Above: Serving various locations throughout the United States allows Kelly Pipe to offer pipe at all pricing levels.
A sweeping inventory and willingness to educate customers is invaluable
May 2013 - “Where service is concerned, it’s not about the special order one-offs, it’s about day-to-day reliability,” says John Fitzgerald, CEO, Columbia Specialty Co. Inc. “It’s a tough economy right now. Everything is a battle, every order is a battle and we’re doing OK.” Competition is fierce throughout the metals industry, and in order to keep up, a company’s chain of operations needs to run smoothly.
Long Beach, Calif.-based Columbia Specialty relies on Kelly Pipe Co. LLC, Santa Fe Springs, Calif., to provide carbon steel pipe for a variety of applications. “Kelly Pipe has grown into a major player as a master distributor with locations all over the country,” Fitzgerald says. “They’re invested in their inventory. With the market being so unpredictable, it’s a big deal for us to know they have the inventory in stock when we need it.”
Fitzgerald adds Kelly Pipe’s unique approach benefits Columbia Specialty because it works with the pipe distributor and not against it. “Kelly Pipe provides a lot of volume, big pipe orders, whereas we shine providing smaller to medium customized orders to customers,” Fitzgerald explains. “The orders are less than full truckloads, and our customers require service time in hours, not days.”
Columbia Specialty purchases product from Kelly Pipe, which it resells and sometimes cuts to length and end finishes according to customer specifications for all scheduled and all wall thicknesses. Its customer base includes mechanical contractors, commercial contractors, OEM users, institutions and government projects, as well as some water treatment companies.
Columbia Specialty also sells fittings and valves, and provides machining services and accessories for stainless, alloy, carbon and copper piping. “We sell so many different kinds of materials and products that we’re not able to put in the tremendous amount of assets that Kelly Pipe does into its carbon steel pipe inventories. They give us the ability to be competitive without that kind of investment,” Fitzgerald says.
“We have the capability to cut and end finish pipe. Some of our customers require close-tolerance work so we have a machine shop and handle the custom requirements of many of our customers,” says Mike Taylor, president of Columbia Specialty. “We meet all different kinds of requirements for many industry segments.”
The standout option
There are other choices available in the market and other large master distributors, but Columbia Specialty sticks with Kelly Pipe. “They were determined to work with us,” Taylor says. “It takes a very large investment to become price competitive in the steel pipe market. You can’t have a couple hundred tons of steel pipe and be competitive; you have to have thousands of tons.” Kelly Pipe has acres of steel pipe in Southern California alone. “That’s a serious investment,” he says.
Kelly Pipe’s worldwide and domestic sourcing capabilities allow the company to reach a wide span of customers. There are multiple locations throughout the United States and overseas. Serving various locations throughout the United States allows the company to offer pipe at all pricing levels. Its overseas reach enables the company to work with large multinational corporations, as well as local pipe dealers.
A customer with a major order of specialized material can give Kelly Pipe advance notice so the company can accumulate and stage the material in a designated part of its yard. “In Columbia Specialty’s case, they can come in and pick it up since they are 20 minutes away,” says John Wolfson, vice president, western region, Kelly Pipe. “They have a small yard and don’t carry the quantities or product diversification we do, so they rely on us as a master distributor. In effect, they count on us as being their pipe yard.”
Customers also frequently require just-in-time orders. “Because of our size and buying power, we can handle these types of jobs, which smaller shops prefer not stocking on their own or tying up their capital,” Wolfson says. Even more important to many customers, the risk of price fluctuations is removed by relying on Kelly Pipe for their inventory needs, he says.
Sixty percent of Kelly Pipe’s business comes from the energy sector, including traditional energy, alternative energy and utilities. Kelly Pipe’s channel of distribution to this vital industry is as a master distributor for the company’s line pipe group and as direct distributor to end users for the company’s oil country tubular division. “It’s one industry that hasn’t crashed, enabling Kelly Pipe to continue growing and expanding,” CEO Len Gross says, adding that piping needs differ depending on the application. “The same pipe is not used in construction as for energy drilling, so the cutback in infrastructure building and commercial development in 2009 and 2010 was cushioned for us by a pickup in demand by energy companies,” he says.
Kelly Pipe specializes in carbon steel and alloy pipe and provides value-added services including cutting, threading, grooving, blasting and coating at its various locations. “Different pipe applications need a special coating if they’re going to withstand caustic surfaces or will be placed underground,” Gross says.
Keeping with its desire to move forward in an industry where innovation isn’t necessarily a constant occurrence, Kelly Pipe is harnessing the power of new technology. The company recently installed and converted to Microsoft NAV Dynamics, an advanced mid-market ERP system.
Recognizing that today’s buyers are on-the-go, using smartphones and tablets, software developers at Kelly Pipe have released a mobile Kelly App called Pipe Source that is available on Apple or Android devices. The application contains extensive facts and figures about product specifications and converts measurement units such as metric to imperial units or pounds to tons. “Anything you want to know about pipe is there if you’re out in the field and not in front of the computer,” Gross adds. The application is equipped with GPS capabilities, letting customers know which Kelly Pipe location is nearby.
Developing the application took proactive steps on the company’s part, including finding out what customers wanted most from a convenient, mobile source. “We’re proud of it. It took time to develop by identifying essential information about pipe, which users need when they’re on the job site,” Gross says.
The company also is releasing a training program on pipe that will be available online or in-person. “We plan on meeting with customers at their lunchtime and conducting an hour presentation that will help them become more knowledgeable about pipe characteristics and placing their order—whether it’s from us or elsewhere.”
As for expanding and hiring additional employees, Kelly Pipe invests in an aggressive management training program, Gross says. New hires go through various functions within the company including inside and outside sales, purchasing and credit. “We actively recruit and hire recent college graduates, as well as routinely promote from within. Training starts in the yard and warehouse,” he says. “Today, many such valued employees are occupying vital positions throughout the organization.”
Taylor says Kelly Pipe’s reaction time to urgent calls also is key. “If you need something turned over fast, they’ll make it work,” Taylor says. “I think their breadth and depth of inventory is advantageous to anyone using them. They have just about all grades of steel pipe, and you find yourself finding 90 percent of what you need from them.” MM
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