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By Richard Trombly | Industrial Distribution: September 2002 Despite steady growth, Transply, Inc. is still a family business at heart When entering Transply, Inc.'s York, Pa. headquarters,
a visitor is struck by the laid back, friendly attitude that permeates
the working environment. That is, in part, because of the family influence
on the business of this power transmission distributor. Founded in 1972 by brothers Ray and Dean Gross,
the company was made up mostly of family members during its early years.
Today, many of the Gross brothers' relatives still enjoy working at Transply.
The company also has attracted family members of employees to join the
team. Senior vice president Dean Gross, who has no children
of his own, pores intently over two oversized photo albums filled with
pictures, newspaper clippings, and mementos of the people and places of
Transply's 30 years. He recounts with fondness the history of each image
like a proud parent. "We really are a family, even though many
of the employees aren't related to us," says Dean. "We have
a lot of husband-and-wife teams who bring in more family members. Family
ties have been a successful way to find good employees." Coming from a family of nine children, the Grosses
understand the value of family. They are also active in their religious
community and have brought a sense of kinship to their business. "A business is made up of people, and that
brings with it many concerns," says president Ray Gross. "It
is becoming a struggle to afford it, but we pay 100 percent of the health
insurance for our families." The firm also provides many other benefits,
including profit sharing. The employees also share their noon meal. This
tradition started when the company was headquartered in Dills-burg, Pa.
A sister, Dorothy, now retired, worked in the shipping department and
served as the cook, making lunch for everyone and the whole company would
sit down to break bread together. Ray's wife, also the company treasurer
at the time, would fill in as cook when needed. Today, the company has
a chef prepare the meal, but everyone still eats lunch together -- family-style. In 1972, Ray and Dean founded Transply on a shoestring
budget of $8,000 cash and a $5,000 bank loan, with a former chicken coop
as a warehouse. Commitment to their dream of entrepreneurship, hard work
and a combined 23 years of power transmission experience started them
on the road to success. It helped that there were family members willing
to share in their vision, as well as the risks and rewards of starting
a small business. One pillar of Transply's success is its professionalism,
says Ray. "We wanted people to take us seriously, so
we had to take the extra effort," says Dean. "In keeping with
that philosophy, most of our salesmen wear suits." "It comes down to attention to detail,"
says Ray. "A salesman should look like a salesman." He pays nearly as much attention to the cleanliness of the office and the orderliness of the warehouse as he does to carefully tracking the financial numbers of the business. Ray keeps a daily ledger, on a large yellow accounting analysis pad, so he is continually aware of the profitability of the business. Finding the right mix That is not to say that Transply isn't using a state-of-the-art
computer system. The company recently brought its nine branches online
so that all information is available in real time. Having the best IT system, its own catalog and a Web
site were all part of an effort to better compete with the company's larger
competitors, says Dean. While Transply has never been the first to jump
on the bandwagon of a new trend, it tries to find the right mix to return
the best profit. That is important because the company is steadily growing
larger. By the late 1980s, Transply had nearly $9 million in sales and
five branches. The company made several acquisitions in the 1990s. This
growth meant that Transply left the chicken coop behind and moved to its
current location in York, a 10,000 sq. ft. former printing facility. Transply expanded the York warehouse by an additional
11,500 sq. ft. to make a distribution center. While all billing is central,
branches maintain substantial inventory, but Transply ships from the central
warehouse whenever possible. Unlike many distributors, Transply stocks
local inventory, says Ray. The distribution center is just part of the
mix. Adding to that mix, the company recently acquired another
location with the purchase of flat belt manufacturing company Apple Belting,
Lancaster, Pa. Purchasing power "All of our competitors are specialists at something:
bearings, electric motors, or hose, for example," says Ray. "I
am a specialist at purchasing." A former car dealership in nearby Dover Township and
the former Dills-burg location provide additional warehousing for the
company's extensive inventory. This expanded warehousing of products,
combined with a strong financial position and a long-term relationship
with the company's bank, allows Transply to buy in quantity and take advantage
of discounts, says Ray's son, vice president of operations Brian Gross. The company is a master distributor for some items because
of its ability to purchase and warehouse even large, uncommon items in
quantity. This is a service for vendors, competitors and end-users alike,
he says. Even with the available resources, Ray watches the inventory
closely. He uses the company's distribution software to track stock and
find out what isn't moving and what the company has been selling but not
stocking. "We continually adjust our inventory to match our
customers' needs," Brian says. "We will even stock items outside
of our primary products, for instance fans have been popular this summer." Transply stocks ladders, large plastic wastebaskets,
and many other items that you might not expect a power transmission distributor
to inventory. He says when customers ask if Transply can get something
unusual, they are often surprised to find the item already in stock. The family way "Transply is a company that really works to earn your business," says Karina Robinson, technical manager of The Goodyear Tire & Rubber Co., Quaker-town, Pa. "They have earned a place in our top 10 nationwide power transmission products distributors." The company focuses on serving its customers and it stocks
many odd-ball items, says Robinson. While other distributors can get the
products there overnight, Transply can get them there the same day. The
company's 50-vehicle fleet means there is almost always a driver that
can get the product there right away. Conveyor manufacturer Westfalia, Inc., of York, Pa.,
appreciates the robust delivery service. Purchasing manager Greg Koch
says vans will come twice daily when necessary. "They have strong power transmission expertise and
they love the business and the community," says Koch. "As they
increase their belting fabrication abilities, I foresee our business with
them increasing." Another company that shares Transply's philosophy is
Baldor Electric Co. The Fort Smith, Ark. motor manufacturer provides a
large inventory of motors and drives and relies on distributors like Transply,
says district manager Boyd O'Neal. "In MRO, you can't create demand because plant engineers
don't know in the morning what they will need by noon," says O'Neal.
"If you don't have it, the sale will be lost to someone who does." O'Neal says local inventory is the key to profitable
sales. "If I wanted it tomorrow, I'd order it tomorrow,"
says O'Neal. "Our most successful distributors carry good inventory." Dynamic duo The Grosses' strong, dynamic personalities have been,
in large part, responsible for the success of the business. Ray's expertise
in understanding customers' needs, purchasing, warehousing and attention
to profit, combined with Dean's attention to managing the various branches
and the activity of the salesmen to provide superior customer service,
has led the company through 30 years of growth. It isn't always easy for a first-generation owner to
let future successors take a hand at managing the business. However, it's
something that needs to be done, says Ray Gross. "Successions are a fragile thing," says Ray.
"It can be hard to sit back and watch things done differently than
I would have done them." Planning is a key part of a fruitful succession, and
the Grosses have planned extensively for the eventual transfer of ownership.
Since the company is closely held, Ray and Dean were the only stockholders. Ray's daughter and director of human resources Susan
Crone and his son Brian are purchasing portions of Dean's stock on a yearly
basis while Ray gifts stock to his children over time. Brian started the Valley Forge, Pa., branch where he
gained many of the operations skills he has today. Over the years, he
has learned from his father how to purchase and warehouse in Transply's
unique style. Ray says Brian is taking on an increasing amount of the
responsibility. Four other family members, Matt Crone, Ethan Harlacher,
Bob Kline and Monatto Smith are key parts of the management team, adds
Ray. While the other family members will not receive stock, they will
share in the company's success just as they have shared in the work of
building it, he said. "There are six great people to take over the job done by the two of us," says Dean. "So, overall, we feel good about it." It is important to have a solid plan for the succession
of the management as well as the ownership, says Ray. When the succession
is secure, parties seeking to acquire the business quickly lose interest. Sales manager Monatto Smith has been with the company
since he was in his teens. Now his own children are working at the business
on weekends and during the summer. Succession is one area that can be difficult, especially
when family members are involved in the company but will not attain a
part in the ownership. Smith says in this case, the lines of communication
have remained open and everyone is pleased with the situation. "It's a great company to work for, with lots
of opportunities and everything is handled family-style," said Smith.
"Communication is important in any business and positive or negative,
we are able to discuss everything." Smith has largely taken on the role of managing
the branches for which Dean Gross has been responsible. He opened the
Baltimore branch when he was 22 and ran it for 15 years before spending
the last five years developing his skills at Transply's corporate level. "Working for the family has been a great experience,"
he concludes. "Like any family, you get out what you put into it." COMPANY SNAPSHOT
COPYRIGHT 2002 Reed Business Information in association with The Gale Group and LookSmart.
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© Copyright Richard Trombly 2003
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