every one of our guys has open enrollment so they can get the training they need,” Pauley says.

When it comes to working with its vendors, Pauley says they are adamant about having clear expectations. “We sit down with them quarterly, if not more frequently than that,” he says. Republic also engages with them in annual strategic planning sessions to review plans for one, three and five years out. These regular meetings are also good opportunities to meet as many people as possible within different organizations and see their plants. “We’re very proactive in getting to their facilities, getting to meet their people,” Pauley says. “We don’t wait for the invitation. We ask if we can meet these folks.”

Republic’s involvement in BLUE HAWK has also helped strengthen its relationships with its vendors and has given it a greater voice in the industry. as a member of BLUE HAWK and the IMARK Group, a similar organization among electrical distributors, Pauley says they are able to share and learn best practices from other distributors. He also notes that Republic was voted as the IMARK Group’s Member of the Year in both 2010 and 2011 in its class.

To drive greater awareness for Republic and its customers, Republic’s marketing group works with them on advertising and other promotions. “Right now, we’re big on energy and lighting audits, and they’re helping to brand these programs,” Kilmer says of the marketing group. Its energy management division is part of the electrical side of Republic’s business, but it’s another example of how the different lines of businesses create greater visibility for the entire business.

Republic at a Glance

President & CEO: Mark Kilmer
Vice Presidents: Guy Pauley, V.P. – Mechanical Division
Rick Cudd, V.P. – Commercial
Chief Operating Officer: Tom Wagner
Headquarters: Davenport, Iowa
Operations: Davenport, Cedar Rapids and Dubuque (Iowa)
Employees: 74
Major Product Lines: Mechanical Division: York, Luxaire, Bosch, Mitsubishi, DuPont, Honeywell, Southwark. Electrical Division: Square D, Osram Sylvania, Hoffman, Hubbell
Year Founded: 1916

Best Practice

Republic’s Delivery Services
Definition and Example:
Knowing our customers’ biggest cost is manpower, we put a premium on their time. It is our goal to provide a delivery system that keeps our customers’ employees on the job. Our team of drivers will deliver anything from a box of wire nuts to a 40-ton rooftop unit if it means keeping our customers more productive in the field.

Our “special deliveries” are at the top of the list because we put an emphasis on delivering directly to the jobsite exactly when required. While delivering residential and commercial units, we also offer a disposal program that allows our customers to have the old units out and ready to go when we arrive, and we will take care of the disposal. This not only saves them time at the job but also saves them time back at the shop.

Significance: Our delivery services are all about speed and making certain we give our customers the best opportunity to increase their bottom lines or give them the chance to take a more aggressive approach on bidding a job, knowing we have the cost of delivery covered, and the materials will be there when needed.

Benefits: Speed, assurance and reliability along with an overall logistical cost savings are the biggest benefits. Our reputation of delivering on our promise pays large divi-dends back when we are recruiting new business. This service certainly sets us apart and is not easily duplicated from our competitors without a large capital investment.

Procedure: When a customer calls, our inside team is equipped to schedule our deliveries, and they take the Response- Ability in making sure our customers are taken care of right away. They utilize a scheduling program that shows open times, and they can fill in the next delivery as it comes in. Tom Sokolik, vice president of operations, views it, and his team takes it from there.

People involved: Our delivery service encompasses our entire team, and each person’s role is vital to its continued success. Our front line staff truly deserves all the credit. The process starts with our inside team taking accurate orders, followed by our warehouse team, to make certain they pick accurate orders, and then finished off with on-time delivery by our delivery team.

Timing: We have a set delivery route system for each week, and we fill in with our “special deliveries” as needed. Our customers who can wait for their set route can call in any time before our trucks leave and add to their order. Our customers can call in for a special delivery, and we will find a way to get their delivery to them right away.

Cost: We charge our customers when providing these services to partially offset the costs incurred. Not only do we have the normal driver wages plus fuel and vehicle maintenance costs, but we also have a significant fleet investment. The amount charged is a flat fee based on the type of delivery and miles involved. A delivery using a semi and flatbed trailer timed to coordinate with a crane operator placing a unit on a rooftop is more than delivering a system to a home on a straight truck. The cost to our customer is nominal as compared with the cost they would incur using their own equipment and people.

Contact: Tom Sokolik, vice president of Operations, 563/322-6204, or [email protected].