Masters of Logistics
One of the oldest family-owned businesses in Alabama is also one of the swiftest. Master of logistics, Mayer Electric delivers 250 orders a night across the Southeast, with ISO-certified efficiency and a troop of night-prowling tractor trailers called the Bullet Fleet.
Family business extraordinaire — COO Charlie Collat Jr. with his son, Trey, before a picture of Collat’s grandfather Ben S. Weil Sr. Today’s COO is also in the wall photo as a child.
From any perspective, the story of Birmingham-based Mayer Electric Supply is a case study in family business success — and succession.
Founded in 1930, the company operated 41 years before opening a branch in Montgomery in 1971, its first out-of-town facility. It has since developed into one of the larger wholesale distributors of electrical supplies and equipment in the nation, with a network of 54 locations in 11 states, including 15 in Alabama.
Mayer has 1,100 employees — the company calls them associates — and more than 400 of those are in Alabama. With annual sales close to $741 million, it is probably the largest distributor of electrical supplies in the southern United States, according to the company’s website.
“We’re in the third generation of a family-owned business, we’re in our 85th year and we’re beginning to educate the fourth generation on the values of our business,” says Charlie Collat Jr., 48, the company’s executive vice president and chief operating officer. “Most companies don’t survive a leadership transition; most companies don’t survive an ownership transition. But we were able to successfully navigate from the second generation to the third generation, and that comes with good planning.”
A watershed moment in the company’s history came when Collat’s father, Charles Collat Sr., joined the company in 1953. With his wife, Patsy, who was the daughter of the company’s founder, Charles Collat Sr. assumed ownership of the business through a leveraged buyout in 1979 and proceeded to direct a transformation that resulted in the Mayer Electric Supply of today.
Patsy Collat died earlier this year. Charles Collat Sr., 83, now serves as chairman emeritus. Third-generation leadership of the business now rests with his daughter, 56-year-old Nancy Collat Goedecke, the current chairman and CEO.
When Charles Collat Sr. headed the company, he made it known he placed a premium on achieving three goals: having the best people, the best systems and a healthy balance sheet.
“My father believed you have to have all three of those things back in 1979, and it’s still true in 2015,” Collat says. “You can’t lose sight of that. If you lose any one of those things, you’re likely to fail. It’s like a three-legged stool.”
To achieve those goals, Mayer Electric Supply implemented continuous improvement measures focused on people and systems. That focus has yielded several results. For example, Mayer uses a long and selective interviewing process aimed at hiring and training the right people. Another result is careful attention to information technology developments and programs, leading to information-based systems that lend themselves to efficient operations and fast communication between associates and customers.
Most impressive is Mayer’s timely order delivery system that is 99.62 percent accurate — a metric that’s borderline mind-boggling, since Mayer Electric stocks 40,000 different items and has more than 43,000 accounts across several different industries.
“We have a vision as a company to be the first choice of our customers, first choice of our associates and first choice of our suppliers,” says Dale Sanders, 50, Mayer’s regional vice president for Alabama and portions of the Gulf Coast. “We really started driving continuous quality to make a difference and be the absolute best and a low-cost distributor in our business. Was it competition driven? I would say, ‘Absolutely,’ but the fact is that it’s driven more by the vision of our owners and leadership team.”
A key asset and major selling point is Mayer’s ability to move inventory — currently valued at $74 million — within its network of branches and hub locations. Keeping those locations fully stocked and primed to deliver orders is not only a priority but also a major competitive advantage, company officials say.
Mayer has its own fleet of some 200 trucks and vans, including 53-foot tractor-trailer rigs. The larger trucks deliver orders each night from company hubs to the branches, which in turn distribute orders to customers. The Birmingham hub alone — one of eight in Mayer’s system — sends three tractor trailers to various branches and a hub near Atlanta each night, delivering an average of 250 total orders, with each truck averaging 325 miles per nightly run.
That process — which one company source calls “logistically amazing” — proved so successful that the company coined a name for its night-prowling tractor trailers — the Bullet Fleet — that is now used in marketing efforts promoting fast, accurate order delivery.
“While we do have LTL (partial load) carriers that we utilize for some types of shipments,” says Sanders, “anything being transferred between our branch locations and hub locations is done on our trucks, our Bullet Fleet that we run nightly. We know that with our trucks and our people, we have more control of the process and can deliver more consistently and accurately to our customers.”
Sanders and Collat note that Mayer has consistently pursued innovative policies for at least 30 years, leading to many “company firsts.” Mayer, for example, was the first distributor of electrical supplies in the United States to be ISO-certified, which requires documentation to prove performance at a recognized higher level.
Despite the emphasis on systems and continuous improvement, Sanders and Collat both say that people are the bottom-line key to success. According to Sanders, who has been with the company for 29 years, “Our people, plain and simple, are what make Mayer the success story it is.”
“Our goal is to link through people, because people buy from people, people sell to people, people want to do business with people,” Collat says. “But we also want to create systems that work directly with our customers’ systems. So once you create that really deep bond between the sales person and the customer and you create a situation where your systems are working together, that’s our biggest opportunity to connect with and make a difference with customers.”
According to the Harvard Business Review, roughly 70 percent of private businesses fail or are sold before the second generation has a chance to take over. Only 10 percent remain active, privately held companies for a third generation to lead.
Collat says that members of his family do not take the responsibility of being an owner lightly. He recalls a meeting in the early 1990s with his siblings and his father when “my dad asked us, ‘Do you know what it means to be effective owners?’ and we all said, ‘Absolutely,’ and he said, ‘I don’t think so.’ He knew we didn’t know.”
That was the beginning of careful planning and education within the family to transition from a second- to third-generation business. That planning, done with the help of an outside consultant, continues today for the fourth generation. “If you start early enough with transitioning the ownership and educating the family on the values of the business, and get the emotion out of it, you’re ready to make those tough and difficult decisions when the time comes,” Collat says.
“We’ve spent years writing policies on how our children are going to come into the business. For instance, we have a policy now that our kids are following about what they have to do to come into the family business. It’s not a given, not a free ride.”
Perpetuating a fourth- and fifth-generation of Collat family ownership includes some tough love. If they are to work at Mayer Electric Supply as adults, the fourth generation of Collat family members will have to get a four-year college degree, and they will have to work for another business for at least two years and — most important — be successful in that job.
Then, “If there is an opening in the family business, we will bring them on board,” Collat says. “But we’re not going to create a job for them.”
The Logistics of Community Investment
There is a definite Horatio Alger twist to the Mayer Electric Supply story, which started with a destitute Birmingham boy who was sent to a children’s home in New Orleans to live and be educated. The boy, Ben Weil, eventually obtained an electrical engineering degree at Auburn University in 1910. He worked for Alabama Power and a distributor in New Orleans before returning to Birmingham and starting Electrical Supply Co. in 1930. Forced into bankruptcy during the Depression, Weil soon sold the business to Max Mayer, who added his name to the company’s title. Weil then bought the company back from Mayer in 1934 but retained the Mayer name.
Flash forward to 2013: The University of Alabama at Birmingham announces that it is naming its School of Business in honor of Weil’s daughter, Patsy, and her husband, Charles Collat Sr., to recognize some $25 million in contributions and pledges the Collats had made to UAB.
That certainly wasn’t the first time that the Collats, the owners of Mayer Electric Supply, had been recognized for contributions in the community. Says Charlie Collat Jr.: “My parents were and have been and continue to be extremely generous, and we like to make an impact and use our dollars so they can definitely make an impact for the long run.”
Nancy Collat Goedecke, who succeeded her father as chairman and CEO at Mayer Electric Supply, is the 2015 chair for the United Way of Central Alabama’s annual fund-raising drive.
Mayer Electric Supply places a premium on community involvement, says Collat. “Our corporate footprint is 54 cities, so we look at it as 54 different locations, but we believe down to the basic core that it’s important to give back to the communities we serve.”
Charlie Ingram and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.