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Sealing the dealAn Activant Customer News Article
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By Kimberly Griffiths Associate Editor Industrial Distribution, February 2006 Not every company management team, when it asks its employees' opinions, is ready to deal with the responses. Many companies simply take the responses, read only what they want to read out of them, and then go about doing exactly what they'd been doing all along. Not so for Gallagher Fluid Seals. "We conducted our first employee opinion survey two years ago," says Joe Gallagher, president of the King of Prussia, Pa.-based fluid seals distributorship. "It included 75 questions as well as fill-in spaces for comments and the like. We got some really good, critical feedback." In response to a concern about communication throughout the company regarding direction and management's strategies, Gallagher put together a president's council, which includes a representative from each department, that meets monthly. Employees in each department participate on a rotating basis. "The council is a forum to discuss the company issues and direction, not petty complaints and personal issues, and it has worked out really well," he adds. Information obtained in each meeting is published on the corporate intranet, which has become the essential tool in information dissemination. Documents are posted immediately following the meeting for all to comment and act on. Gallagher says the council has improved communication, and according to a second survey, from which he just received the responses, they've made tremendous strides. "A lot of people would be afraid to open themselves and their company like that, and then to deal with what feedback they get, but it's been a positive experience," he says. From Maine to the Carolinas"My father started the business in 1956 as Walter B. Gallagher Co., a distributor of O-rings, gaskets and packings," says Gallagher. "He worked for a seal manufacturer before starting the company, and I think, took on the distributorship to control his own destiny. I give him a lot of credit for doing it, especially as myself and my siblings were so young at the time." The company was based in the Philadelphia area, and also covered territory in southern New Jersey and Delaware. In 1974, a supplier offered the distributorship one of its branch offices in northern New Jersey, allowing for a territory expansion to the entire state and into New York. In 1984, Gallagher acquired another company, this one in New Hampshire, adding New England to its territory. In 1988, the company name changed to its current moniker to better represent itself as a seals distributor. Says Gallagher, "Most of the major suppliers we had then are our major suppliers now, too. They may have acquired others, or been acquired, but our seals product lines are all basically the same." About 90 percent of Gallagher's customers are OEMs, and the sales and engineering staffs work closely with customers to assist them in their product selections. The company considers itself a seals specialist, and the salespeople do their best to be sure that the right product is used in the right application, including any budgetary concerns. "Because we strive to be specified in an engineer's drawings, our sales cycle is long, and can sometimes take 18 months from initial design and conversation to order and production," says Gallagher. "We also offer vendor-managed inventory, kitting and packaging, and bar coding to our customers." Gallagher's Web site also is a wealth of information for customers. A stock check ensures product availability; a shopping cart allows for online purchases; and an e-newsletter keeps customers updated on the distributorship's suppliers, products and applications. "We do have some sales through the e-commerce site, but it's pretty minimal," says Gallagher. "The site itself is more informational, and is designed more to drive people to call us for their sealing applications." Gallagher employs an IT-specific person who reports to him, and acknowledges that, to grow and stay competitive, investing in technology is necessary. "T" for trustworthyEd Rizzardi is vice president of Parco, a manufacturer of rubber O-rings, seals, custom-shaped pieces and general-purpose products headquartered in Ontario, Calif. Parco has worked with Gallagher for more than 15 years. "We served two distributors in the Philadelphia area, and though Gallagher was the smaller one, we appreciated all the support we received from them," says Rizzardi. Gallagher eventually bought the competing, and larger, distributorship's seals business, and the relationship between Gallagher and Parco shifted dramatically. "Of course, there was some concern over how the relationship would change now that they were our largest distributor in the area," says Rizzardi. "But it turned out great, and both companies work really well together. It's been about 15 years, and the relationship is still strong." Rizzardi credits Gallagher's professional conduct, solid sales staff and volume of business, as well as trustworthiness, as the basis behind that good relationship. Trust, in fact, is a virtue Rizzardi mentions several times when discussing Gallagher Fluid Seals. "Our relationship will continue to grow, I know, because of that trust," emphasizes Rizzardi. "We'll not do anything to undermine the other, and continue to funnel new business to each other." A golden anniversaryGallagher Fluid Seals recently celebrated its 50th anniversary, a feat that Gallagher and his father, Walter, both recognize as a major milestone. "Not a lot of companies can make it that long," says Gallagher, who has been with the company for 33 years and president for 20 years. "We wouldn't have been able to do it without our employees, and for them, we had a celebration in October last year." Walter Gallagher, who is now 93, spoke at the dinner, and told those assembled that he is proud of the company and its growth, and added how appreciative he is of everyone and their hard work. "I think the philosophy of the second generation, when coming in to the business, is to not let it fail," says Gallagher. "My father made huge sacrifices because of the business, and I simply can't afford to have it fail. There's a lot of pressure when you have the same name, but along those lines, my father provided me with an opportunity, and didn't force me to choose this business. I had to work twice as hard to prove myself, and earned the respect of people through all the positions I held here." A third-generation member of the Gallagher family is now working at the company, too. Gallagher's nephew, Christopher, is working in the customer service department, and according to Gallagher, is showing promise for the future and a solid commitment to the company. Gallagher Fluid Seals has blossomed under the second generation though, and boasts a strong showing in 2005, with sales of $14 million. "We grew 8 percent on our top line, so last year was very good," comments Gallagher. Gallagher though, is not interested in adding other product lines to expand the business, simply because the company excels in its niche in seals. "If I could find a product line to complement us, I would consider it, but as I haven't yet, we're doing fine as we are," he says. "Our most successful customers are those that we sell several products to anyway. "Our goal is to remain independent, and continue our growth, both organically and through acquisitions," says Gallagher. Company Snapshot
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