Amsco Building On Existing Base and Looking Beyond

Salt Lake City window manufacturer sees new composite line as key to growing
January 1, 2005

Amsco set up production for the Renaissance composite line in a separate department. Although staffed by a relatively small number of people, it is sized and equipped to expand capacity in response to increased demand.A pioneer in its market, Amsco Windows was one of the first manufacturers in the Rocky Mountain region to actively promote vinyl windows. In a move that would later play a critical role in the significant growth it has seen during the past 20 years, the company launched a vinyl window line in the late ‘80s. Now, the Salt Lake City manufacturer is promoting a composite window line, and it hopes once again the new product will be a catalyst for growth in coming years.

Amsco launched the Renaissance window last summer. Constructed of wood/cellular polymer composite profiles, the unit offers the look and feel of a wood window, combined with the low maintenance of vinyl, according to Steve Sullivan, the company’s director of marketing. Like a wood window, it features stile-and-rail type sash construction and a variety of interior finish options. Exterior capstock coatings provide the color variety and low maintenance of cladding.

The launch of a new line always presents challenges, and those challenges can be even greater with such a unique product. “One of the biggest, I think, will be to balance production capacity with sales, and keep up with the same sort of delivery times and service levels we have on vinyl,” says Bart Naylor, co-president and co-CEO. Many of the company’s dealers, which largely cater to the new construction market, also are not used to “upselling” a higher-end product, he adds.

The Renaissance line, however, fits very well into Amsco’s overall strategy and vision, emphasizes Tracy Shaver, the company’s other co-president and co-CEO. “We like to be on the leading edge, as well as offer the best available technology.”

Core Values
Originally Aluminum Manufacturing and Supply Co., Amsco was founded in 1949 by Philip Rasmussen, who returned to Salt Lake City from the U.S. Navy determined “never to take an order again.” Rasmussen instilled a number of core values at Amsco, says Naylor, and one of those was to remain focused on its employees. That means more than treating them with respect and providing good benefits, he adds. Unlike some entrepreneurs, Rasmussen always has been able to empower employees, Naylor states, and as a result, employee retention is high.

That has proven beneficial in starting up production of the new line, says Shaver, who notes that in some ways, the addition of the composite line “reminds me of when we got into vinyl.” Because many of Amsco’s employees were involved with the vinyl window launch, they bring a great deal of knowledge and experience to the start-up process. “It’s neat to see guys come up with new ideas. There’s a tremendous amount of enthusiasm,” says Sullivan.

In terms of actual production, the mechanically-fastened composite windows assemble like aluminum, Shaver adds. “We’re using some old-time processes that are new to us, but it turns out they are not so new to some of the guys who were here in the aluminum days,” he reports.

Dealer Relationships
Rasmussen was also behind Amsco’s commitment to strong dealer relationships, which begin with delivering products as promised, but also require going one step further. Like other manufacturers, Amsco often goes the extra mile to speed up the occasional order. “They’re our bread and butter,” notes Shaver. “If they need one window, we get it to them.”

Amsco has a tradition of investing heavily in its manufacturing equipment, and even builds redundancies into its system to assure it has the capacity to meet demand and offer quick turnaround on orders.

Amsco is committed to providing dealers with all the tools they need to support their operations, he continues, and one of its more successful dealer efforts has been installer training and certification using the InstallationMasters program developed by the American Architectural Manufacturers Association. The company’s dealers can differentiate themselves with certified installers, and “we’ve had a wonderful response,” Shaver reports.

Amsco is dedicated to promoting dealer growth and avoids situations that can lead to conflict, such as builder-direct sales, Naylor points out. “Dealers learned they could trust us. In the end, the builder gets better service too.”

In Amsco’s early years, Salt Lake City’s relative isolation from other major population centers was beneficial to the company, says Naylor. There were always a few other local window fabricators, but larger window and door manufacturers were not attracted to the city. Shipping to and servicing a market that was not huge to begin with meant that the Salt Lake City area was not that attractive for companies based hundreds of miles away. That has all changed, with more people moving into the Mountain States in general, and the Salt Lake region in particular, with its many nearby ski resorts. A growing market has meant the competition is no longer just local. “It has made us better,” Naylor says. “With the biggest guys out there coming to town, we know we can never let our guard down.” It also has reinforced the importance of maintaining dealer relationships. “When you’re the only game in town, there’s nothing to compare you to, so dealers naturally experiment and see who else is out there,” he explains. “What’s gratifying is that they come back.”

When the majors first come, they often start by selling through dealers but end up selling direct to the builder, adds Sullivan. “The dealer becomes disillusioned.” Pointing to cities like Reno and Boise, where Amsco has expanded in recent years, Sullivan says the manufacturer’s strategy is to carefully choose one or two dealers, rather than try to saturate the market. “We then work to give them the tools they need, and they’ve boomed. In turn, those dealers stick with Amsco and really work hard for the company because they see us working for them.” This approach has been very successful for Amsco, Sullivan notes, providing the company with good penetration into the builder markets in much of the Intermountain West.

On the flip side, this strategy can limit opportunities somewhat. Most of the company’s growth in recent years has come from expansion into new territories as its loyalty to certain dealers prevents it from adding more dealers in its existing markets or selling through other channels.

Amsco’s specialty department will play an important role in the success of the new product line.  Specialty windows incorporating the composite technology can be very cost competitive with wood specialty units.
Something a Little Higher End
Amsco is committed to growth, however, and Naylor explains that for the past five or six years, the manufacturer and its dealers have been looking for something to differentiate themselves—“something a little higher end” to take to their existing markets. A key reason for choosing the composite, Shaver states, is that “our customers actually asked us to do it.”

“In the past, they’ve had to go elsewhere for a high-end, wood window product,” says Naylor. Now they can get a product that meets the needs of custom and high-end builders with the same quick turnaround times and level of service they can get with vinyl windows and doors, he asserts. “We have a ready market there, because many of our dealers prefer to deal with us.”
Dealer reviews of the new product have been positive. Although skeptical at first, they now see the line “is not just different than wood or different than vinyl; it’s a quality product. The aesthetics are there,” Sullivan states. When the Renaissance line debuted at the Pacific Coast Builders Conference show last summer, some attendees said it looked more like a wood window than a clad-wood window does, he points out.

Dealers also appreciate the line for one of the same reasons Amsco does, Sullivan continues. “We wouldn’t want to cannibalize what we’re doing already. We don’t see it taking away from vinyl sales. We see it building on them,” he explains, pointing out that  most of Amsco’s dealers see the line as a new opportunity to sell to custom and high-end builders.

Replacement Market
Originally a retail operation, Amsco was initially involved in the replacement segment of the business. Spurred by the building boom in the West, its dealer base switched largely to the new construction business, and Amsco’sBart Naylor, Steve Sullivan and Tracy Shaver, left to right, are spearheading Amsco’s efforts to roll out the new composite line. commitment to its dealers led the company to do the same, says Naylor. It has been focused on the new construction market ever since.
Amsco has eyed the replacement business for some time, admits Sullivan, but shied away from the specialty dealer/remodeler segment—those firms selling directly to homeowners—because it didn’t want to enter the market as a “me-too” supplier. In addition to the potential the Renaissance line offers through Amsco’s existing dealer base, the new composite line provides a unique opportunity to enter the replacement market with “something truly different,” he continues.
Now, Amsco’s “looking for a few good men” to take on the line, with plans to take a similar approach with dealers in the replacement business as it does in new construction, Sullivan states. “We’re not looking for 50 guys in Denver to sell this window; we want two that we can partner with.”

To ensure it can provide its dealers the products and support they need, Amsco plans to take it one step at a time into this market, says Sullivan. The manufacturer is currently working on the marketing infrastructure and support materials necessary for selling to homeowners. It also continues to ratchet up production capacity, he notes.

“We have to be careful not to get into too many areas at once,” adds Naylor, who sees matching capacities with demand and maintaining service levels as the biggest challenge in the launch of the product line. That will be a bigger challenge on the retrofit side, he continues, because the market is very new.Amsco maintains a large inventory of stock size windows, which enables it to deliver product quickly.  The stock program also increases manufacturing efficiency, as stock units are batched with each day’s custom orders to maximize production output yet still meet requirements for short lead times.

Prior to its vinyl window launch, Amsco employed about 65 people in the early ‘80s. It now employs over 400 people and is a Window & Door Top 100 manufacturer with sales in the $50 million to $75 million category. While the new composite line may not enable the company to more than quadruple in size again, executives agree it clearly offers potential in both the new construction and replacement side of the business.