Crane Report - English

P U B L I S H E D F O R T H E P E O P L E O F C R A N E S U P P LY

JUNE

S t ra t e g i c D e p loy me n t Placing the strategic plan into action

INSIDE PAG E 3 Meet the people making it happen

The Crane Report begins a series of profiles of outstanding employees

And the winner is...!

Who are the latest members of The President’s Club

For three days in January, Toronto hosted the Crane Supply Strategy Deployment session. This was the largest group of Crane Supply managers ever to gather in one place. Their goals?

To break down the company’s strategic vision into a series of objectives for the next three years, and then create a detailed action plan on how to reach those goals.

Sounds simple, right?

Actually it wasn’t, but the results have proved well worthwhile.

See story next page

C ra ne c e le b rates 1 5 0 years The Resolution of R.T Crane “I am resolved to conduct my business in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just towards employees and to put my whole mind upon the business.”

—RICHARD TELLER CRANE JULY 4, 1855

PAG E S 4/5 Standardizing the inside sales desk

How a Kaizen event struck gold in Toronto

Few Companies survive long enough to celebrate a 50-year anniversary, much less 150 years. This year marks the 150th year since Richard Teller Crane, a 23-year old machinist with rather limited experience, started his business in Chicago. He cast lightning rod tips and couplings in a 14 x 24 foot woodshed he built himself, and he worked by the same code of ethics to which Crane subscribes to this day.

values and principles. We will take stock of today, and celebrate the 150th anniversary through shared experiences for employees at every Crane business.

In 2005, Crane celebrates our founding values and the many things we have in common as Crane employees.

During this anniversary year we look toward building a common understanding and fuller appreciation of Crane’s

Crane Co. has changed much since 1855, but we remain true to our core values. Today we are a global company.

R.T. Crane’s commitment will continue to guide us to success in the 21st century.

The Crane 150th anniversary website has more about Crane’s history, our values and our future as we move through 2005. Have a look at upcoming events, stories and merchandise at www.crane150.com.

The Crane Repor t gets a makeover You’ll have noticed that the magazine in your hand looks a whole lot different.

We’ve freshened up the look of The Crane Report for 2005, with an eye to keeping it consistent with the Crane Supply image. We hope you enjoy the new crisp look.

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Strategic Deployment The Strategy Deployment Process has now been rolled out to all Crane Co.’s business units. The session was led by Crane Co.’s Max Mitchell.

The point of the exercise was to have everyone participate in setting goals. Participants had deliberately not been given advance agendas so that they would arrive with open minds and no preconceptions.

Together, they decided on the goals the company would target. The only stipulation was that the goals must be high enough that they will force the company to “stretch” to reach them. These stretch goals are the key to achieving the profitable sales growth the strategic plan requires.

Once they’d set the goals, the group developed detailed step-by-step plans to meet them. Now there is to be regular monthly reporting. Ruth Spriggs has assumed the responsibility of SDP co-ordinator, driving the process through to the priority owners. Eventually four senior executives—Roy Byrne, v-p of operations, Steve Deck, v-p of sales and marketing, Tim Spears, chief financial officer, and Barry Tansley, director of valve sales—will report to Tom Frazer who, in turn, will report to Crane Co.

It is a brand new concept for Crane Supply.

Here is what the four key execs say.

Roy Byrne

Periodic “Breakout Sessions” were a great opportunity for small group discussions

It was an intense three days. We had input from everybody. Specific stretch goals were assigned to managers across the country – district sales managers, operations managers, regional managers, everyone. A process, along with documentation, clearly establishes ownership. It’s important that these goals have been agreed to, not dictated.

The concept of “stretch goals” is crucial. Max Mitchell used the analogy of pole-vaulters. If they want to make it over that bar, they actually have to set their sights higher.

Steve Deck This was the first time we had managers from all locations

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come together in one place. That supports our ultimate goal of having the same policies, procedures and focuses at all the branches. That’s how we will truly act and function as one company, focused on profitable sales growth.

The Strategy Deployment process is pretty amazing stuff.

There are stretch goals for everybody. A binder breaks it all down into detail. By following the process it maps out, we get everyone focusing on the initiatives that will have the greatest impact on our business.”

Tim Spears With our busy schedules and the pace we set, we never get a chance as a team to develop, review and discuss company goals. What a great opportunity to do so! I like the fact that it creates an intense focus on achieving those “stretch” goals where the whole management team is involved and everyone wants to win.

And the great thing is you can already see the effort paying off in the positive attitude and focus of employees across all regions, and also in our numbers.

Barry Tansley The session was very worthwhile. The discussion and group work forces you to really think about how you grow your business. It challenges you to put an action plan in place.

Max Mitchell started the first day by asking us to decide the key areas to focus on, and then to develop objectives.

He challenged us to figure out exactly how we are going to achieve these objectives. It is all very logical and systematic.

You drill down from your goals to your action plan, and then you work it all backward. Once you get it on paper, it becomes your road map to success.

Setting the stretch goals really helped. You may think you can only achieve a goal of, say, ten but if you make that your goal, how do you know that you’re not capable of reaching 15? ■

Strategy Deployment It’s a process, a systematic approach to managing change in critical business areas that leads to sustainable breakthrough performance.

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J o i n t h e C lu b !

The results of the 2004 President’s Award are in.

These awards go to the district sales managers (DSM’s) who most increased their sales dollars over the previous year. (As a group, the DSM’s finished their 2004 sales up 10.3% over 2003.)

Susan

This year’s winners: Mike Kilroy Dwayne Windrum Eric Savage Dwayne, the first to win the award for a second time, and Eric each received a customized Crane Supply watch from Movado.

As first place winner, along with the watch, Mike also won a trip. A true northerner, this DSM for Northern Ontario, broke with tradition and, instead of flying south to enjoy the balmy climes of the Bahamas, opted for a ski week in Aspen.

An avid and experienced skier, Mike and a buddy take ski vacations across North America each year. This year the price certainly was right! ■

The Pre s i d e n t’s C lu b 2002 Keith Large Barry Tansley John Nault Dwayne Windrum

2003 Glen Kellaway Don Plamondon Randy Feininger

2004 Mike Kilroy Dwayne Windrum Eric Savage

B e a C ra n e R ep o r ter Along with the new look of The Crane Report we’ve launched a new series of articles profiling employees who are making a difference.

We’re eager to hear your suggestions for subjects, and you can email them to: cranereport@employeecommunications.com You can also email any story ideas or photos of company events. ■

Making it Happen Profiles of Extraordinary Employees Crane Supply’s strength comes from its people. In this issue we begin a regular feature to meet more of the people who are building the company’s success.

As she leans across the counter of the Winnipeg warehouse, 37-year-old Susan Gill cracks a joke and shows an easy smile. Her rapport with clients is smooth and, as pressure builds, her satisfaction grows too.

Twelve years working as a bartender is perhaps an unusual training ground for working at Crane. But dealing with customized orders, a fast pace, a huge range of products and having the people skills needed to shave the hard edges off even angry clients are skills needed by someone who serves drinks and someone who serves plumbing parts.

“I like the pace,” she says. “The constant pressure and the fact you have to keep organized or the whole day can fall apart.”

When Susan started working at Crane two years ago, she often wondered how she would ever get organized in a place stocking 9,000 separate parts, many of which she didn’t know.

“Lots of times in the early days guys would ask for things and I’d get that deer-in-the-headlights look on my face,” she recalls with a laugh. “But most of the customers were good with me and I really worked on getting to know the products.”

Today Susan figures she has a good knowledge of about 7,000 of the items she sells. Her co-workers chuckle that she hardly ever stands still at the order desk; she’s usually a blur, charging down a product aisle pushing a cart at “40 miles an hour”. It’s that requirement for speed, efficiency and knowledge that Susan likes best about her job as a counter sales representative. “I like the challenge of not knowing what’s coming next.

“Every day it’s constant change and you never know what you’ll be dealing with.”

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K I gZEN C l eA anin H o u s e in To ro n to How a Kaizen event standardized inside sales processes and workstations and uncovered a treasure trove of improvements Seven hundred pounds!

That’s the total weight of the unnecessary files, catalogues, cabinets and assorted clutter a Kaizen team got rid of during a four-day event in February.

Mike Murphy, operational excellence coordinator, rightly considers that a triumph.

But first, what exactly is a Kaizen event?

Mike Murphy

The word itself is made up of “Kai” which means “Change” and “Zen” which means “Good”. The term refers to orderly, continuous improvement. As a business strategy, Kaizen is committed to sustained, continuous improvement. The concept reasserts the importance of the shop floor, of the people actually involved in business processes, in bringing about continual improvement.

A team effort The strength of a Kaizen event comes from its participants. Here is what some commented.

Matt Balsom, Calgary “It was overdue. You need to have a standardized workstation and work practices, especially to help someone moving into sales from the warehouse. If the workstation they move into is neat and organized and the way they are to perform their job is clearly mapped out, it makes the transition easier and increases their chance of success. This can also be beneficial to new employees.”

Steve Nelson, Toronto “The whole process was interesting and enlightening. It was hard to believe the amount

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At Kaizen events, a cross-functional, multi-level team of five to ten members comes together to study a particular work process, focusing on improvements linked to Growth, Safety, Quality, Delivery, and Cost. They typically spend three to five, intense 10 to14 hour days, during which they analyze the work flow, isolate any problems and rapidly develop, test and refine solutions. Before they are finished, they implement their improvements and then roll out their findings across the company. Crane Supply has been staging such events for several years. They’re the cornerstone of its lean distribution business strategy.

For the February event, five inside sales people from across the country joined Jag Kandola and Steve Nelson of Toronto inside sales to look for ways to standardize inside sales’ work processes and workstations.

Completing the team were Mike, Crane Valve Group president Dennis Hewko, and Crane Co.’s Enterprise Master Black Belt, Chris Vanderwood.

Mike realized that, before they could even think about improving work processes, “we needed to start from the ground up. There was clutter, with unnecessary files and paper. For example, there was a large stack of files in one rep’s worksta-

of stuff we uncovered that was completely unnecessary. The headsets we now use are great. They free us to enter orders directly into the system and to physically go and check stock while the customer is still on the phone.

“We’ve also been able to delegate some of the purchasing we’d been doing to the purchasing department. That frees more of our time to focus on sales.”

Jag Kandola, Toronto “It is definitely easier to find stuff and do our job now. After getting rid of so much paper we didn’t need, the priority now is to stay on top of everything.

“The trays are great. They make it easy to keep track of time-sensitive, urgent and nonurgent cases. All my current files used to just

sit on my desk. Now my manager, Glen Kellaway, can easily see what I am working on, and keep track of my priorities..”

Although not on the Kaizen team, Toronto senior administrator Theresa Taylor played an important part in the 5S effort.

Theresa Taylor, Toronto “I couldn’t believe all the stuff we were able to get rid of. There were files dating back to when Tom Frazer was regional manager and I was his assistant. I sorted all those; any files about finances or human resources are now under lock and key in the corporate ‘cage’.

“We now operate under the ‘If you haven’t looked at it in a year, chances are it should be gone!’ rule.

Here are just some of the issues they identified, and solutions that are currently being tested Issue: The sales reps were handwriting the orders they received tion. They had been there when he took over and he hadn’t wanted to throw out anything that might prove to be important,” notes Mike. “That is all well and good, but he took over that job two years ago!”

Here was an ideal moment to apply the “5S” system.

The five S’s are: ■ Sort: Identify and eliminate what is not needed ■ Set in order: Have a place for everything and keep everything in its place ■ Shine: Create an effective, organized, professional environment ■ Standardize: Develop standards and stick to them ■ Sustain: Make 5S’s a way of life The 5S’s are a crucial part of the lean distribution business model that will be implemented across all 33 locations.

The results? Spectacular!

By sorting through what was really needed, they removed a whole skid load of files, boxes and cabinets. While files dealing with financial and human resources must be retained, much of what is filed is no longer needed after a while. “It is like that junk drawer we all have at home,” Mike suggests. “Things just tend to accumulate. But chances are, if you haven’t used something for a couple of years, you don’t really need it.

It is the same with our own work area. Keep only what is necessary to perform your job, remove everything that is unnecessary.”

while on the phone then inputting them into the system. A “non-value added” step.

Solution: Sales reps now wear headphones, freeing their hands to input orders directly into the system Issue: There was no standard work flow or instructions Solution: Standard work flow and instructions, including step-by-step system entry with screen shots are now on each desk Issue: Inside sales people were doing no proactive selling Solution: The Proactive Sales Initiative now includes a standard process to identify customers to contact, a call script, and database requirements for tracking progress Issue:

Before-and-after photos reveal dramatic changes at Toronto inside sales.

Incoming faxes were sometimes left languishing at the fax

Where once there were piles of paper, there is now clean, uncluttered desk space. Where there were multiple copies of catalogues, there is now a single, central shelf with a numbered library of catalogues. For active files each station now has three trays labeled, urgent, time-sensitive, and non-urgent.

machine Solution: “Fax masters” at each location have the responsibility to check incoming faxes and distribute those that are time sensitive.

Crane Supply is striving to become a world class 5S organization, Mike says. “When you look at your workstation, does it look like part of a world class organization? A disorganized work station filled with clutter, piles of paper and post-it notes all over the monitor does not give that impression, and it won’t make us become that organization.”

Once they had removed what wasn’t needed and organized what remained, they were able to analyze the workflow of the inside sales process and develop recommendations for improvement (see box). If these recommendations now prove successful for the Toronto team, they’ll be rolled out across the country.

“The goal of a standardized work station and work process is crucial,” Mike explains. “Of course there will be regional nuances, but developing standardized processes of how we do business is key to the success of the continuous improvement process. Without standards there can be no improvement.

“The slogan for Operational Excellence at Crane Co. is ‘Everyone, Everywhere’ and I’m looking forward to holding Kaizen events across all the regions, and involving as many people as possible.” ■

The kaizen team Standing: Yves Senecal-Montreal, Chris Vanderwood-Crane Co., Steve Nelson-Toronto, Paul Traverse-St Johns, Peter CastellanoHamilton. Matt Balsam, Calgary Seated : Jag Kandola-Toronto, Michael Murphy-Toronto, Norm Schroeder-Saskatoon, Dennis Hewko-Crane Valves

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W << C a p i t a l i z in g o n we s tern o p por t unit ies “An important aspect,” he explained, “is that here we have a smaller population in a large area so, by necessity, we have to play in other markets in addition to the core PVF products.” His team is very active in the hydronics heating market and in plumbing, both industrial and contractor.

“The opportunities for us in the Alberta marketplace are huge,” declares Crane Supply president Tom Frazer.

To make the most of them, he made some organizational changes.

As regional manager, Leo Payette had made good progress in finding and exploiting Alberta opportunities. Therefore, explains Tom, “in December, we decided to let Leo focus his energy there 100 percent.” Don Plamondon took over as manager of the mid-west region, responsible for the Brandon, Winnipeg, Regina and Saskatoon branches.

Don’s a Crane Supply veteran. He started out in the Saskatoon warehouse 20 years ago, and has held increasingly responsible positions since, most recently as district sales manager for Manitoba.

He’s really excited about a couple of new product lines, especially the Transair system, and a new sanitary product.

Winnipeg is an important hub for the pharmaceutical industry. Biovail, Apotex and Cangene all have facilities there. And they all require sanitary product. “Even though we didn’t carry the sanitary product before, they were still Crane Supply customers. Now we can offer them this line as well, and allow them to ‘bulk their spend’ with us.”

Don

“He’s a strategic thinker,” says Tom, “continually figuring how to grow sales and find opportunities. He’s results oriented.

He’s good with people.

“In short, he gets it.”

Don spoke recently about his new role and the opportunities he sees for the mid-west.

Don has a personal challenge in getting back into the Saskatchewan market. Although he was originally from there, he’s been in Winnipeg for some time. “This business is all about relationships,” he noted. ”I’m working hard to make sure I get to know all the customers in the mid-west market, and that they feel they know me.” ■

S T R A T E G I C

U P D A T E

with Tom Fraz er, president Looking ahead to the rest of 2005, we have set some ambitious yet achievable areas for growth.

Sales Growth Targets for 2005 ■ Core products to core segments $4.5 million

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Target accounts $3.7 million

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Crane manufactured valves $2 million

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Grow e-commerce sales a further $3.5 million

2004 was an important year for Crane Supply.

For the first time, we realized our goal of profitably growing our sales, and achieving our consolidated sales plan.

Congratulations! We are thinking and acting like a growth company.

Four Keys to a Successful IT Strategy ■

Good people Good processes and procedures ■ Excellent technology ■ The right attitude ■

“It’s that fourth one, the right attitude,” declares Maurice Pozzi,” that is really crucial.”

Crane Supply’s new director of information technology goes on to explain, “Everyone in Crane IT must have a mindset recognizing that everyone they deal with is their customer.

Whether they’re Crane people or external people, we exist to serve them. We must always remember that.”

There are two parts to the IT department’s function: reactive and proactive.

Maurice

IT at Crane Supply: Moving right along In late February, Crane IT launched its new .NET e-commerce architecture platform, a leading-edge technology that will accommodate company growth for the next five to seven years.

The platform is designed to let 400 concurrent users

In its reactive role, the department tends to the day-to-day activities that keep the business functioning; ready to assist customers, internal or external, address all problems and changes that arise. Quick issue resolution through friendly responses and streamlined processes and procedures is the key here.

achieve a mean response time of no more then two

In its proactive role, Maurice explains, “the IT staff leverage their knowledge of current and emerging technologies to drive down the cost of the current IT infrastructure as well as the development and deployment of innovative cost efficient business solutions.

eliminates the performance issues some customers

“That’s how we use IT to leapfrog ahead of the competition.

Wherever possible, we want to create a competitive advantage.”

It is that role—finding ways that IT can differentiate Crane Supply from its competition—that Maurice was given as mandate when he joined the company in January.

seconds. This opens the doors wide for the sales force to sign up new customers and confidently encourage them to use the e-commerce platform, which now

previously experienced.

Here is what two customers had to say: Glen Stirling (Black and McDonald): “Wow! What a difference in the speed...”

Perry Snedden (Neepawa Plumbing and Heating Ltd.): “... I am very impressed with the support and response you offer with the online service. I am very pleased!”

He brings extensive experience, most recently as IT manager at TNT Canada Inc., and, prior to that, at Hewlett-Packard Co. Professional Services Organization.

Other improvements: In March a new “Help Desk”

What are his initial impressions of the company?

and the user community with a more effective tool for

“I was really impressed by employee loyalty—The number of employees with over 30 and 40 years of service is a pretty good indicator of a company that treats its employees well.

submitting and tracking IT requests.

“It was also very clear to me that being a team player and being able to fit into Crane’s culture are very important here.”

and helps the IT staff to more efficiently manage their

That was made very obvious even before he joined. “For my second interview,” he recalls, “they had the entire IT staff present.” ■

friendlier dynamic view of their work load.

system was launched, which provides both the IT team

The new Help Desk integrates with Microsoft Outlook

daily tasks and projects by providing them with a

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A Mes s ag e f rom De n n i s H ew ko, p r e s i d e nt Crane Valves Recently we appointed Tom Frazer president of Crane Supply, following his twenty-some years of internship. Tom brings with him a strong passion for the business and a focus on profitable sales.

Tom developed a strong focus on how to maximize the profit of a sale when we he was the Toronto regional manager and he continues to share this zest with his new managers.

The challenges in the business continue to increase as we differentiate our service levels from our competitors and ask for a premium price for our services. With Tom’s strong understanding of this model and his experience in executing, the organization is very fortunate to be able to leverage this knowledge. His very hands-on approach and detailed knowledge of the processes allow him to be very effective in coaching future leaders of the company.

Tom has complemented the senior management team with new hires who bring fresh ideas and will assist the organization to achieve the new vision of “growing profitable sales “. The challenge is how to retain our margin levels and grow the revenue.

Tom has always been process focused and we need his leadership as the organization implements operational excellence to develop standard work, improve productivity and reduce waste.

Improving our processes will allow the organization to improve the customer metrics (on-time delivery and fill rates) which, as a customer-focused organization, are important to us all.

Crane Supply is a leader in the industry. Tom’s leadership will ensure that this organization continues to lead. ■

N o z-C h ek A “solutions valve” for special needs Crane Supply is the sole distributor for Canada of the Noz-Chek line of Check valves, manufactured in Belfast by Crane Stockham. While all Check valves prevent the backflow of liquids and gasses in pipelines, only Noz-Chek provides minimum pressure drop and maximum pipeline protection. Byron Helmer became Crane Supply’s national sales manager for the line in November.

“Byron really took a shine to the Noz-Chek line,” says Barry Tansley. “He has had great success with them in the oil patch, and we are now looking to roll that success out to other regions and other industries. That’s why we created the national position for him.”

For Byron, the move was a natural progression. He has a passion for engineered valves, especially the Check variety. Before joining Crane Supply six years ago, he worked at a specialized engineered valves company.

The skill set for selling engineered valves is different from other valves, he explains. “With commodity valves you deal with purchasing agents; with engineered valves you deal with engineers. The sales cycle is a lot longer (from six months to a couple of years). You have to get in at the early planning stages and make detailed presentations.

“With all that said, once you establish a good relationship with engineers, they tend to take you with them from project to project.”

The Noz-Chek valves are a premium line that uses innovative technology.

When talking to customers, Byron describes them as a “solutions valve”.

“There are customers who have problems with their existing Check valves that they are not even aware of. They are used to thinking in terms of older technology, not about what these new valves can do for them.

In the same way that it is not the force of a 747 jet engines that gets it off the ground, but rather the airfoil of its wings, so it is the airfoil of the valve’s disc that gives it such amazing performance in reducing backflow and providing low pressure drop.” ■

THE CRANE REPORT IS PUBLISHED FOR THE PEOPLE OF CRANE SUPPLY 615 DIXON ROAD, TORONTO, ONTARIO M9W 1H9 If you have comments, praise, complaints or suggestions, please contact Claire Tipple by e-mail: claire.tipple@cranesupply.com or telephone (416) 244-5351 Si vous préférez reçevoir Le Bulletin do Crane en français, priere de nous en aviser.

Tom and Dennis at the Strategic Deployment session

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