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Buyer Trusts Vender: A Novel Approach to Purchasing
Gas & Supply and Barriere Construction Co. Pave New Kind of Relationship
Imagine buying your groceries by the cart-no poring over the Sunday paper for coupons, no price shopping for the best deal on canned peas-just walk the isles, take what you need and trust the total cost will beat any place in town. If it did, week after week, wouldn't you come back? That kind of thinking comes naturally to Joe Hefler, Manager of Support Services for Barriere Construction Co. L.L.C. in New Orleans. After all, he came to Barriere from years in management at a large Louisiana grocery chain. When the superstores finally overwhelmed his long-standing regional grocer, Hefler pushed his shopping cart philosophy down the road and introduced it to a new industry. Barriere Construction Co. is a firm with nothing to fear from big-box retail. One of Louisiana's largest Heavy and Highway contractors, it employs more than 400 and earns revenues approaching 100 million a year. Barriere was doing a lot of things right at the time it hired Hefler to shepherd broad cost-cutting measures in its inventory and purchasing. "Joe Hefler's experience helped us see the full costs of our transactions," explained Company CFO Brian Cooney. "He helped tremendously in our purchasing programs." Hefler recalls his first impressions as a challenge: "We had five purchasing agents sending out hundreds of purchase orders, all trying to save two cents on the low bid. Accounts payable handled hundreds of checks every month. Our foremen came to me daily for materials, all of which I had to keep in stock and on site. Tracking was all done manually-too much work!" Hefler knew there was a better way. "You want to develop a relationship with your best vendor, one based on price and service. You save money in the long run by sticking with someone you know and trust." A Partner In Change
Gas & Supply was a trusted and long-standing Barriere
vendor, providing tools, welding and shop supplies; but it was only
one of several possible candidates to help the company streamline its
purchasing system. Cooney asked Hefler to put five top suppliers through
a rigorous vetting process. "We revisited our arrangements with all
our vendors," said the CFO. "We needed to determine if there were any
better solutions." His first call was to Russ Sanzone, a veteran sales rep for Gas & Supply and a familiar name at Barriere. "I've been working with Barriere for twenty years," said Sanzone. "I know what they need in equipment and materials, and I know Gas & Supply can provide it." But Hefler had more in mind than tools and welding supplies. Sanzone recalls, "He also wanted to drop some vendors, reduce paperwork, cut payroll and eliminate all his inventory. Joe wanted detailed purchase reports, a monthly bill and to write just one check." A lot to ask of a welding supply company? Not according to Hefler. "We knew they had the ability to do it. Gas & Supply was ahead of the competition in IT support." Hefler handed Sanzone a grocery list of needs for his new purchasing system. It was a long list and none of it available off the shelf. Sanzone, in turn, brought the Barriere mandate to Gas & Supply's Jeff Kearns, confident the tall order would be no obstacle: "Jeff was the man. He made it work." Kearns worked closely with Gas & Supply technical staff and with Dewey Hebert
at Barriere to build a system detailing their buyer/vendor relationship.
"Our programmers worked to match Barriere's specific reporting requirements;
it was a custom job, and it wasn't easy." Nonetheless, Gas & Supply soon had
a tracking system producing detailed reports of every purchase by Barriere. The Ultimate System
With that, Hefler had exactly what he was after: "I had no more paperwork. Our inventory vanished. We just let Gas & Supply handle all our supply needs, which they do well. Without having to stock a single item, we now have access to their entire catalog, and it's big. We can buy anything from them." CFO Cooney agrees: "The Gas & Supply/Barriere system has significantly reduced our costs, both in what we buy and in what we spend in transactions. We see these programs as critical to the support of our business." Kearns' account of the finished product was typically low key, allowing finally that Barriere was "very happy" with the solution. Hefler, in contrast, was effusive: With a career's worth of experience in distribution and purchasing, he praised Gas & Supply for what he called "the ultimate system." Barriere eventually exported the concept to two other vendors and has cleared its warehouse completely. "When you're getting everything you need [from your vendors], you gotta have a real good reason to change. We have that kind of relationship with Gas & Supply. They did whatever it took to keep our business. As Barriere grows, we expect Gas & Supply to grow with us." In short, Barriere Construction Co. plans to keep filling its cart
at Gas & Supply. |
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