Contractors can take an online training course offered by Johnstone or participate in training labs at several dozen locations across the country. It’s all part of the company’s plan to empower its partners, both internally and externally.
There’s a lot of significance packed into Johnstone Supply’s vision statement: “To be North America’s leading HVACR solutions team, empowering our partners to achieve the highest success.”
In the ongoing fight against commoditization, the Portland, Oregon-based co-op recognizes that its success is directly tied to the success of its partners — Johnstone’s 100 member companies as well as its contractor customers and supplier base. “It’s intentional when our vision says, ‘empowering our partners,’” explains President and CEO John Tisera. “How do we do that? It’s by providing solutions. That’s the mantra of the company. We’ve got to make it easier for everyone to succeed.”
Johnstone’s member companies range in size from a couple million dollars in annual revenue to more than $200 million, small market single-store operators to regional multi-location players. The Members own their own businesses as well as the nonprofit cooperative entity itself. Six distribution centers service more than 430 locations throughout the U.S. and Canada. The corporate office provides marketing, e-commerce, logistics, supply chain support, central billing of supplier purchases and information services such as product attributes and pricing data.
The company is controlled by a board of directors, with the majority being Johnstone owners and two being outside directors. “It’s a very, very unique business model,” says Kevin Dier, VP of training and business development. “It creates a lot of strength and power.”
For example, with the co-op model, Johnstone is able to draw from the local experiments run by its members and leverage the most successful initiatives across the enterprise, Tisera notes. One owner created an app called PartStock to help contractors seamlessly manage their on-truck inventory that is now available to all Johnstone locations. “Part of our plan is to speed up this type of best-practice adoption so if there’s something really great going on in one market, we intend to go faster than ever before scaling those capabilities into more markets,” Tisera says.
Success Drives Success
Dier has been in charge of training at Johnstone for about 12 years. As part of its branches across the country, the Members have built 65 training labs filled with technical equipment used to train contractors. Contractors can also participate in an online training course, Johnstone University. Additionally, there is a leadership training course for Johnstone’s corporate team and distribution centers that will soon be rolling out to its Member’s leaders.
Dier personally works with nine Johnstone companies as an implementer for the Entrepreneurial Operating System (EOS), a business operating model founded by entrepreneur Gino Wickman. Another 11 Johnstone companies also use EOS with third-party implementers. “All of our success comes from our Members’ success,” says Dier. “We do whatever we have to do to help them think a little bigger, put the resources in place to develop talent and execute on their vision. That’s how co-operatives thrive.”
As Director of e-commerce, Brian Klaus is heavily involved in company-wide engagement. He spends about 30% of his time traveling to Johnstone locations, helping Members make the best use of the company’s technology solutions, known as the Johnstone toolkit. In the beginning, he says, the focus was on setting up technology that would address the issues that keep customers up at night so that “they can turn around and say, ‘We have a solution for that,’” Klaus says of the Johnstone Member companies.
Now, it’s more about fine-tuning the self-serve aspects, helping contractors with elements they can handle online in order to give them more time in their business, Klaus says. One example is making it easy to repeat a previous order, knowing if a product is in stock and how much it costs. “We’re still very much a failure-driven business. When something breaks, a contractor gets called and … if that piece isn’t on his van, he needs to know where he can get it — really quickly,” he says. “Our solutions, whether it’s the app or the website, provide real-time availability and pricing at all of our 430-plus locations. Those types of things are very valuable for the contractor. Our focus has always been on trying to give that contractor more time back in their day and help keep them out in the field on the job.”
The next stage of advancement is mobile technology. Over the last year or so, Klaus has seen more contractors looking for mobile capabilities over desktop. “We are executing a redefined mobile strategy with the input from contractors,” he says.
Supply and Demand
Tisera refers to the Johnstone website as the company’s “digital branch,” open all the time with access to millions of products. Each product SKU on JohnstoneSupply.com has an average of 80 attributes assigned to it. Products are cross-referenced so that customers can easily find matching or complimentary parts. “I think we’ve built a pretty incredible machine when it comes to our digital branch,” Tisera says.
Johnstone is also able to connect directly with customers’ ERPs to exchange information, such as inventory availability. Additionally, the company has access to the warehouse inventory of more than 55 suppliers. “It’s important to us that a counterperson at a store counter can look up and see real-time inventory at his or her store, the stores in that member’s ownership, the inventory at all of our six distribution centers nationwide, and then at the locations of the supplier of that particular part that he or she is looking for,” explains Carlos Hernandez, VP of supply chain.
The Johnstone network currently has orders reaching 97% of stores the next day but Hernandez isn’t satisfied. He wants to improve that inventory availability even further. “Contractors can walk in or call minutes before the store closes, order a part, and know that it’ll be there by the time the store opens the next morning,” he says. “That’s been a game-changer, and it’s driving a lot of customer loyalty. We see that as a strategic advantage going forward.”
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