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Extreme Branching

July 1, 2012
Codale Electric Supply pushes distribution branch design to the limits, even in its most remote markets.

The design of an electrical distribution facility is not the most complicated thing in the world. You've got some offices, a counter area, a warehouse and some parking. Bang, you're an electrical distributor. The basic design hasn't changed much in several generations.

The industry hasn't really taken a close look at how branches are set up since the '90s, when big box home centers emerged as a competitor and distributors fixated on merchandising and the flow of customers through their counter areas. A lot has happened since then. Advances in the electrical equipment used in commercial buildings generally — lighting, controls and such — as well as the buildings' other systems have reshaped the state of the art around energy efficiency and comfort.

Codale Electric Supply Inc., based in Salt Lake City, has been on a bender lately of building new facilities for many of its dozen locations scattered through Utah, Nevada and Wyoming. These are not your grandpa's supply houses. The headquarters building of the $220 million distributor is a pretty fair example of the state of the art, and the branches show the same bloodlines.

Those who know Dale Holt, the company's founder and CEO, probably know what to expect. The man seems to do nothing halfway. Holt likes things that make you go, “wow.” From the Ferrari engine badge on his red coffee mug to the commemorative box signifying the zillion rounds of golf he's played at Pebble Beach to the Bombardier Challenger 604 business jet on which he flies to his far-flung facilities, Holt is always surrounded by tokens of his success.

Timing isn't always on Holt's side, though. He began the process in 2007 to design and build a new headquarters for Codale. “I couldn't have spent more to build this place,” Holt says. “There is nothing that wasn't at its peak. Steel, everything in this building, cement, it didn't matter what it was.

“And then the market - we didn't go into the downturn until late '08. It was November '08 before we had a down month, and then we moved in here in February. My timing just couldn't have been worse. I've got this thing, a new $500 million building, and I'm going the other direction.”

Most builders would have cut corners to make the numbers work. Not Holt. He wasn't building a bargain. He was building a showplace that would house his growing company for decades. Of course, he had thought that before. “I built the old headquarters to be the last one. I thought I could relieve pressure on the main building by adding branches, but by the time we moved, sheesh we were cramped.”

Clocking in at 210,000 square feet, Codale's new headquarters has room to grow. (There's also a separate building out back for constructing modular utility substations with another 15,000 square feet.) Of that total, 151,000 square feet is warehouse space with a 24 foot vertical cube and systems set up so Codale can pack it to the rafters; the other 59,000 square feet is office space, a lighting lab, conference rooms, exercise facilities and a large room for virtual rounds of golf.

The design of Codale's new branch facilities follows a “cookie-cutter” approach, says Nick Holt, senior manager of business development and construction. But it's no ordinary cookie. Remember those great big cookies you used to get at the mall? This one's 25,000 square feet. Even in Price, Utah, population 10,000.

Having worked in every department at Codale except purchasing, and with aspirations of one day leading the company, it's Nick's job to build the branches. “For his training, I said the only way to learn to do what I'm doing is to go do it,” says Dale. “I said, ‘Go up to Logan, you have to open the branch by yourself - lease the building, grow the business, find property, build a building, replace yourself and then you can come home, but you can't come home until then.’”

In the case of Price, the Codale branch is close to several large mines producing coal, copper and uranium, along with three large power plants and a smaller one, and a uranium processing plant. The Price branch has 10 of Codale's 210 people and room for many more.

One of their goals when the Holts designed the headquarters and their new branch buildings was to showcase their latest electrical systems, especially lighting. Every single office has a different type of lighting fixture in it, every corridor, every restroom. There are seven different types of fixtures in the warehouse and 20 to 30 different outdoor fixtures. Holt estimates the headquarters building has more than 300 different fixture types installed and six or seven different lighting control systems. In the warehouse, there's one row of old parabolic fixtures to show the contrast.

“Of course, it's pain in the ass for the electrician from a construction standpoint. They don't get any flow going. Every single thing they do is different,” Holt says. “But by the same token, they get the experience of building 25 buildings because there's so damn many fixture types in it.”

Especially with lighting, the technology Codale wants to showcase is a constantly moving target. The company has only been in the building three years and has already changed out almost 20 percent of the fixtures. This is also a testament to how quickly the lighting market is evolving. The initial building's lighting systems were about 10 percent LED. The other, newer locations range as high as 60 percent LED and the new branch under construction in Casper, Wyo., will be pushing 80 percent LED when Codale opens the doors in September.

Outside the door to each office, there are signs telling what kind of lighting is being used, the performance characteristics of the lamps and fixtures and other details. On an increasing number of the signs, there are little square QR codes. An engineer, architect or designer touring the facility who sees a lighting effect he likes can scan the QR code with a smart phone and it pulls up a picture of the room along with a full bill of material and a submittal package, all while standing there in the hallway.

The buildings also feature the latest motor control centers and integrated fire and security (IFS) systems from Codale's leading suppliers in each location. The buildings don't necessarily need that much hardware, Nick says, but it's an opportunity to show customers how the systems can monitor and control the building's operations.

Codale's handling of data is entirely centralized, run from a showpiece of a data center at the Salt Lake City headquarters. They put glass panels in the floors and lit the plenum with LED lighting. There are also glass panels in the doors to the server racks and LED fixtures inside the cabinets to light up the servers. “I put theatrical lights in there because it was the only place I could think to put any,” Holt says. “We won a private datacenter design competition with Dell computers. According to Dell we have the best private data center in the U.S.”

From that data center, Codale is able to push training materials out to all its 11 branches and even control the monitors in each counter area from Salt Lake City. Product training is produced and sent by webex to the branches every Monday evening, which makes sure everyone in the company is working with the same information. “That way manufacturers' reps and manufacturers aren't required to do 11 sales calls and go out to the sticks, which involves finding the time to do it,” says Nick.

“Trying to get a rep to go out to Rock Springs, Wyo., or Elko, Nev., or Price, Utah, with any consistency - you're lucky if you can get them out there once or twice a year,” says Holt. “That makes it difficult to have decent, timely training in all the remote areas we're in. This allows us to train the whole damn company with consistent information and we do it every Monday night.”

Codale's deployment of technology extends as well to the tools its sales crew uses in the field. Codale was an early adopter of iPads. All the outside salespeople use them as their primary information tool. All the company's product literature and company promotional literature is pushed out to the iPads from the data center in Salt Lake so the salespeople don't have to mess with downloads and updates. The company's enterprise resource planning (ERP) system, Epicor's Eclipse, runs on the iPads faster than on the laptops the salespeople used previously, Holt says.

The use of technology is part of what puts Codale consistently among the top 20 electrical distributors in the country ranked by sales per employee, a ranking Holt watches closely each year. Codale is #33 by total sales.

The company's managers each have two vehicles for their use - a Ford F-150 for hauling equipment and a Smart car for when they're driving themselves around or just one passenger. They use the Smart cars most frequently, which saves fuel and wear and tear on the trucks, and it makes a statement about the company's priorities and forward vision.

The whole company has a very flat structure - there are no secretaries or executive assistants - and the branches run lean. Functions such as human resources, accounts payable, accounts receivable and purchasing are all centralized in Salt Lake City. The branch managers have no responsibility for inventory. Their compensation isn't tied to it in any way.

“The main job of a branch manager is hiring and firing of their own people, it's more of a sales managing function,” Holt says. “As far as inventory goes, any product line they can stand alone on, they do. It just goes direct from the manufacturer to them, as long as they buy in large-enough quantities. Everything else comes out of here. We cut all the wire here.” In its Salt Lake City warehouse, Codale has two 15,000 lb gravity-fed wire spooling and cutting machines.

All the C and D inventory is kept at Salt Lake City and delivered next day by Codale's fleet of tractor trailers. The trucks themselves are also showpieces. Several of them have been converted to run on natural gas, and Holt expects to convert the whole fleet over time.

Inventory mix varies by branch according to the needs of each local market. Codale serves pretty much the whole electrical spectrum, from small residential to large commercial and heavy industrial, mining and gas production, utilities, datacom and hospitality along the Las Vegas Strip. They have a thriving lighting retrofit and energy-efficiency business and design-build services for modular substations and power transmission and distribution lines, including the surveying.

“The way I look at it, what I'm always looking for is the McDonald's breakfast,” says Holt. “I've already got all the facilities built. I can keep handling stuff out of this building without spending any more money. You look at McDonald's breakfast and the brilliance and the amount of money they made. They didn't have to build one more building, and they got, what, a 30 to 40 percent gain in their business? That's what I look for. We're just looking to add markets that we can get into and make money at. Plus the more specialty type stuff, I got less competition.”

One of the few areas Codale doesn't do much in is renewable energy. Holt doesn't believe the economics of wind and solar can work without government subsidies. “I looked at putting solar panels on top of this place (the headquarters) when we started, but I just couldn't see how it would ever pay for itself,” he says.

When Codale goes into a new geographic market, they start with a leased facility and stay there until they get a sense of how big the opportunity will be. The move to owned and custom built facilities has happened more recently, taking advantage of the lower cost of building since the recession began.

When Nick Holt returned from his first four-year branch-starting and construction adventure in Logan, Utah, he asked Dale to put him in charge of constructing all the company's other branches. They've got the process down to where once construction is finished, the team can move and stock and open the branch in about three days, he says. “Nobody even has to ask questions, they just know where to go and what to do because they're all basically the same.”

Codale uses the same general contractor for all its construction but hires local workers to build the buildings. “Our general contractor, we use the same one because they know our facilities, but from there we hire all local trades,” Nick says. “We don't want to be the guy bringing in all the outside help. That way we build a better rapport with the cities and our customers.”

The physical layout at each of the branches is consistent, with small adjustments based on the site and local ordinances. “That way any customer, a traveling contractor, knows they can walk into a building and they know it's a Codale, and they know exactly where stuff should be and have the optimum experience,” Nick says.

The warehouses at these new branches are 14,000 square feet with the same 24 foot vertical cube of space. They use eight-foot aisles to allow reticulating forklifts to reach the entire space and do most of their picking with modified electric picking carts pulling trailers.

The Price branch was originally housed in a leased building of roughly the same size as the new building, but the arrangement of the warehouse and the processes they are able to use there make a huge difference, says Meyring, the branch manager. “Our customers swear we're faster now, even though it's the same size warehouse,” he says.

Everything in the warehouse is bar-coded (Codale was among the first in the industry to go entirely to bar-code tracking), but there are no conveyors or carousels or other automated warehousing equipment. Codale does a bustling will-call business at all its locations, and Holt believes carousels would only complicate and slow the process of picking orders.

Having a 25,000 square foot branch in a small town like Price may seem out of place, but it has raised the company's profile throughout the city. The Codale building's training room is the only meeting space in town that can seat 60 people other than the local college, Meyring says.

So that's a brief look at how one company is approaching the same old office-counter-warehouse-parking lot arrangement of an electrical distribution branch. Beyond the basics, it's all about the details.