Metropac Industries

Inventory and service at the forefront

BY MARY JO MARTIN

Editorial director

In 1937 Bert Cosentino realized there was a growing demand for oil heating equipment parts and service that was not being met. So -- when the U.S. was beginning to feel the effects of the Great Depression -- Cosentino set up a small parts shop in a garage in Everett, Mass. He called the business Metro Supply Company. 

Cosentino’s mission was to acquire an inventory of hard-to-find aftermarket parts for heating systems by repairing equipment, components and the parts themselves, and by collecting used parts and pieces. Cosentino understood the variety of needs of his customers, so in addition to the supply operations, Metro Supply was doing some assembly and manufacturing.

Among the assortment of products manufactured by Metro Supply were its unique water/air furnaces, shell-head oil burners and Quiet-Flame water heaters. Eventually Metro Supply gained a reputation as “the largest Oil Burner Specialty House in New England.” The business grew, and the garage had to be expanded to better house the inventory and to service the many customers.

In the early 1950s, Cosentino gave Metro Supply a new and modern name: Metropac Industries. Metropac Industries later went on to purchase the Tux and Autopulse divisions from Walbro Corp. and continued producing those lines into the early 1980s. Metropac found itself stocking more and more items from other manufacturers until eventually they got out of manufacturing entirely in order to concentrate their efforts solely on wholesale distribution. 

Among the major turning points in the company’s more recent history are:

• 1986 -- Ronnie Cosentino took over as president.
• 1987 -- Julie Leaf (Cosentino) appointed treasurer/controller.
• 1990 -- Bryan Cosentino joins Metropac fulltime.
• 1997 -- Eclipse Distribution Software is implemented. This streamlined sales, purchasing, AP, AR and online ordering. It also dramatically improved efficiency.  Also at this time, Metropac became one of the first in the industry to offer secure online ordering through their website at www.metropac.com.
• • 2000 -- Relocated to Foxboro Mass., to a state-of-the-art 40,000-square-foot warehouse. Implemented hand-held scanners and bar coding technology in its warehouse.  Because of this technology, all in-stock orders, either phoned in, faxed in or through real-time web order entry, can be picked, packed and ready to ship within 15 minutes.  They are also able to maintain an error rate on mistakes of 99.8% and an inventory accuracy rate of 99.6%

Recently, Metropac Industries vice president Bryan Cosentino sat down for an interview with editorial director Mary Jo Martin.

MJM: Give us a snapshot of the company today?

Cosentino: We have 22 employees including seven inside sales/customer service associates, a full-time marketing and it department along with a top-notch purchasing department.

Our product segments have expanded to include residential and commercial controls, draft controls and venting equipment, hydronic and steam specialties, combustion testing equipment and indoor air quality products.  We have also increased our sales territory to include all of U.S., Canada, Mexico and abroad. 

MJM: Who are your primary customers?

Cosentino: Wholesale distributors both large and small, single locations as well as multi branch locations; OEMs and rep agencies. Metropac does not sell to contractors or end users.

MJM: How are your sales divided between residential and commercial?

Cosentino: We are currently split approximately 70% residential and 30% commercial.  We are working on building the commercial side of our business by bringing in new commercial lines and increasing our stock. We have increased our Honeywell, Johnson, and Invensys commercial inventory and have brought in new commercial lines including, Fireye, Asco, Belimo and Functional Devices (RIB Relays).

MJM: Do you have special training programs for employees to increase their technical knowledge?

Cosentino: We pride ourselves on our technical sales staff. Our customers have come to rely on us to answer their technical question, help with product selection and cross referencing. Continual training is done in house with our vendors to keep our sales staff current on new products and market information.

MJM: Describe your relationships with your suppliers? Are most long-term?

Cosentino: We have a great relationship with our vendors. Honeywell is among our oldest venders, dating back over 50 years. We’ve been aligned for 40 years with Beckett, Bacharach, McDonnell Miller and Taco, and for 30 years with White Rodgers, Watts and Maxitrol. 

MJM: How do you evaluate potential new suppliers and what is the process a master distributor goes through to carry a particular product line?

Cosentino: We research to see if there is demand for the product. Our distribution software keeps track of all requested parts, whether we stock them or not.  We also look at the manufacturers’ minimum purchasing requirements. If they have case quantity minimums or a minimum order amount, that would be a line we would consider. We make the investment to purchase in large volumes so our customers don’t have to. We don’t have any minimum requirements so wholesalers can purchase what they need when they need it. One piece or 10, we are able to offer the best possible price.

MJM: Do you have an outside sales force, or are all sales done through inside personnel?

Cosentino: All of our sales are done through inside sales and our web order entry system.

MJM: How do you market your business and target potential new customers?

Cosentino: Metropac markets through a variety of ways: magazine ads, our website and online advertising, e-mail, faxes, trade shows, cold calls, direct mail, word of mouth, and through our HARDI membership. 

MJM: For a master distributor such as yourself, how do customer relationships differ from those in traditional wholesaling -- or do they?

Cosentino: Service is everything. We provide a vital role in distribution for both wholesalers and manufacturers. Master distribution is an extension of the supply house. We work together to figure out solutions to problems or find the correct part for the customer’s application. Our customers know that we are not competing with them, we are there to help. We are an information source as well as a supply source for the wholesaler.

MJM: How have your customers’ expectations changed over the years, and how has Metropac adapted to those changing needs/wants?

Cosentino: Today’s customers want to use fewer vendors, faster delivery, tech support and low prices.  To address these expectations we moved into a new, larger building to increase our inventory, have implemented web order entry and discounted shipping. We provide cross-reference assistance, increased our product knowledge to provide better tech support, offer seasonal promotions, and we host training classes for customers to keep them up to date on new products and installation techniques.  Customers look more and more to us for the answers to their questions, because some manufacturers are not as easily accessible as they once were. We keep up on the training and have all the tools needed to assist the customer.

MJM: How important are the new electronic technologies such as EDI and order tracking, to your business? Do you engage in electronic ordering with your suppliers and/or customers?

Cosentino: Technology is very important to us, it enables us to provide better service to our customers and be more efficient in all areas of our business. We use it throughout our operations, including sales, purchasing, AR, AP and in the warehouse. Our infra-red hand-held scanners and bar coding system improve our shipping accuracy and inventory control.  Our online ordering system at www.metropac.com is very valuable as well. We offer a 3% discount on all web order entry orders. In addition, it provides order acknowledgements, current pricing and inventory status and order status and tracking.

MJM: Do you track activity on your website? Are you pleased with the amount of activity you are experiencing?

Cosentino: Yes we do track this activity and we are extremely pleased.  Currently, more than 30% of our sales are done through web order entry and that figure is growing everyday. Our site includes links to vendors’ sites, product information, cut sheets, ups tracking and price sheets. 

MJM: With so many sources of competition in the marketplace, how does Metropac differentiate itself?

Cosentino: Service. Service. Service. The customer is always #1. Plus we offer a deep varied inventory, competitive prices, web order entry with e-mail confirmations and extra discounts, shipping discounts, a knowledgeable sales staff, technical support and computerized cross referencing.  We offer convenient extended winter hours, seasonal promotions, confidential drop shipments, training classes and same-day shipping.

Customers have confidence in Metropac, because we provide whatever it takes to satisfy them. We are there to help and support our customers. If you can earn the customers’ respect, you will earn their business.

MJM: With a business such as yours, I would assume that product availability and shipping reliability are key. How do you ensure that you have the right type and numbers of product on hand at all times, while not getting to the point of having too much of your resources tied up in inventory that might not move?

Cosentino: Our Eclipse distribution software and our experienced purchasing manager Matt Trelegan ensure that we have the right inventory on hand. We order often, but are cognizant of the minimums so as to not pay freight. Freight companies that we have deep discounts with let us offer discounted shipping to our customers.  An example would be our ups next day air special.  It is available for $9.95 on packages of 10 pounds or less, anywhere in the continental U.S. with a $25 minimum.

MJM: Your warehouse must be a hub of activity. Please describe the various functions that your warehouse/shipping personnel perform to keep inventory stocked and moving smoothly.

Cosentino: Our warehouse ships product, receives product, does cycle counting to keep the inventory accurate, processes customer/vendor RGA and handles customer pick-ups. The warehouse manager has the responsibility to get all in-stock orders out the same day.  He tracks and monitors the speed in which each order is picked, packed and shipped. If picking or packing of an order takes too long, he knows to investigate the problem.

MJM: How have you seen the role of master distributors changing in recent years, and do you foresee any other changes/opportunities on the horizon?

Cosentino: Wholesalers traditionally looked to us for our deep inventory.  They have always relied on us for fast, same-day shipping on popular products as well as hard to find parts. Our role over the years has expanded to include technical support, cross referencing and training, because we are often easier to contact than the manufacturers. 

I have also seen a renewed recognition from manufacturers.  Because they realize how heavily we market, stock, train and support their product lines, they have developed special programs specifically for the master distributor.  They assist us in making returns easier, advertising co-ops, restocking programs and training assistance. 

MJM: What are your growth projections/plans for the near future?

Cosentino: Metropac plans to add some new key product lines to build our commercial product offerings. In June we will have a brand new website with improves features and detailed product information including cross referencing information. We will continue to focus on international sales, and increase our presence in Canada as well as in the U.S and abroad.

To learn more, call 800/852-heat or visit www.metropac.com.