Menon Pipe thrives under second-generation leadership

BY MARY JO MARTIN
Editorial director

Menon Pipe president Michelle DeGrassi (back row, left) is ably assisted by loyal employees like (front row, from left) Sarge Torres, Sarah Girard, Fernie Ortega, (second row, from left) Terry Santala, Linda Leathers and (back row, right) Robert Griego.

When she was a teenager, Michelle Menon (now DeGrassi) was impressed by a television program she saw profiling fathers and daughters who ran businesses together. She decided that joining her father, Evans “Moose” Menon, at Menon Pipe & Supply would be the perfect career. Moose wasn’t so sure.

“Dad really pushed me to be a doctor,” Michelle explained. “He wanted me to follow a different path — my college major was biology with an emphasis on marine ecology — but something always led me back to Menon Pipe. Dad was old school. He didn’t think it was the right place for a woman to work. But I was as determined as he was stubborn and we eventually worked it out.”

Michelle joined the South El Monte, Calif.-based wholesaling company full-time in 1981 — although she had served as corporate secretary since her father’s partner died in 1974, when Michelle was just 16. She sensed early on that some changes needed to be made, both to operational processes and the company’s niche in the market. Michelle began observing how they were being managed, studying ways to improve the processes and then implemented her ideas.

“Dad felt that if things worked, you shouldn’t mess with them,” she said. “But I was coming in with a new perspective and saw that the business was not working the way it should. I felt that some changes needed to be made to ensure Menon Pipe’s long-term viability.”

In Michelle’s early years with the company, Menon Pipe did not have any computers, so everything was done by hand, which meant a lot of busy work and wasted time. She also noticed that while Moose was handling collections, his other responsibilities left him little time for that important duty.

“Basically, I did whatever was needed during those years,” Michelle explained. “I started taking over collections, which really helped to keep our customers more current, and I would also help out in the warehouse. I’d check in material, put it away and pull orders. I wanted to learn the whole business and I had to be hands on. At first the guys would help me with boxes or climbing ladders to get material on and off the racks. They were trying to be gentlemen. But they learned quickly that I just wanted to be treated like one of the gang.”

Changing their image

Another area that Michelle felt was extremely important to change was the particular niche that Menon Pipe was known for in the marketplace.

“We weren’t looked at as a primary supplier,” she explained. “We were known for having the odd items that no one else carried — but customers knew they would pay an arm and a leg for them. Unfortunately, that made Menon Pipe synonymous with very high prices. I worked at restructuring our classification of customers and their prices. I thought that we needed to take the company in a new direction, and become a full-line, full-service distributor of industrial PVF products.

“I knew what material we had to go tight on to get our customers’ business in pvf. Our core customers today understand they get a good, competitive price with unbeatable service. However, my outside salesmen still run into potential customers that have that old mindset that Menon’s prices are way too high. We sometimes have to convince the potential customer to let us quote to prove we are competitive.”

Moose had founded Menon Pipe & Supply in 1965 after spending his career in sales and purchasing with industrial piping businesses, including Lange Pipe & Supply, Halderman Pipe & Supply and mechanical contracting firm E.O. Nay Company. The company has grown its offerings to include pipe, tube, valves, nipples, fittings, weld fittings, gaskets and flanges in such materials as steel, stainless, PVC, CPVC, copper, brass and aluminum. It has also expanded its trading area from Southern California to include Nevada and Arizona. Menon Pipe serves a wide variety of customers, including:

• Contractors (mechanical, maintenance, HVAC, boiler service/repair)
• Boiler manufacturers
• Food processing plants
• Chemical processing plants
• Dairies
• Industrial gas manufacturers
• Carpet manufacturers
• Municipalities
• Film production companies
• Piping servicing companies
• Colleges and universities
• Medical product manufacturers
• Breweries
• Co-generation plants
• Cryogenics

Menon Pipe offers same-day, will-call availability on most of its products, along with on-site cutting, threading and grooving of brass, carbon steel and stainless pipe.

Proving her mettle

As Michelle got more involved in the business and took on greater leadership responsibilities, she experienced some discontent among a few employees who had a hard time accepting her ideas to improve operations.

“I started making people accountable for their jobs because we had some people who had worked for Dad for a long time who really didn’t pull their weight,” Michelle said. “A couple of employees kind of revolted and ended up leaving. Others really gave me a chance and believed in my abilities.”

Moose suffered a heart attack in 1990, and had to cut back on his workload. This pushed Michelle even further to the forefront.

“I had to take greater control over the decisions and processes,” she said. “Fortunately, Dad had some good friends who were willing to help me, and we talked about setting goals and how to accomplish them. With the help of some loyal employees, I started implementing these plans. I had to take it slow at first, and concentrate on one task at a time.”

In 1996, Moose’s wife, Gay, who had been vice president and treasurer, decided to retire. Michelle was going to be succeeding her mother, but first needed to have a serious talk about her concerns with Moose.

“I basically told my Dad that we had to have some type of computer system, or I was quitting,” she said. “Fortunately he agreed, and my sister — who was a programmer — designed a system to mimic our manual system. It only had A/P and A/R, but it was a great help.”

Around the same time, Michelle was joined at the business by her husband, Sal DeGrassi, who holds an economics degree and had experience in retail management and teaching. Michelle felt that Sal’s outgoing personality — and the fact that he was not afraid of rejection — made him a great fit for a sales position.

“I knew Sal could sell anything,,” she described. “Dad thought that he needed at least five years’ experience in the warehouse to learn enough before getting into sales, but after one year an opportunity arose to get Sal into outside sales. He did great!”

Several years later, Sal also took over the inside sales role, while still maintaining the customers he had as an outside salesman. Now the company’s vice president, Sal is in charge of the inside order desk and warehouse personnel, along with vendor relationships and negotiations.

Smarter purchasing practices

As she dove deeper into Menon Pipe’s organizational processes, Michelle felt it was crucial to change the company’s purchasing practices. Menon Pipe had a large amount of excess inventory, much of which had been sitting for years collecting dust. A lot of inventory was not moving and the company’s sales were declining. Michelle first tackled the most obsolete items by either selling them at very low prices or scrapping them when there was no other way. This gave Menon Pipe room for reorganizing the warehouse and allowed the company to bring on new lines like Bradford Sanitary Fittings, A Dixon Company, which has proven to be a great benefit.

Inventory control was a primary reason that Michelle decided to purchase the Eclipse software system in 2003. Since then, Menon Pipe has made great progress in purchasing and warehouse management.

“We needed to get our inventory to a more manageable level, while still providing good service and availability to our customers,” Michelle explained. “Eclipse allowed us to do that efficiently. It has really helped in our purchasing department. Before, it was a gut guess as to how much to buy — and it always seemed the gut thought more was better. Now I can see sales history of an item and determine if it should be a stocking item for us or not. We don’t overbuy like we used to.

“It has also helped us with pricing consistency. When we have price increases from our manufacturers, we can look up who is buying that material and send them the notice. The Eclipse system helps me in collecting data quickly to use in making decisions to fine-tune our processes. We now use Eclipse in every aspect of our business. It really has changed the way we operate. Our overall purchasing has dropped around 30%, but our sales are up about 20%.”

Managing change

In addition to getting input from her staff — “They often have great ideas and like to be heard,” she noted — the company has engaged the consulting services of Mitch Harper. An entrepreneur who retired at 37, Harper is now a senior lecturer at Texas A&M University’s Industrial Distribution Department and speaks at various distribution industry meetings. Michelle believes he can help the Menon Pipe staff improve their sales and service levels.

“Mitch has been working with our sales staff on spiffs and other techniques,” she said. “He’s also helping me better understand the sales mentality and how to motivate the sales team. Mitch has helped us look at our different customer categories and the potential of each group both in sales volume and gross profit. The suggestions he gave us were invaluable.”

She is also grateful for the support she received from industry trading partners and other wholesalers. “A lot of people have helped me get to where I am, and I believe that support like that will help this entire industry become stronger,” she said.

Michelle has been diligently working on the nuances of managing the different age groups of Menon Pipe employees. Research has shown that these groups are motivated in very different ways. Menon’s workforce is comprised of about 50% Baby Boomers, 17% Generation X and 33% Generation Y.

“I’m a Boomer, so I can readily identify what motivates that group and how to manage them,” she said. “My sons are Ys, so I have a pretty good understanding of that group, too. I’ve really had to do my homework to learn about managing the Xers. It’s like a huge puzzle; I’ve got to put all the pieces together. It’s a constant challenge to keep productivity up among these various groups, so I’m always looking for new ways to challenge them. It can get frustrating sometimes, but it’s also been very rewarding. I am very fortunate that many of my employees are either family or considered family — and they are all very loyal to me.”

In fact, Michelle and Sal’s two older sons, Chris and Nick, have begun to make their mark in the company, as has one of their sons’ best friends.

“Chris started in the warehouse in 2003 and he soon became the warehouse manager because he had such great ideas,” Michelle explained. “He changed all of the logistics and made our warehouse so much more functional and efficient. It has been a huge improvement to our business. Nick came in 2004 and originally was helping out Chris with the warehouse redesign, but because he has such a strong knowledge of computers, he has taken over as it manager and is also in charge of receiving. After finishing the warehouse project, Chris moved into inside sales and working with our VMI programs. They have learned so much in such a short time — and they get along great with the customers!

“Their close friend, Adrian Martin, who has been like another son to us for many years, has succeeded Chris as warehouse manager. Adrian has such an even, sincere personality, so he was a perfect fit for that position. They all have really taken ownership of their jobs and realize it’s their future they’re working for.”

Michelle and her team continue to build on Moose’s original vision while making Menon Pipe a stronger player in the Southwest market. They believe strongly in a commitment to their customers and employees, as evidenced by the goals outlined on the Menon Pipe website:

• Maintain a position of honesty and integrity
• Nurture a team of talented, dedicated employees committed to serving our customers needs
• Listen to our customers so as to enhance the ways of doing business to meet their changing needs
• Manage inventory levels to meet customers’ immediate needs.

By late 2001, Moose Menon became too ill to fully participate in the company. According to Michelle, Moose had always resisted the idea of retirement, so he continued to come into the office everyday for a short time to open mail and talk with employees, customers and vendors. He held the title of president until he passed away on April 25, 2004. Despite their differing management philosophies, Michelle believes her Dad was proud of the changes that she made at Menon Pipe — and of the resulting growth.

“Not once did my Dad ever say ‘no you can’t do that’ when I had an idea,” she said. “However, some of the changes he was not so sure of. I believe that for him, it was hard to see changes in the way he had set things up. But he knew that I had the company’s best interests at heart and that I took seriously the responsibility of increasing sales and profits and decreasing overhead expenses. He was a man of very little complements, but he was proud of my accomplishments. Above all else, Dad had faith and trust in my abilities.”

After 25 years with Menon Pipe, Michelle DeGrassi feels as though the company is on the right track, and takes some well-deserved satisfaction at her role in its turnaround. One of her early dreams when she joined Menon was to follow in her Dad’s footsteps in earning the Wholesaler of the Year award from the Pacific Southwest Distributors Association. Moose had garnered the prestigious award in 1975, and in a testament to her hard work and determination, Michelle was presented with the award for 2005 — the first father-daughter combination to be recognized with this honor.

Despite her successes, Michelle still believes that she has not completely hit her stride. “Right now, I’m about a 6 or 7 on a scale of 10,” she said. “I’ve been able to improve many things at Menon Pipe, but we still have a ways to go. But I’ll probably always feel that way, because I’ll always have room to improve. Even if you’re on the right track, if you don’t keep growing, you’ll get run over.”