AWESCO

Continuous reinvestment in employees and technology leads to escalating success.

AWESCO defines its mission, in part, as “having fun creating and maintaining a culture of excellence while preparing for the future.” Over nearly seven decades, the Albany, New York, company has built a loyal customer base and a team of dedicated, enthusiastic employees. Under the leadership of President J. David Mahoney, AWESCO has pursued new marketing directions and embraced technological initiatives that have positioned this 66-year-old company for even greater success in the 21st century.

COMPANY SNAPSHOT AWESCO President: J. David Mahoney Year Founded: 1940 Year Joined GAWDA: 1947 Headquarters: Albany, New York Branch: Kingston, New York Employees: 38 2005 Sales: $8,000,000 Web Site: www.awesco.com

Becoming AWESCO
AWESCO got its start in 1940 as Albany Welding Supply Company. Founder Robert Mahony (no relation) guided the company through its initial years and led it to a position of prominence in the Albany, New York, market. Mahony eventually turned over the reins to his son Dennis before he passed away in 1971, and Dennis Mahony took steps to revitalize the company's sales force. Among the new sales reps he hired in 1976 was then-21-year-old J. David Mahoney.

Within two years of coming on board, Dave Mahoney was promoted to sales manager. By 1980 he was vice president/general manager, and in 1985 he was named president and became a partner in the business. The following year, Mahoney negotiated to purchase Albany Welding Supply Company from Dennis Mahony, and, signaling his intention to take the company in new directions, shortened its name to AWESCO.

Since Mahoney took over the company in 1986, AWESCO has quadrupled in size and now operates primarily in 17 counties in eastern New York State. In 1996, AWESCO acquired Walter Smith Welding Supply in Kingston, New York, which it began operating as a branch store, and in 1998 the company purchased a small Praxair branch and merged it into AWESCO's Albany operations. The company renovated its headquarters facility last year, increasing its size to 15,000 sq. ft., and added creative touches, such as a handicap ramp railing constructed out of cylinders that light up at night.

“I don't have to be the biggest company in town,” says Mahoney. “Big is not always best. Our team uses GAWDA's PROFIT Report to take a look at the benchmarks for profitability, gross margin, sales per employee, etc., to make sure we're a strong operating company. A lot of people might not consider us a very big distributor. But we're a very good distributor.”

Rewarding Atmosphere
Mahoney considers AWESCO's 38 employees to be the company's greatest assets, so he and his management team work hard to make sure that AWESCO is a company people want to come work for and, more important, want to stay with. Part of that is focusing on cultivating an atmosphere that is relaxed and rewarding. “I hope that my management style makes me part of the glue,” says Mahoney. “My door is always open. There's no employee who works here who cannot walk into my office and sit down and talk to me about a problem at any given time. I go out of my way to show an interest in everyone who works here.”

AWESCO's renovated facility includes creative touches on the outside, such as a railing constructed from cylinders that light up at night and new landscaping.

Reinvestment in the company and its employees is a guiding philosophy at AWESCO. “Some distributors are lean and mean, operating as close to the bone as possible to get their sales per employee as high as they can,” Mahoney says. “That doesn't work when you're trying to take on new projects and improve your operation, because if you're running too lean, there aren't enough hours in the day to focus on anything other than the workload you already have in front of you. I think that's where some people lose sight of investing in their company and their people. You have to spend money to make money, and trust that the return is going to come.”

Mahoney points to the fact that AWESCO continues to pay 100 percent of employees' health insurance and a significant portion of family coverage. “It's hard to do, especially in a marketplace where margins are shrinking and customers are demanding more and more,” he says. “But health insurance is a huge issue today, and if you want to keep good people, you've got to bite the bullet. Our employees appreciate that.” The company also offers a 401(k) plan and is currently the longest active participant in the GAWDA Group Life Insurance Program.

The importance of continuous employee training is a company mantra. AWESCO provides employees with both on-site and off-site training, often relying on vendors, GAWDA consultants and other specialists. Employee training and benefits are carefully documented. “We want to let our people see that we are investing in them,” says Mahoney. “We give our employees a report card at the end of each year that shows the number of dollars we invested in them in that given year, including their salary, benefits and training.”

AWESCO President J. David Mahoney

Two years ago, looking for a new way to find strong candidates for employment, AWESCO implemented an employee referral program. When AWESCO hires someone who has been recommended by an employee, that employee receives $1,000 up front, an additional $500 if the person stays for 90 days, and a final $500 if the recommended person remains with AWESCO for a full year.

Employees are recognized for extraordinary job performance. For example, when a customer contacts AWESCO to compliment a driver, the company sends a letter to the driver's spouse, including a gift certificate to go out to dinner. “Our drivers are on the front lines,” says Mahoney, “and we want them to understand that if customers are raving about the service that they provide, it makes it that much harder for our competition to cut prices and take away our business.”

Expanding Markets
AWESCO built its success servicing the industrial market in eastern New York, including manufacturing, construction and steel fabrication operations. However, with manufacturing slowly evaporating from the region, Mahoney sees the company's core markets shifting. “The growth opportunities are in the specialty gas and medical side of the business.”

The company has been involved in the medical and specialty gas business for several decades, but for a long time these markets were only a fraction of AWESCO's overall sales. Today medical and specialty gases comprise about 40 percent of the company's business, and Mahoney expects that a few years down the road, the ratio of industrial to medical/specialty gas may be inverted. A sales representative dedicated to servicing the specialty gas market was recently hired, and plans are underway to actively grow this market.

“Over the last several years, upstate New York has been trying to lure a high-tech chip manufacturer to set up shop in the area,” explains Mahoney. “This region is poised to explode from a technology standpoint, and if a chip fabricator comes here, the dollars of product sold could be huge. So we're working with all of the players who are trying to make that happen and letting them know that we're here to support it.”

Technology Initiatives
It makes sense that AWESCO would find success with a major regional technology initiative, considering technology has had a major impact on the company's bottom line over the last decade. AWESCO began bar coding cylinders in 1997, and currently is the only distributor in its market to bar code every cylinder. It was an expensive proposition for the company, but ultimately more than worth it in terms of the additional value it offers customers.

Today medical and specialty gases comprise about 40 percent of AWESCO's business, and that percentage is expected to grow.

“We tell our customers that their loss of use issues will be minimized because we have a very strong system to track cylinders,” says Mahoney. “It's easy for a driver to make a mistake and transpose numbers, but bar coding takes all the guesswork out of it.” The company also is getting ready to invest in a new distribution software package that will allow it to track cylinders “from cradle to grave”—that is, throughout every step of the process, from filling to inventory to shipment to return.

Another initiative AWESCO has embraced is CRM technology. All AWESCO customer service representatives are armed with laptops that give them immediate access to customer activity and accounts receivable information. The company currently is looking at wireless capabilities, and Mahoney predicts that the next step will be going paperless. “It's just a matter of when we pull the trigger,” he says.

The company prides itself on being able to think outside the box and accommodate special requests from customers to make their jobs easier. “Some of our customers require their invoices electronically, which we are able to provide for them,” says Mahoney. “In the past, one of our larger customers wanted their cylinders tracked by room number at their university, and we could do that for them daily.”

Customers have responded favorably to AWESCO's technology initiatives, and Mahoney sees the impact on the company's bottom line. “The technology makes us much, much more efficient,” he says. “It keeps us from having to fix mistakes and prevents things from falling through the cracks so we're not spending money needlessly.”

Based in Albany, AWESCO serves 17 counties in eastern New York State.

A major initiative AWESCO completed this summer was the redesign of its Web site. “We were guilty of the same thing a lot of people are guilty of,” says Mahoney. “We designed a Web site and put it on the Internet, and then forgot it was there, so it became old and stale.” In 2005, the company hired a local firm to construct a complete redesign, and after more than a year and an investment of over $20,000, the result is something Mahoney hopes will give customers a whole new appreciation for the service they receive from AWESCO.

The redesigned Web site incorporates a brand-new look and a much more comprehensive library of product information, including PDF files and links to manufacturers' Web sites for further reference. New to the site is a “Live Help” section available during operational hours, where customers are able to send questions directly to AWESCO's customer service department and receive an immediate response, as well as an MSDS request portal, where site visitors can request an MSDS on a particular product. The newest addition is an e-commerce package that allows customers to place orders directly through the site—a service that has been of particular interest to AWESCO's growing body of medical and specialty gas customers.

“The Web site is a way to promote our company, and we view it like an additional sales rep,” says Mahoney. “Our previous Web site focused on topics like the history of the company. But customers don't want to know what you did for them 40 years ago. They want to know what you're going to do for them tomorrow.”

Giving Back
Many GAWDA members associate Dave Mahoney with “giving back” because it was he and his wife Donna who established GAWDA Gives Back when Mahoney served as president of the association in 2000. That passion for giving back to the community extends to Mahoney's business as well.

AWESCO built its success servicing the industrial market in eastern New York, including manufacturing, construction and steel fabrication operations, although its core markets are shifting.

AWESCO is actively involved in efforts to improve the quality of life in north Albany. The company recently invested in new landscaping to do its part to “spruce up” the neighborhood, and this past summer, AWESCO sponsored a dozen underprivileged children from a local charter school to attend the summer program at the YMCA.

“We actively encourage our employees to get involved in community organizations,” says Mahoney, and he points to Nicole Armsby, AWESCO's controller, who recently was named president of the North Albany Neighborhood Association, as one of many employees actively involved in local causes. “We believe that by staying involved, we benefit both the company and the community.”

Continued Growth
As AWESCO approaches the 70-year mark, Mahoney looks forward to continued growth. Based on the success of the company's first two acquisitions in the late 1990s, he would consider going that route again, especially if the right opportunities present themselves.

Mahoney anticipates that AWESCO will continue to diversify its business. Among the initiatives the company is working on right now is a 5,000-square-foot cylinder maintenance facility located one block from AWESCO's Albany headquarters. “We've just taken delivery of a cylinder shot blaster, we're installing a paint booth, and we're relocating our cylinder hydrotesting equipment,” says Mahoney. “We're going to do all of our cylinder maintenance here, and once we get up and running, we may take a look at doing work for other people as well.”

The cylinder maintenance facility is just one step in AWESCO's overall plan for greater company autonomy. “We feel that we need to be as much in control of our own destiny as we can be,” explains Mahoney. “If it makes sense to bring more steps in-house, we'll do it. At the end of the day, our customers are counting on us to make sure the job is done right.”

And that's an expectation AWESCO definitely knows how to deliver on.