Young Supply: The Principles of Success

Aug. 1, 2014
When we have a dismal service experience, we often blame the salesperson. And yet, we know that sometimes the responsibility truly lies with management for not properly training the individual and also being haphazard when it comes to explaining what is expected of them. Not so at Chesterfield Township, MI-based Young Supply Co. Their 5 Points of Performance Principle, which every employee, new and experienced, follows, is a testament to conciseness, lucidity and practicality.

Left to right: Ron Vallan, VP of Marketing; Joe Bobzin, director of Purchasing; Jim Falletich, VP of Inventory Management & Purchasing; Anthony Vallan, COO/GM; Ronald Vallan, president/CEO; Richard Levin, secretary/corporate council; Dave Cornett, CFO/treasurer; Ron VanderMeulen, VP of Branch Operations; Jason Sinacola, director of Information Technology; Colette Helm, controller.

With 17 branches spread across northwestern Ohio and throughout Michigan, Young Supply Co. serves markets big and small, with customers ranging from the single contractor working for himself to some of the biggest companies in business today. While the markets and customers are varied, its more than 160 employees are committed to a simple set of principles created to meet the needs of its customers so that Young Supply remains their supplier of choice.

These five Principles of Performance are given to each Young Supply employee, and they spell out what is expected of each of them, not only as it relates to their relationships with customers but how they are expected to add value and fulfill the needs of their vendors and employees, too.

Based northeast of Detroit in Chesterfield Township, Young Supply has been living its principles of customerfocused service since 1935 when Leon Young started the company in Detroit. Working at a company that supplied tubing and pipe fittings for the refrigeration industry, Young saw the emergence of fluorocarbon refrigeration and air conditioning and recognized there was an untapped market. The business started out in refrigeration, selling compressors, refrigerants, tubing, fittings, belts and pulleys. It wasn’t until 1997 that Young Supply got into the HVAC market, says Chief Operating Officer Anthony Vallan.

Vallan represents the third generation at Young Supply. His grandfather, Dominic Vallan, was one of the first five employees hired by Young. In the 1950s, Young sold the company to a group of employees that included Dominic, who became president of Young Supply in the 1960s. In 1984, Dominic’s son, Ron Vallan Sr., was appointed president and remains in that role today.

Young Supply’s growth over the years from Detroit to 17 branches spread across two states fits the description of steady expansion. Much of Young Supply’s expansion occurred in the 1960s and 1970s across Michigan. It wasn’t until 1997 that Young Supply opened its first branch in Ohio in Holland, south of the Michigan border and about 15 miles west of Toledo. “Our growth has always been centered around people,” Anthony Vallan says. “If we have the people and the density to go to another market, we will.” It shows that Young Supply takes to heart their customers’ needs.

Best Practice Editor’s Note: When I read Young Supply’s Principles of Performance, it seemed like the perfect “Best Practice.” Rather than distill it to fit our format, I decided to reprint it in its entirety. It serves as a superior model for any wholesaler who wishes to crystallize what they do for everyone with whom they conduct business.

Principles of Performance

It is the mission of Young Supply Company to become our customers’ supplier of choice, our vendors’ distributor of choice, and our employees’ employer of choice. We will provide a level of service exceeding the expectations of our customers and the companies we represent. Each day, we will make every effort to add value and fulfill the needs of our customers, vendors, and employees.

To deliver on this mission I need to commit to the following principles for the good of the company and myself…

1. I am responsible for knowing our systems and procedures, understanding that this knowledge makes my job easier while giving the customer better service. I will strive to make Young Supply an easy company to do business with which will result in loyalty from vendors and customers.

2. I need to learn about the products and services we offer regardless of my department or job responsibility. The more that I know about what we sell, the better prepared I will be to serve our customers, my fellow employees, and myself. I will use my personal copy of the Young Supply catalog to increase my knowledge of our product lines.

3. I have to value both the customer and the vendor, understanding that they are the key to our overall growth. I need to understand that a negative action on my part can change the view of that person on the entire company. I will show gratitude and hospitality by offering refreshments, or assisting them in any way I can.

4. I should always approach all of my responsibilities with a sense of urgency. No matter what I am doing, or who I am helping, I will make that issue important. I understand that orders and transfers should be filled on the same day that they are received. I also am aware that quotations, questions, and inquires should be taken just as seriously because these also give impressions of Young Supply.

5. I understand the importance of coming to work each day with a good attitude. I need to be aware that every employee’s attitude reflects on the organization as a whole, and negativity drags us all down. I am an important member of our team, and if I cannot make a positive contribution to our environment I will consider other employment options.

As their customer base grew at the Grand Rapids branch, located in the southwest part of the Michigan market area, customers asked for a branch closer to them, he says. “Customers were complaining in the Holland (MI) vicinity that they had to drive every day to get their stuff, and we were losing business to the local guy, so we opened a branch there, selected a manager and moved to Holland,” Vallan says. [Editor’s note: Holland, MI, is about 30 miles southwest of Grand Rapids, MI. Holland, OH, is about 11 miles southwest of Toledo, Ohio. The two “Hollands” are about 205 miles apart.] “That’s how we grow.

Branch managers are the “eyes and ears” of Young Supply, Vallan says. “The managers have open authority in making decisions regarding their branches.” Customers have the assurance that if there’s a product they need, their local branch will supply it for them. One of the key differentiators for Young Supply, he says, is its extensive inventory. “We understand that if we don’t have it, we can’t serve the customer.” Trucks run from Young Supply’s distribution center in Detroit daily to its branches in and around southeastern Michigan while the outlying branches receive shipments anywhere from two to four times a week.

Talk to anyone at Young Supply and you’ll quickly realize that they are steeped in knowledge of HVACR and the distribution business. All but two people on their management team – the controller and the head of IT – came from one of the branches, Vallan says. The vice president of branch operations, for example, was a branch manager for 35 years, he adds. “We understand the business from the top down.” Among the operations team, branch managers and sales directors have an average of 25 to 30 years of experience with Young Supply. “We always look to promote from within,” Vallan says.

Young Supply is comprised of four main sales sectors: Refrigeration, HVAC, Food Service Equipment and Industrial Sales. Each of these four sectors has a director, each having territory managers who report to them. Young Supply’s sales teams do not work on commissions, Vallan says. “What I found in my research and what I’ve read is that when you pay on commissions, the only customers who get taken care of are the ones for whom they get the highest commissions,” Vallan says. Not paying commissions, he notes, encourages the sales teams to seek out new business and cultivate relationships that may take time to form but have longterm results.

Young Supply at a Glance President & CEO: Ronald Vallan COO: Anthony Vallan Vice Presidents: Dave Cornett, Finance; Ron VanderMeulen, Branch Operations; Ron Vallan, Marketing; Jim Falletich, Inventory Management Controller: Colette Helm Headquarters: Chesterfield Township, MI Operations: 17 locations in Michigan and northwest Ohio Employees: 168 Major Product Lines: Rheem, Bohn, Mitsubishi, Emerson Annual Sales: $78 million Website: Year Founded: 1935, Leon Young, founding owner. Ronald Vallan, son of Dominic Vallan, who would eventually lead the company, was one of the initial five employees.

Last year, Young Supply added Rheem to their product line; Vallan says this has already been a win for them and its customers. “It’s been phenomenal,” he says. “We couldn’t be happier. It’s a top-quality product that is very competitive and has an unbelievable commercial lineup.” Vallan was also enthusiastic about Rheem’s line of hot water tanks – one of the largest hot water tanks and tankless products in the world. Taken together, Vallan says, “It’s a truly complete line.”

Young Supply worked closely with Rheem to make a tremendous splash in introducing its full lineup to its customers, Vallan says. The rollout began with a major launch party in downtown Detroit, and Young’s territory managers and sales teams have been nonstop ever since, promoting Rheem on their trucks and doubling their Rheem dealer incentive points to allow them to qualify for dealer trips. “Our territory managers have done a tremendous job in keeping our relationships intact,” he says, noting they’ve been able to keep a large majority of their customers.

Customer and employee training have always been big parts of how Young Supply does business. From Young Supply’s specialists to vendors who bring their own specialists in for technical questions, customers are assured of getting answers. “We have Rheem specialists on staff who troubleshoot Rheem; we have quoting specialists who quote commercial jobs and rooftop jobs,” he says.

Left to right: Steve Niezur, director of Comfort Engineering Solutions; Fred Kuiper, director of Foodservice Sales; Terry Tarantine, director of HVAC Sales; Ken Sarzynski, director of Refrigeration Sales. (Not pictured: Paul Lang, director of Industrial Sales.)

Training centers at three branch locations make it easy and convenient for customers to attend classes. The training center at the Farmington, MI location is an authorized Mitsubishi facility with running equipment. Young Supply worked closely with Mitsubishi to set up this facility, Vallan notes. “We are constantly training; in fact, excluding the summer months, we offer training every other week,” Vallan says. For Young Supply’s major product lines, its sales teams will hit the road and bring product training to customers.

Vendors like Emerson, Heatcraft and DuPont are all valued partners who are critical parts of Young Supply’s success, Vallan says. He notes the third Young Supply principle that states both the customer and the vendor “are the key to our overall growth.” Young Supply territory managers are required to reach out to a vendor or a manufacturer’s rep once a month to ensure that they have an updated understanding of the bigger issues in the field and that they are keeping open the line of communications. This also allows vendors to contact Young Supply customers and have open conversations about what’s working and what’s not.

Much of the HVACR business today is increasingly commoditized, Vallan says, which pushes the lowest price to dictate sales. There are 54 different brands of air conditioners being sold in the market at any one time, Vallan explains. “That’s the problem with our business. Even though our entire industry doesn’t amount to Ford’s annual sales volume, everyone wants to commoditize the business.” Distributors like Young Supply are in a constant battle to make the sale based on the value of products to the end users.

To help Young Supply better serve architects and engineers, it has a division, Comfort Engineering Solutions LLC, to work with them directly. The four engineers who make up this division work with architects and the engineering community to get products specified on projects. With this information, the project engineers and architects are better able to work with their clients throughout all phases until the project is completed.

While the decline of Detroit has been well chronicled, Vallan says there are many reasons to be optimistic about the city’s future. A new stadium for the Detroit Red Wings is under way, a new commercial park is being built and there are medical buildings, office space and restaurants coming on line. “There is a lot of growth and rebirth occurring in downtown Detroit,” he says.

The rest of Michigan is doing well, Vallan says. That means lots of opportunities for Young Supply to roll up their sleeves, apply their Principles of Performance and get to work. “You have to get out there and do your job better than anyone else. Every day. Period,” he says.

“We are committed to excellence, we hold ourselves to a high standard in the customer service we offer, the product lines we represent, our business operations and the employees we hire and the benefit package that we offer them,” Vallan says. “That is why we are ISOcertified 9001-2008, 14001-2004, to ensure to ourselves that we maintain a standard of excellence.”

Michael Maynard is a contributing editor based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected]