Building a Brand in the Vinyl Window Market
Simonton Windows grew throughout the '90s to become one of the first vinyl window manufacturers with a national presence. One key to that achievement was its efforts to set an industry benchmark of seven days for delivery times nearly a decade ago.
John Brunett, Simonton's president, still sees that benchmark as an important element in its growth, although he emphasizes that it is the Parkersburg, WV, based company's employees who make it possible. In 1989, Simonton set its sights on being a national company, and Brunett stresses that it's the commitment of its employees to its core values of "Quality Products, Complete Orders, Delivered On-Time," that has enabled the firm to reach its current position in the marketplace.
A Window & Door Top 100 Manufacturer, with annual sales reported to be in the $200 to $300 million range, Simonton may not be the largest vinyl window manufacturer in the country, but it may be the most well-known vinyl brand, particularly within the construction and remodeling trades. With manufacturing plants in Pennsboro, Harrisville, and Ellenboro, WV; Paris, IL; and Vacaville, CA; a recently added vinyl extrusion facility in St. Marys, WV; and plans announced for a new window plant in McAlester, OK; Simonton has built an infrastructure to serve the entire country and is now setting its sights on establishing its brand name among consumers.
In this interview with Window & Door, Brunett looks back at how Simonton set its industry benchmark for delivery and how the manufacturer has grown and evolved over the past 10 years. He also offers his thoughts on where the vinyl window and door business is going and how Simonton's efforts to establish a "brand name" for the category may affect the industry as a whole.
Keys to Growth
Window & Door: When Simonton first started manufacturing vinyl windows, it was in a position similiar to many other manufacturers. What do you see as some of the keys to Simonton's ability to grow and become a national manufacturer? John Brunett: Many things played an important role in Simonton's ability to grow and become a national manufacturer, but if you boiled it down, I'd say there were three keys that were and remain most critical to our growth.
First is technology, defined as integrated information, manufacturing and delivery systems. Technology supports our growth and allows us to meet commitments to our seven-day delivery. It is also augmenting our ability to reduce those delivery times. Our processes are integrated from order entry to our delivery systems. Automation is equally important, but we're very careful about where we use and where we choose to employ it in our manufacturing plants.
Any time we look at technology or automation and the application of each, we first measure it against three or four criteria. The first one would be, "Will it improve ergonomics and safety for our employees?" First and foremost, that's what we look at. Second is, "Will it allow us to be flexible enough to fit our manufacturing needs?" Third would be, "Will it improve the quality of our products and our service levels, and will it improve our ability to produce more and increase our capacity?"
We use a modular-manufacturing format, and we will automate and use technology when and where it makes sense in our facilities. When we make the assessment of when and where, we're looking to meet each of those criteria and make sure we reach our personnel goals, and our productivity and our manufacturing goals. When we look at automated pieces of equipment that are currently in the marketplace, I have yet to discover one fully automated system that will allow us to manufacture at the rates we want to manufacture, and manufacture with the capacity needs that we have today and tomorrow. Technology has really come a long way. Equipment manufacturers have come a long way, but we are still looking for higher throughputs. More importantly, we need to be able to produce the quality of the product that's necessary for us to deliver to our customers.
Other things that were extremely important to our growth then, and will continue to be important to our growth in the future, are the quality of our products and the services that we provide our customers. I think we have been able to set standards in the marketplace. Our delivery standard is a benchmark in the industry. I will also add to that, the service levels that we provide are as high, if not higher, than the traditional levels you see in the industry. It's not just being able to deliver a quality product on-time and complete in the specific timeframe that you tell the customer. It's all the ancillary parts of a company, such as our ability to provide marketing support, and our IS department's ability to provide services to our customers. As technology becomes more and more important, our ability to be fluent in new technologies allows us to help our customers. That's going to be one of the keys to customer services going forward. We can be as advanced as possible in those arenas, but we need to educate our customers regarding the possible use of those technologies.
In West Virginia, glass fabrication operations are located
in the company's Ellenboro plant.
WD: Are customers looking for more services in the information technology arena?
JB: They are absolutely looking towards us to support their businesses by use of technology and our ability to provide them data almost instantaneously. Everyone is trying to shrink the time between when a window is ordered and when it is installed in the consumer's home, if you're looking at dealer direct. And, every contractor is looking for product to arrive when they want it so the trades can install it and there is no interruption in their building schedule. So absolutely, they are looking for us to provide information to them. Getting back to keys to our growth, and I'll mention this third, but it's certainly not last. It's probably one of the key elements that's allowed us to enjoy growth over previous years and will continually allow us to grow. It is our people. Simonton Windows employees are responsible for making everything that we have-from equipment to new technologies-work. Every manufacturer can literally buy the same pieces of manufacturing equipment that we can. The key is deploying the technology we have, the information systems that we have, and allowing our employees to make everything work in a fashion that's best in our manufacturing models.
WD: While Simonton appeared to be growing and doing well in the '80s, it seems like things really took off in the '90s when the company was acquired by some long-time employees and SBR. What were some of the key introductions and developments that came about with the new ownership?
JB: First and foremost was the vision to build Simonton Windows into the first truly national vinyl window company, selling the highest quality products while providing the highest level of service.
WD: There was a conscious decision at the time that you wanted to be a national company?
JB: We wanted to be a national manufacturer and distributor of vinyl window and door products. Back in 1989 when the new ownership took over, the company was thriving, but we only sold windows to less than a third of the country. And, at that point in time, when the new ownership took over, it was decided that we wanted to be a national distributor. Just about every change at Simonton since 1989 has come about as part of accomplishing our vision-the vision to be the best and most complete national distributor of vinyl products in the United States. The vision has only been accomplished, I have to go back and reiterate, through the efforts of our people, who strive to continue achieving this goal, every day.
Benchmark for Delivery
WD: Simonton is seen by many as the benchmark for delivery times in the window and door industry. I would assume delivery times played a role in the company's success. How was Simonton able to achieve two-week deliveries back in the '80s?
JB: Our fast delivery times are very important to Simonton's success. I'd like to say it was the result of intense study and analysis, but that's not the case. Actually, the 14-day delivery resulted in 1984, when Sterling Simonton, then president of the company, bought a car. Average delivery in the marketplace was six to eight weeks. Mr. Simonton ordered a car that was going to be delivered in six weeks- custom colors, custom pieces, custom this, custom that. The light bulb goes off and he says, "If they can custom build a car in six weeks and that's the average for the industry, and we're building a window, we ought to be able do it quicker than that." So he goes out and says, "We're going to start delivering windows in two weeks." The troops sit down together and figure out how we're going to do it, and literally, overnight, start delivering in two weeks.
In 1992, under new ownership, the decision was to go to seven days. That decision was not talked about a lot. It was simply, "We're going to go to seven days." And in very short order, we were delivering in seven days. The reason we went to seven days is that a lot of our competitors were catching up. To be able to stay ahead, the mandate was to go to seven days. In fact, today, we're able to deliver 80 percent of our products in four days. The only reason it sometimes takes the full seven is the time and distance of travel.
It has absolutely been one of the key advantages we've had in the market, that we're consistently able to do it, day-in, day-out, week after week, 52 weeks a year. A lot of non-regional companies have been able to tout seven-day deliveries, but not for 52 weeks of the year. They're successful until volumes hit, and then you'll see them go out to two, four, or even six weeks. Today, I think we're the only national company that is able to deliver a product consistently in seven days.
WD: How was Simonton able to shorten its delivery times?
JB: You can't do seven-day delivery unless you have a commitment from your employees to do it, that's number one. Number two, you have to provide them the infrastructure with which to do it. The systems, the integration of systems from order entry to manufacturing through delivery, and then the physical assets by which you get the products to our customer. But first and foremost, the attitude and willingness and desire to do it has to come from the employees, especially at the initial stages. Now that the systems are in place, you still have to have the support and commitment from your employees, and we've refined it well enough that the system works really well.
WD: Was Simonton ahead of the curve, as far as having computer systems and information technology in place?
JB: Our systems are pretty critical. The way we did things in 1992 was different than the way we do it today, but there were certainly systems in place that allowed us to do this-in order entry, in manufacturing, and in delivery. They were more modular in nature, but they allowed us to do it. Today, as things have progressed in the IT and IS arenas, integration is very, very important.
E-commerce has been in place almost five years. It allows customers to send orders directly to us. The use of the Internet is going to become critical in making the system work for the customer. It will refine the way things are done today. That's where you'll see some of the next value-added services come about from manufacturing to the customer. The way a manufacturing company will use its systems to support the customer will be critical in the future.
WD: Do you think lead times can be shortened again?
JB: Yes, I believe the lead times can be shortened again. I don't know whether the industry will require it; however, we are placing new manufacturing operations strategically throughout the United States, and always improving processes through technology, so that we will eventually be able to decrease our delivery time to less than seven days, under normal business conditions.
Establishing a Brand
WD: As far as its position in the industry, Simonton is about as well known as any vinyl window manufacturer. Yet, it still doesn't enjoy the same type of broad consumer recognition that several large wood window manufacturers do. Do you envision a day when this will happen with Simonton or someone else?
JB: There's a big smile on my face because the answer to that question is absolutely yes. We are hard at work to make it happen with Simonton. We recognize there are two types of recognition, one being with the consumer and the other with the building trades. And we've done a very good job over the years in building our recognition on the building trades side. We're well recognized there. We've done this in a just a few short years. Our job now is to build the consumer recognition. We've put together efforts to build recognition within the building trades and we'll do the same thing from a consumer point of view.
From the trade side of it, it has allowed us to grow our distribution, and it has allowed us to cover geographic areas. It has allowed us to strategically place plants and build a sales organization. Over the years, we've worked to put our marketing organization in place. We've put in our systems in customer service, so one of the things this has all done is prepare our company to handle the results of a consumer brand push.
This year we've initiated a national consumer publicity campaign. It's an effort to start building a foundation for consumer recognition of the Simonton Windows brand. As time goes on, you're going to see more activity from us in that arena. Over the next several years, we'll be very active in moving the needle with regards to consumer recognition. I can't give you the date when that will happen; it's going to be an evolutionary process. Just as we spent time deliberately building our trade recognition, we will do the same thing in a very systematic approach so that we are able to cover the country. We're just now about to finish the building blocks and we're off and running. You will see our company become much more aggressive with this effort in the next several years, now that we've got our national distribution in place.
Window assembly operations are located in the company's
Ellenboro plant as well.
WD: Do you foresee other vinyl window companies trying to accomplish the same goals, as far as broad-based consumer recognition?
JB: I think there are some others out there trying to do that, all probably for the same reasons we are. And it's necessary for the industry. Currently, there is no national brand name recognition for vinyl window and door products. There is the possibility that vinyl windows could go the way of aluminum windows if the industry is not careful and if there is not any brand recognition established. The wood business has done an extremely nice job in building their brands, but they've had a lot of years to do it.
WD: How will the development of national brands change the vinyl business?
JB: The credibility of the products will change. I think it will raise the bar for those who haven't been able to achieve the brand recognition. Not to say their products aren't manufactured or perceived well in the marketplace, but it will raise the bar for the growth of those companies. I think it is essential, once brand recognition is started, that the products that are put into the industry under nationally-recognized brands are products that perform. It will definitely have an impact on the industry.
WD: Do you foresee the vinyl window industry evolving to where the wood segment is today, where a handful of manufacturers account for most of the sales?
JB: I think you're going to see a handful of large players. The mid-sized will struggle, and you'll always have regional players that will handle a niche market and will do it very, very well. I couldn't venture a guess as to how many, but there will be a handful of large manufacturers. With all the acquisitions in the vinyl industry, it will be interesting to see how all the brand strategies get resolved. That's a challenge. How do you create one brand that has a force in the industry, with all the different complexities of each one of those companies that you've bolted together? How will they pool all that together? On the wood side of the business, when you look at an Andersen, you look at a Pella, you look at a Weather Shield, that's one brand that's going to market. Will the companies that are actually made up of formerly separate operations be able to do that?
WD: There has certainly been a lot of merger and acquisition activity in recent years. Does Simonton see opportunities taking that route?
JB: Concerning acquisitions, our strategy has been to grow internally, expanding our operations through internal growth rather than acquisitions. Allowing our current customers to grow and capitalizing on our customers' growth; we'd rather do that than acquisitions. This has and may continue to result in slower growth for us than for some others, but it has and will continue to result in more profitability. If there's a good one out there, that meets our value system and provides us with an opportunity, we'll possibly take advantage of it. When you think about what we're doing, we're building one brand name. We're not bolting on parts and pieces here that we have to change, and possibly discard what we've paid pretty high multiples for.
Keeping the Culture
WD: Looking at your internal growth, how has Simonton changed as it has become a national manufacturer?
JB: Our biggest challenge has been to keep the culture of our company consistent as we grow. Simonton employees live and work by our company's core values and business rules, which are in place to help us make sure, no matter what, that every Simonton employee has a strong commitment to our customers' success. Our employees, by far, are most responsible for our past and continued growth. We have a dedicated and committed workforce that is constantly looking for ways to improve our products, our processes, and our service levels to our customers.
WD: Have you had the same type of workforce and culture here for many years, or is it something that's been developed and evolved in recent years?
JB: The quality of our workforce has literally been here from day one. In fact, it's the model that we try to employ when we look at other areas where we want to expand our company. In different geographic areas, we're looking for similar type workforces, similar qualities, and we make our decisions on where we locate, wholly, on our ability to attract a quality workforce.
WD: Is this something that grew out of your West Virginia location or is this something that has been consciously cultivated?
JB: I think the ethic that we're talking about which creates this type of employee has always been here. Out of that ethic, it's our job, as leaders and as managers, to teach our employees what's important in the service levels that we want to provide. It's very easy to teach that. It's very hard to find the work ethic. It's the work ethic that really drives our ability to serve the customer. Like our first facilities in West Virginia, we've sought out a strong work ethic and value system when choosing new communities for our expansion operations.
Since 1995, we've put on Paris, Ellenboro, California, and SimEx, and we'll be putting on Oklahoma. That's a considerable amount of growth in a very, very short period of time. And we guard every day that opportunity to make sure our culture is in each and every one of those plants. Our biggest challenge has been to keep the culture of the company consistent as we continue to grow. We will work on that as much as we work on new products, our programs, new systems, because, without the culture, Simonton will change dramatically. We have to maintain the same value systems we started with, and in order to do that we have to maintain the same culture.
It is systematic, and it started in 1995 with our facility in Paris, IL. We realized we had to bring the manufacturing unit up very quickly, our growth at that time was just phenomenal, and the capacity was needed. That systematic approach came out of necessity. The experience of opening that first plant outside of West Virginia has given us a lot of knowledge. It's absolutely necessary to do several things. The first one is to teach our culture, our requirements, and our service levels, and to teach the intensity that our manufacturing units go through every day.
Let me talk about the Oklahoma plant. When we do our searches, we're absolutely looking for a similar type workforce to what we have in our existing facilities. Once we identify that, we do two things. We look at folks within our company that have the desire to move and succeed, that have the talent to do what we're looking for, and we make those offerings to our employees first. Then we solicit from the area that we're going to locate and start selecting from the talent they have. How we set up the plant, first and foremost, it will be a SMART (Simonton Manufacturing ART) plant, from the very beginning. We'll have SMART teams from the other facilities that we have go in and assist in the set-up. They will definitely assist in the training. Once we select the individuals from the community, we will bring them back into our other facilities for a period of time for training. Once that happens, they go back in their own facility, and we keep employees from our SMART teams at the facility to make sure that everyone is prepared for what is about to happen.
We find that we're most successful when we-upfront- spend the time with new employees, in any area that we set out to build a plant, to bring them into the manufacturing environment that we have. What it does is allow them to see us as a company. To see their counterparts in other facilities and understand the intensity at which we work and the dedication to the customer that we're going to require. You can't do that unless you bring them back into the culture that really built the company. That's the theory. We really did it in Paris, and we did it in California. We brought them back, six weeks at a time, whatever it took.
To give you an idea about what I mean as far as intensity, we never know how many units we're going to produce in a day's time, because of the way our system works, our delivery commitment to our customers, and our order cut-off times. We never know what's going to go to the manufacturing floor prior to the cut-off. It could be 2,000 windows in one plant. It could be 5,000. But our manufacturing employees never know until it hits the floor. Just to show the commitment they have, they know their start time, they don't know their finish time. They know their finish time is when every window is completed and ready for the truck to go to the customer. When I speak of intensity, that's what I'm trying to get across.
One thing I want to make clear, however, is that these types of efforts don't come at the expense of our employees. It may sound like they work 24 hours around the clock. We will employ the equipment that's necessary, and we will employ the manpower that's necessary-second shifts, eventually third shifts, if necessary. One thing they know for sure, once that order hits the system, all those windows have to be done within the timeframe to meet the delivery commitment.
WD: The labor market has been tight in recent years, and has made it difficult for many manufacturers to hire and keep good employees. Has that been a challenge for Simonton?
JB: We have been very fortunate. We have not felt the impact of that. We've noticed that it's getting tighter. I think it's the quality of the company that will attract its employees. I think its the quality of the employees we have that allows us to continue to attract good employees. But, we are starting to see it becoming more difficult in some areas-to attract good employees. That probably brings us to the point where we need to really research and use technology and manufacturing systems, should the labor pool dry up.
WD: You mentioned the SMART program earlier. Can you talk a little more about what that is?
JB: The SMART program really is, at Simonton, a version of lean manufacturing. We don't like the connotation that lean gives. SMART lends itself to being more practical. We're looking for areas in our operations, whether it be from an administrative point of view, in manufacturing, at the point of delivery, or any systems point of view, to identify the non-value-added, and strive to reduce the non-value-added throughout our processes and eliminate them. We actually looked at several programs out in the marketplace. You've heard the buzzwords, Kaisan, lean manufacturing, total quality transformation. You've heard of Six Sigma. We looked at all these programs, but we custom-built a system that met Simonton's requirements. It really started with our quality, engineering, and safety groups. That's how it got started in our company. And, it really got started about two years ago. We had a difficult time implementing it because of our growth. We soon found out, however, that we can assist in our growth if we had a system in place, because it allowed us greater productivity and throughput, and it allowed us to get our folks trained in the areas they worked in. It actually allowed us to grow. We couldn't wait. We had to deploy it.
WD: How did your employees respond to the SMART program?
JB: At first, there was a lot of skepticism. But as they started to see the rewards and benefits they became more actively involved. There are always those that are skeptical of change. But when you start with each individual employee, and you start showing them the benefit and the outcome, they soon join in. In fact, a lot of times, after successfully going through one line, there are volunteers to go into other lines to help. And at other lines, that are not yet scheduled for the SMART process, they start to ask, "When are we going to do it?" Some of the benefits are very simple to perceive. Productivity improves and as productivity improves, the number of hours they have to work in a day is minimized. They are not as tired when they go home. The environment they work in is safe. Key elements are safety, quality, and efficiency and each of those are appreciably seen. And that's what really starts to drive it.
WD: Looking at the future, what do you see as Simonton's major challenges?
JB: Maintaining our value system and quality of life for our employees. We strive to offer our employees opportunities for growth-professionally, financially, and personally. Another challenge is navigating in an uncertain economy. We are faced with adding new manufacturing capacity in Oklahoma and beyond. These large financial commitments are difficult decisions to make in uncertain economic times. Another challenge is choosing our customers correctly, to ensure we can provide them with premium service and meet or exceed their expectations; all while providing real growth opportunities for them with respect to revenue and profits. As competitive pressures mount in our industry, Simonton's job is to "push the envelope," to maintain our leadership role in the industry. There are a lot of great, competitive window companies out there, so our challenge is to create programs and products that meet the market needs and continue to augment our service levels, all while delivering quality products and services to stay ahead of the competition.
WD: What do you see as Simonton's major opportunities?
JB: Take a look back at the challenges I discussed. If we are successful in overcoming them, Simonton's opportunities are endless, providing we stay with our value system and provide opportunities for revenue and profit growth for our customers. WD: From an industry standpoint, it seems that vinyl windows have entered a more mature stage. What are some of the steps Simonton hopes to take to continue growing while vinyl windows as a category are not likely to grow at the rate they have in previous years? JB: I agree that the vinyl window industry is maturing, particularly in certain areas of the country. I believe that Simonton will continue to grow through capturing market share. Simonton's market share in the vinyl window industry is currently about 6 percent, leaving us 94 percent to focus on for growth. In addition, there are a number of other areas that provide us opportunities to explore for growth: pursuing new channels of distribution, introducing new products, targeting new demographics, capitalizing on code changes, and much, much more.
WD: Are you considering new materials?
JB: New materials, like composites, wood flours, and foam products are still emerging. While we keep an eye on the developments in these products and continually test them in our research facilities, at this time we've made no decision to add them to our existing product lines. One of the benchmarks still has to be that it must perform equal to or better than vinyl. It must also be manufacturing friendly. And we still haven't seen it. I do believe that in some point in time that will change, and at that point in time, we will seriously look at adding them to our product selection.
WD: What do you see as some of the potential challenges and opportunities for the industry as a whole?
JB: Acquisitions have put financial pressures in the marketplace. Growth in marketshare for some is being achieved at the expense of profits, and it is setting pricing expectations in the market and reducing the overall value of products being built. I don't think the worst is over yet. This creates an opportunity for vinyl products to become a commodity item. That will not be good for the industry.
WD: In our industry, maintaining relationships is often one of the greatest challenges. As Simonton continues to grow, do you see maintaining the necessary relationships with customers and others as a challenge?
JB: We absolutely worry about it. Relationships are key. We work very hard to develop those relationships. We've had customers in excess of 25 years, and the relationship we cultivated over the years is extremely important, day-in, day-out, going forward. Those relationships enable our customers to communicate with us regularly, communicate with us concisely, and in a fashion that they know they'll get a response, or if there is a problem, it will get resolved. One of the things that will allow us to continue to do this is that wherever we place a manufacturing facilty anywhere in the United States, it's autonomous. And, the plant and its employees really direct what happens there. We staff our plants so each has what it takes to make decisions right then and there, and we make sure those decisions are held at that level so they can be executed quickly. All that filters down through everyone in the organization. It's pretty flat so it doesn't take long to get an answer. It doesn't take long to get a resolution to an issue. That's true whether it's a customer issue or an employee issue. Quite regularly, I'll know about an issue-or, the opportunity, they are one and the same-and it will be well underway toward resolution, and the nice part about this is that I really don't have to step in because folks really believe they have the opportunity here to affect the outcome. Every individual in this company has the ability to affect the outcome of the service our customer gets. And they know that. And, they know they have opportunities to make that customer feel good about being with Simonton, and they provide the service level to keep that customer with Simonton.