Eliminating Silos at Airgas
"I think the key is getting unified information off of one database that is consistent and can be shared across the country," said David Levin, vice president of hardgoods for Airgas, Inc.
- By Jerry Laws
- May 01, 2012
We can count Airgas, Inc. among the large U.S. safety distributors spending millions of dollars on a transformational IT implementation. When the five-year implementation of an SAP information system is completed and knits together the Radnor, Pa.-based company's sales and distribution units, the result will be one unified database for all.
"SAP gives us the tools to bring together the various sales channels to all of our customers. Specifically, the telesales channel -– one of our big focuses -– is leveraging the SAP platform," said Donald Carlino, Jr., president of Airgas Safety. "The platform gives us visibility across our entire customer base and allows us to bring the telesales channel to bear for our regional customers, whom we don't reach proactively today. Before the migration, the telesales business had its own system, its own database of customers.
"It's bringing us together nationally," he continued. "We've always been a locally based business -- that's always been our core. We've grown our business by being very good locally. As customers transition or merge, there's much more need for overarching supply chain management and consistency of approach for these strategic customers. SAP, by bringing together all of our distribution businesses -- that were geographically boxed in on separate systems -- on one platform, gives us much, much better visibility and much, much better ability to serve our largest customers. We'll be more efficient at moving product, we'll have much more information about our customers available at our fingertips, and will gain back-office efficiencies, as well. It touches all aspects of our distribution business."
Interviewed along with Carlino in March 2012, David Levin, vice president of hardgoods for Airgas, Inc., said companies within the corporation are migrating to the system every few months even while maintaining high service levels. "I think the key is getting unified information off of one database that is consistent and can be shared across the country," Levin said.
Airgas is one of the largest safety distributors in North America. It was primarily a gas and welding distributor that sold some related safety products until the mid-1990s, when it acquired some safety distributors and began expanding its focus on selling the full array of head-to-toe PPE and safety-related products.
"We drove the safety sales focusing on safety users and customers that would be using safety products but we also looked to penetrate the market with the customers that we already had," Levin said. "So the customers that were already buying gas and welding products, we worked harder to make sure they were buying their safety products from us, as well."
"The platform companies that Airgas bought collectively have been in business for 90-plus years, so they have a very strong basis in safety and go-to-market strategies," he said. "At the time, I would call us good-sized players but not necessarily leaders. Today –- we don't like to rank ourselves, but we will tell you we're one of the leaders in safety distribution. We represent all of the key brands out there, all the lead brands that are called for, and if you look at those manufacturers, we're generally among the top customers of those brands."
Airgas employs specialists in safety, as well as for bulk gas and specialty gas, among others. These specialists are brought in to assist customers as needed. "We're able to do an awful lot of on-site safety reviews and safety training along the way," Levin said.
"When you're solving problems for the customers, helping them in their environment to have a safer operation -- generally speaking, in those kinds of relationships the product pull-through is robust," Carlino said. "We feel like if we can help customers solve problems, be it training or an application question, they see value in that, and the product pull-through just follows."
Levin said Airgas printed about 400,000 copies of its 2012 safety catalog. The number it prints has expanded only slightly in recent years, and the size of the catalog has changed little, he said. "We keep it as what we call our A and B products, as a representation of what we sell. Not everything we sell gets put in the catalog. We try to use it as a primer or an exciter to customers, and then we use our sales efforts to sell the additional products," Levin said.
"We view the catalog as an augment to our sales approach. It's part and parcel of it; it's not it. We don't rely on just mailing it and waiting for the customers to call," Carlino added. "One of our strengths is that we’ve got the size and the infrastructure to really interact with all size customers from several different service channels. We have national sales leaders who are managing large, national, multi-location, complex customers across the whole country. We provide a lot of different approaches to them, depending on their particular needs."
Reaching Customers Through a Variety of Channels
In addition to direct sales personnel, Airgas has outside direct safety specialists who focus on the core of Airgas' business. "An inside telesales team works with customers of all," Carlino explained. "And, of course, we also have an online offering for those customers who perhaps want to go online and search for a glove or a couple of [pairs of] eyeglasses, helmets, etc. We also drive customers in all channels to our online platform for those who prefer to do business with us electronically.
"Within those categories are other approaches: We have supply chain management, VMI approaches, we have vending machines. We have all of those service offerings that can cut across our sales channels to support the customer really in any way the customer needs to be supported," he said. The mix includes field sales, more than 800 stores and the Airgas private label brand, named Radnor®, which offers products that the everyday user is going to be using in a given category.
"A given customer may need to access all of our sales channels, and that's fine," Carlino said. "We know that more and more customers are looking for consistency of offerings, national pricing, national reach, and that's what we offer," he explained.
More than halfway through the five-year SAP implementation timeline, a lot of convergence still needs to occur. Half of 12 regional companies still needed to convert to the system at press time, they said. Management worked hard up front to ensure each conversion goes more smoothly than the previous one, Levin said.
This article originally appeared in the May 2012 issue of Occupational Health & Safety.