Building on reborn company with clear focus
BY JOHN MESENBRINK
Editor, Phc News
Twelve questions with Scott Delany, vice president of Coyne & Delany Company.
1. Please provide a brief history of the company.
Coyne & Delany Company was born in Brooklyn, N.Y. It was in 1879 that John J. Delany decided to risk the job security of being a horse-drawn streetcar driver to — along with his partner, Thomas Coyne — found a manufacturing company of plumbing products. In those days, the business manufactured copper-lined wooden bathtubs and wooden overhead tanks for water closets. By the early 1900s, a wide variety of plumbing products were being produced, among which were cast iron bathtubs, brass plumber’s trim, wooden flush tanks and fittings and ballcocks.
By the 1900s, the product line had expanded to the point where Tom Coyne and John Delany were starting to see the fruits of their labor with their salaries rising to $25 per week. Then in 1910 Tom Coyne suddenly died. The Coyne family, with no male heirs, sold their interest in the business shortly afterward to John Delany. It was in 1928 that the company designed its diaphragm-operated first flush valve, the Flushboy, considered to be the simplest (and thus most reliable) design for direct pressure flushing.
The company suffered like the nation through the Great Depression. Over this time and leading up to World War II, many design improvements and Delany patents refined our basic diaphragm flush valve to where it required only six moving parts. Slowly, the copper-lined bathtubs and other product lines were replaced by the flush valve line. At this time, Coyne and Delany was a leading manufacturer in the Mid-Atlantic and Northeastern states. World War II brought such huge demand for flush valves that by the end of the war the company was no longer just a regional supplier, but a national manufacturer specializing in diaphragm flush valves.
In 1969, Coyne & Delany moved from its home on Kent Avenue in Brooklyn to Charlottesville, Va., where they purchased 7 acres of land and built an expanded state-of-the-art manufacturing plant. At this time, the transition to the company’s fourth generation of family ownership and leadership was underway. In 1979, the company celebrated its 100th year in operation. A huge accomplishment shared by only a few other American companies.
In the 1990s, as globalization began changing the world economy, competitors began importing cheaper produced products from overseas. These firms changed the commercial plumbing landscape forever, often by grabbing market share via discount price strategies, and not based upon quality. These imported products posed a significant threat to smaller family owned U.S.-based manufacturers like Delany.
As these changes were occurring, the old Coyne & Delany struggled to adapt. The run-up in copper prices in the mid-2000s provided the final tipping point. As other firms absorbed the commodity price increases, the small family-run Delany saw slim margins erode into loses. The culmination of this was probably the darkest day in company history when it was forced to close its foundry in November 2007 and lay off two-thirds of its workforce.
As the company limped along in 2008, a rebuilding plan was underway. The company’s rebirth began in 2009 following a restructuring in the early part of that year, which resulted in the company cutting to the bone. Another 40% of staff was laid off and management took pay cuts. During this time the company transitioned itself to a lean efficient model that was focused on R&D, marketing and distribution, while 100% of assembly and 100% of product testing were performed in Charlottesville, Va. The company also took on its first ever financial officer.
In the fourth quarter of 2009, the company unveiled its new name and logo, Delany Products, providing a clean, simplified image of “Changing for the Better.” By that time, the implementation of a new state-of-the-art CRM system was already under way, and the company began to add back employees. The company also set up both an Advisory Board to instill proper corporate governance as well as its first-ever Representative Advisory Board in order to get better feedback from the market. For 2010, the focus for the company was timely deliveries in order to rebuild the faith in the company. After successive years of losses, the company turned a profit in 2010 and with new products coming in 2011, the future is brighter than ever.
2. How did you get involved in the industry?
Honestly, I have never been in the industry. I have never worked for the company and in fact I have been living in Asia, working in Japan since 1997. My career took a very different path from my brothers. But it has been from this vast wealth of experiences that I am now drawing on to help the team today. I started on the floor of American Stock Exchange before becoming an original member of a global brokerage firm called TIR in 1987.
Having built TIR from scratch, we sold ourselves for $125 million to E*Trade. Along the way, I moved to TIR/E*Trade’s Tokyo office to run the trading desk there. From there, I left to establish a Real Estate investment fund, investing and running small to medium sized hotels throughout Japan. Our focus was creating a high-end product at an affordable price while establishing our new brand.
During this time, I was not aware of the magnitude of the company’s downturn. I first became aware of the problems in 2008 and began consulting from Japan at night. By the end of that year, I saw the opportunity to return and help turn this sleeping giant around.
3. Explain your involvement in the company.
I am working every day to implement and live our motto of “Changing for the Better.” I principally have taken full responsibility for the company’s finances, making sure that we have the capital necessary to expand and that we are focused on profitability first. I am also involved in the both our short-term and long-term strategic planning, planning for the next markets, next products and systems, and the next market trends.
4. What are your initiatives for the company? (What are your business philosophies instilled in the company?)
I believe that a company is like a shark. If you are not aware, a shark cannot breathe on its own. It needs to always be moving forward in order to have the water move through its gills. A company is the same — if it is not moving forward, then it’s dying. I also feel strongly in the importance of being #1. People don’t have a lot of time and don’t want to take risk. Thus, they naturally favor the #1 player in any given market. We are looking up at our competitors at the moment, but striving to be #1 will always be our primary goal.
Our initiatives this year remain centered around building a solid foundation for delivering the highest-quality products on time at a fair price, and for introducing new innovative products. We will soon be implementing a new inventory system across all of our products, allowing us to more easily integrate with our customers as well as with our supply chain. By the end of the year, we are looking to add at least one new product to our line-up. From a systems standpoint, I immediately saw the need for the firm to upgrade its systems to something that was PC based, cost effective, and flexible to our needs as well as our customers, thus helping improve both the accounting as well as customer service.
5. Can you explain the process and importance of getting product to customers in a timely fashion?
For every manufacturer, timely delivery is important. For the new Delany Products it is crucial. From 2007 through most of 2009, the old Coyne & Delany let down its customers with delivery times that were, well, unacceptable to say the least. Since our return, it has been our focus and I am proud of what my brother Peter, our head of manufacturing, has achieved in this respect. We are not quite where we want to be but have come a long way and are moving in the right direction. As we told all of our agency representatives at our first-ever National Sales Meeting at this past year’s ASPE convention, as of Sept. 30, 2010, the average delivery time across all items was 9.8 days.
6. How can engineers/builders benefit from spec’ing your product — through quality, innovation, on-time shipping, customer service and satisfaction?
Engineers and builders can feel confident in specifying any Delany Products item due to our focus on simplicity and dependability. Our 130-plus years in existence and 80 years of focus on the flush valve speak loud and clear to these points. The quality of our product is among the highest in the industry from the DZR alloy we use to the precision machining of every flush valve. A drop of water in their valve is our customer’s assurance that each and every valve has been water tested before it leaves our Charlottesville, Va. facility.
Our on-going upgrade of systems for inventory, customer relations management, and accounting are all focused on providing the best customer experience possible while still maintaining the friendly warmth of a family-run business.
7. Are Delany products certified through a third-part certification process? Explain the process.
The new Delany Products has built a relationship with Canada’s CSA International. CSA International is a leading provider of product testing and certification services. Products are tested for compliance to international and United States standards, and issued certification marks for qualified products. The CSA mark is a sign of confidence for millions of people globally. Currently, two of Delany’s mainstay products have been given certification.
As for the process, I will answer this from the perspective of a new product. For us, all of our new products go through a rugged internal approval process. This starts in the lab where we torture test a new product with at least 150,000 flushes and detailed documentation along the way. After making a production proto-type, we then will field test a product in several locations for weeks at a time. Once this is done and we are satisfied, at this point we send that product to the CSA for their approval, which should be a formality at that point.
8. What are the top three obstacles your company faces(d)? How do(did) you overcome those challenges?
The three largest hurdles that we have faced as a company were our outdated systems, poor corporate communication and broken trust. From a system standpoint, we have gone through a painful transition beginning in 2009 and through most of 2010 to our new state-of-the-art PC based CRM system. For 2011, we are already in the process of upgrading to the next level of the software as well as adding a new inventory feature to it. In terms of our corporate communication, we are streamlining our corporate message under the single name of Delany Products.
Prior to 2009, the company was using several names at the same time: Coyne & Delany, Delany Flush Valves, Delany and Delany Products. It was even maintaining two completely separate websites, www.coynedelany.com and www.delanyproducts.com. Today it is just the one name, Delany Products, streamlined, simple and delivering one message. But our greatest hurdle to overcome was rebuilding the trust of our customers.
Being unable able to deliver complete valves for nearly two years took a toll on our valued customers’ belief in us. Thus the reason for our concentration on timely deliveries and my subsequent pride in the results that Peter has been able to obtain in getting our average times down to under 10 days. This has gone a long way toward rebuilding our customer’s trust. We know that we are nowhere near where we want or need to be.
There are several items that still have unacceptable delivery times, but one by one we will tackle all of these issues. This brings us back full circle to our new systems, which will be a key tool towards our achieving additional improvements.
9. How does (did) the economy affect your business?
With the fall off in new construction, our sector of the economy has been hit particularly hard. In some ways though, this has been fortuitous for us as we have been able to use these slower times to restructure and reorganize, preparing ourselves for when demand returns. Our return to profitability during such a difficult time is also a testament to our loyal customers and changes that we have been able to make to date.
10. Do you deal entirely with wholesalers? Describe the importance of the wholesaler/ manufacturer relationship.
Yes, we deal almost entirely with wholesalers. The wholesaler/manufacturer relationship is an important one, as the wholesaler is a key piece of the puzzle for us, the manufacturers, to get our products through the supply chain to the end user. It is for the wholesaler that timely deliveries are of the utmost importance. If we cannot provide dependable support for the wholesaler, they cannot build confidence with their customers that they can get our product on time.
11. Any new products (updates), service offerings, incentives, etc.?
We are still strengthening our core, working on continuing to reduce production costs and delivery times. Still, it is our aim to introduce several new products in the later half of this year. One such product will be the Titan. The Titan will be a major departure for the company in both its look and feel. It will have the features that Delany is known for and yet changes that will excite the engineer. It will have quality and other elements that will simplify the life for the wholesaler, and it will be easy for the contractor to work with and install. In addition to the Titan, the Impluse — the market’s first ever hands-free battery operated flush valve — will evolve into an improved and more user friendly version, called the Pulsar.
12. Describe Delany’s presence globally?
Delany has been traditionally strong in Canada, South America and the Caribbean. We are looking to strengthen relationships in Asia with new product offerings and begin expanding into select markets there.