Boston Rack

Source: Manufacturing Digital

Date :16/09/2007 10:56:56

Finding innovative ways for its customers to make use of every square inch of storage or warehouse space has helped Boston Rack grow into a national company.

Written by James Buchanan & Produced by Michael Magno

Efficient use of space is a critical component to any company with any warehousing responsibilities. Products need to be efficiently stored in a manner relative to their size dimensions, use before dating, and so on in order for these companies to reduce costs, operate efficiently and maximize profits.

Therefore, finding a contractor with the specialized skills to help put every inch of space to work would seem to be one of the best decisions a company could make.

Boston Rack is one of these companies, and since 1999, the company has grown to provide its unique and innovative services nationwide.

According to Peter Murphy, founder, president and CEO of the company, Boston Rack has four offices across the U.S. that are all involved to some degree in the company’s business segments — providing storage for archives and records, food and beverage, retail and warehouse, and government sales.

The Irvine, Calif., office, managed by Jeff Andrews, president of the Archive division, primarily handles designing and delivering archive materials storage products, but also does some work within the commercial segment of the company’s business profile (70 percent archive and 30 percent commercial). Murphy adds that he expects their office to expand over the next two years as part of the company’s strategy to grow its national presence.

The Atlanta office, managed by Randy Daviadoff, VP of sales and marketing, is solely dedicated to the company’s commercial endeavors (warehouse, retail, food and beverage and etc.).

The Massachusetts office, located in North Easton, is the company’s headquarters and provides sales service for the commercial and government sales segments.

The fourth office is located in Pittston, Pa., and is managed by Ed Shedlock, general manager. It is essentially a mirror to the California office, in that two-thirds of its work is dedicated to archive and records storage and one-third to commercial. Its archive work is restricted to east of the Rockies, while the Irvine office handles anything west of the Rockies.

Asked what makes his company unique, Murphy immediately points to the expertise of his management team, which has enabled the company to succeed in a variety of market segments.

“What makes us unique is the fact that we are experts in a variety of vertical markets,” he says. “Archives, for example, we are probably number one in the U.S. when it comes to our archive ability because there is probably nobody else in the country with our level of expertise with this one segment. All of our people have a minimum of seven to ten years of experience. We have hired the best and talented project managers. CAD/estimators, and sales people to service this industry.”

Murphy adds that the same could be said of Boston Rack’s food and beverage business segment, where its employees’ years of experience working for a number of food and beverage companies gives them a leg up on competitors. This includes a keen awareness of each industry’s particular nomenclature.

For example, says John Chauncey, director of the food and beverage division for Boston Rack, in the beverage industry a “bib” is the plastic bag that holds the soda in a dispensing machine (Bag in a Box or bib), so when a client is talking about the number of bibs they need, Chauncey and his employees know what they are talking about and also understand the unique storage and stacking needs these items might have.

“It’s important to know the language,” says Chauncey. “The customer feels more comfortable if you know what they are talking about and know what is going on in their particular industry.”

Murphy adds, “Most other companies don’t have that level of expertise, but we do and we know their lingo and speak their language, which helps develop trust. And I could say the same of our other segments such as retail and government contracts.”

Talking in general terms with regard to the company’s level of expertise in its market segments, Chauncey says, “What we are trying to do is develop and become specialists in each segment of the company; learn every piece of the business and do the best that we can.”

Attracting and retaining employees and managers with such a high degree of experience requires making a big financial commitment. Murphy says that Boston Rack employees tend to make far more than the national average with generous incentive programs for all employees.

For example, all of the company’s sales and engineering employees are on an incentive plan, and staff that are not on a per-sales incentive plan receive yearly bonuses based on their contribution to the success of the company. The company also provides a full range of benefits and encourages training and continuing education.

To add a little extra sugar to what Murphy says is already a sweet deal, the company holds its yearly meetings on a cruse ship, resort hotel or some other desirable location. Half of the time is spent attending to business, while the other half is spent at play.

The company also sets itself apart by its ability to custom design racking solutions for its customers.

In this regard, says Murphy, Boston Rack places a significant focus on engineering the racking systems it uses, and has a large number of employees that are CAD engineers. When looking at a client’s storage facility, the company utilizes its expertise and design technology to maximize every square inch of space, he says.

Boston Rack also strives to be innovative in order to design racking systems that help its customers become more efficient. For example, the company has developed one racking system that is able to carry a number of differently sized pallets while minimizing any unused space, another that uniquely allows customers to pick and store pallets, and one system that more efficiently stores partial pallets.

“We know the best way to get the best use out of any space,” says Chauncey.

The company does not manufacture the racking systems it uses, which enables it a great degree of flexibility with its customers. This also means that Boston Rack believes in developing strong partnerships with the companies that supply its racking products in order to better serve its customers. Partners include Unarco, MBG Grating, Wildeck, Cornerstone, Eagle, Interlake, and other industry leaders.

In fact, he adds, UNARCO has assigned a district manager to help service all of Boston Rack’s needs.

This level of value added service is not unusual, says Alex Huitron, national sales engineer for Boston Rack, given the company’s size in the industry and buying power. Manufacturers often offer the company quite a bit of flexibility, enhanced services, and volume discounts.

The company’s design efforts are also enhanced by its close relationships with racking manufacturers because the company can rely on them for quality and meeting the design requirements, he notes.

“All of our systems are engineered to a particular project,” says Huitron. “We look at the seismic zone, the region, weights of the products and make engineering decisions based on those and a number of other factors and send those specs to the manufacturer.”

Partnerships with the contractors that actually install the racking systems are also critical to the company’s ability to succeed, says Murphy. While price is an important factor as to which contractor will get the job, quality of work and ability to do the instillations in a timely manner are critically important.

“I see them as ambassadors for our company because when they go on a project they represent us, they represent Boston Rack,” says Murphy. “They must be properly dressed, have a good safety record, and represent Boston Rack in a professional manner.”

No jobsite is ever left without a representative of the company, he adds, as a Boston Rack project manager is always on hand to make sure the job runs smoothly.

“We also design a time schedule on Microsoft Project that installers have to adhere to, and our project managers are there to make sure the schedule is met and the customer’s needs are met,” says Murphy.

Boston Rack is a total system integrator. From the time a customer first calls, to when the project is completed, Boston Rack handles every detail.

“We do the design; we ship the product; we make sure all of the necessary permitting is taken care of; we provide project management while it is being installed and require the customer to sign off at the end of the project to ensure they are satisfied,” says Murphy.

“We are fully responsible and our task is to take the pressure away from our customers.”

This attention to customer service and building strong vendor relationships has served the company well.

As a privately held company, investment capitol is derived from the company’s profits and it currently has no debts, says Murphy. Further, the company went from $6.7 million in sales in 2003 to $36 million in 2006 and has made the Boston Business Journal’s list of fastest growing companies in 2005 and 2006. Murphy has also been nominated for the Ernst Young Award for Entrepreneur of the Year

“We are a well run company with a strong management team that is profitable and investing back into its success,” he says.

Looking to the future, Murphy says he wants to double the size of the company in the next three years. This includes expanding out the existing offices and bringing in new employees that he says would primarily be “A” type players with a proven book of business. In other words, sales people with a proven track record of being able to sell $2 to $5 million worth of business per year.

“We welcome the opportunity to meet ‘A’ players and are always interested in taking phone calls to talk with these people,” says Murphy.

Boston Rack is also looking at opening one or two new offices. He says Chicago is a definite possibility for a Midwest office, as well as one possibly in either Dallas or Houston.

Looking a little further down the road, Murphy sees the company having a strong presence in South America and opening an office in Europe.

Taking a narrower focus, Chauncey says he is working to expand the company’s portfolio of services.

In this regard, the company is already partnering with a company to provide warehouse management systems to help customers better manage products from entry into the facility to when they are shipped. This will help ensure products are shipped before any code date expires and to set up more accurate and efficient picking lines.

“One of the unique things in the beverage industry is that there are fewer distributors in the business, but the ones that remain are much larger,” says Chauncey. “This means that the SKUs they are dealing with are growing dramatically. Ten to 15 years ago there may have only been 150 SKUs, but now we are looking at more than 400, and many of these distributors are using older systems.”

Therefore, he says these companies have to update to be more efficient in how they store and pick items and they must move quite a bit faster to get products out the door.

Further, by including warehouse management systems in its line up, Boston Rack is taking one more step toward becoming the racking and storage systems provider of choice, concludes Chauncey.