Crest Weathers the Storm with Versatility

How badly do you want to be successful? If you wanted to establish a truck equipment distributorship, would you work nights out of your father's two-car garage? And if you saw a slab of concrete on a piece of property in the heart of Pennsylvania's Amish country, would you know for certain that it was the place where your business would prosper?

Norm Ziegler Jr wanted success. And now he has it.

He is president of Crest Truck Equipment Inc, with headquarters in Bowmansville, Pennsylvania, and facilities in suburban Philadelphia and western Pennsylvania that account for 75,000 sq ft of production space, 45 state-of-the-art work bays, and a staff of 120 employees.

It's difficult, perhaps even for Ziegler, to look at Crest now and fully comprehend the modest beginnings.

“We were almost like the big wind that came and went,” Ziegler says.

Ziegler's father, Norm Sr, had roots in truck equipment, first at Allegheny Body Co in Philadelphia and then at Reading Body Works in Reading. Norm got his start at Reading Body, working in the sales and marketing department. When his father decided in 1970 to leave and start a company, Norm went along with him.

For the first 18 months, it was Ziegler & Ziegler, operating out of the garage of his parents' home. His mother, Irene, was the receptionist — based in the unglamorous confines of the basement.

“It was an interesting time,” he says. “That was back in the days when all we did was write checks to pay bills, and we weren't getting any money coming in.”

Norm Jr would come back from a day of sales work and help his father do nighttime installations. They had one mechanic and one painter. They also had a deposit on a piece of property for their planned expansion, but that fell through because of unknown zoning restrictions that clashed with their intended operation.

One Sunday, Norm Sr and Irene were driving south of Reading through the pristine southeastern Pennsylvania landscape when they noticed a large concrete slab that was being used by a contractor to fabricate apartment walls. He'd roll them across to the loading dock, put them on a flatbed, and ship them out.

Norm Sr contacted the contractor and learned that he was finished with the slab. “I can put walls and a roof on it, if you want.” And in 1972, that 20-acre spread became the new home for Ziegler & Ziegler, which immediately was renamed Crest Truck Equipment. When Norm Sr passed away in 1984, Norm purchased it from his estate and has been running it ever since.

It was founded as a distribution and installation center for Reading Body, Western snowplows, dump bodies, and other light- and medium-duty equipment. But it has grown into a full truck-equipment distribution and installation center and now represents literally hundreds of products, specializing in service bodies, dump bodies, snowplows, mobile hydraulic equipment, and cranes.

“We're a growth-oriented company,” says Ziegler, whose sons, Kristopher (product coordinator) and Scott (estimating/engineering), are part of his business. “Sales have grown in double digits for the past nine years. That period has been very good for most everyone in this business, and I'd like to think if you've experienced those eight or nine years, if nothing else your revenues have grown.

“We have tried to position ourselves as a company with specific financial controls to be able to weather those times we might be approaching now. I think everybody is sensing the softening. Last year, we kind of had the trifecta: Interest rates went up a little bit; fuel prices went up a lot, which had a direct impact on a lot of industries we do business with; and the presidential election mellowed everything out.

“We are in a competitive industry. We have a lot of good competitors who challenge us every day, and we continue to stick to our business philosophy: The Best That We Can Do. The best products. The best installations. It seems to work out pretty well for us.”

Tough Times

Ziegler believes Crest is positioned to handle an economic downturn because of its versatility. If the truck-dealer market softens, for example, then Crest can place more emphasis on the municipal and public-utility markets.

“There is less impact on them when things slow down because they have the public trust and they must provide electricity and natural gas,” he says, “and the municipalities have to continue to keep the roads clear and provide different services for their residents. Those insulate you a little bit. I don't know that they insulate you fully, but they do a little bit. That's pretty much our philosophy.”

To get a better feel for how well his company was utilizing its assets and serving its market, Ziegler last year hired Ken Mikesell of the Phoenix-based Operations Management Consultants. Mikesell created 10 separate businesses, one for each of Crest's product lines. Then he analyzed each line's return on the investment, determining which were most valuable to the company.

Ziegler's decision to hire a consultant is not a widespread practice in this industry, but he says he would recommend it to anyone who has unanswered questions or needs verification.

“It's not like the consultant makes decisions for you,” Ziegler says, “but he can sometimes tell you things you already knew, he can concur, and he can bring up new things you weren't aware of or weren't thinking about. I believe the utilization of a well-placed consultant is a valuable tool and should be used as any other tool. What it comes down to is that he'll look at your business more scientifically and apply mathematics to almost every part of your business.”

In essence, Crest was able to rededicate itself to its core business and identify the best products, distributors, and companies that meet its business objectives.

The five entities of Crest's core business: truck dealers, because “our business was founded on good relationships with the professional dealers in our area and we still need those to survive”; municipal businesses that have been added to the sales and marketing base; leasing companies; public utilities; and construction trades and contractors.

“We have taken expeditions into new types of products and services,” Ziegler says. “Some of those expeditions have worked out, some have not worked out. And we have continually come back to those five primary marketing bases.”

Crest's primary product line remains Reading Body, but a long list also includes Iowa Mold Tooling Co Inc, National Crane Corp, Crysteel Dump Bodies, Western snowplows, and Adrian van interiors.

“We've taken those products and worked with those products and manufacturers, and we can go to our marketing bases with a good package,” Ziegler says. “We're working very hard to develop purchasing relationships. By that I mean purchasing agreements. I don't want to necessarily call them strategic alliances, because I believe that term is overused.

These are agreements where we will provide you with the best possible goods and services we can in return for your commitment to view us as your No. 1 vendor of those products.”

Multiple-Year Contract

For example, as Ziegler detailed at a session of the National Truck Equipment Association Convention last year, Crest has a five-year agreement with GPU Energy and Reading Body in which Crest provides GPU with all of its nonaerial, truck-mounted equipment and Reading Body provides the truck bodies. One of the advantages for Crest is that it has reduced the peaks and valleys in its production schedule, providing a steady stream of orders.

Ziegler says Crest has a half-dozen “significant” purchasing agreements in public utilities, construction, and rentals. He describes them as “a lot like receiving a report card every six months.” They are not legal documents, because the partnerships contain escape hatches. Any of the parties can back out if the results are adverse to their operations.

“Those things are wrapped around one phrase: ‘Say what you do and do what you say,’” he says. “That's what it comes down to. But isn't that pretty much what we have in any relationship?

“There's no rocket science in this industry — it's good products, good service, good reputation, serving your customers the best you can. Trying to find a new mousetrap in this industry is pretty difficult. Dump bodies, service bodies, stake bodies, conversion hoists, van interiors, snowplows — all the products we handle seem to be functionally able to do their job. So to try to add value to those products is more nebulous. You have to like the people you buy from. These types of things become a little more important today.”

To further solidify its position in the wake of the Mikesell's recommendations, Crest finalized two actions within a one-week span in July: the purchase of certain assets of LW Volz in Abington, Pennsylvania, a suburb of Philadelphia; and the sale to DUECO Inc of assets of a division that was involved in the selling, servicing, leasing, and supplying of aerial lift equipment and digger derricks as manufactured by Terex Telelect Inc and other manufacturers for use in New York, Pennsylvania, New Jersey, and Delaware.

“Both actions were deemed critical to the continued success of this business, no question about it,” Ziegler says. “Dedicating ourselves to the core businesses involved divesting of the branch.”

The addition of the Abington facility came seven years after Crest established a second branch in Seneca, about halfway between Pittsburgh and Erie, by purchasing certain assets of a truck-equipment facility that specialized in Iowa Mold Tooling products.

“It gives us the ability to directly service the metropolitan Philadelphia market, just like Seneca gives us Pittsburgh and Erie and western New York,” Ziegler says. “There was a lot of synergy between Abington and Crest. We were able to mesh the product lines, which gives the Abington location additional strength. It's a smaller version of Bowmansville. They do exactly the same type of work we do. They're a production distributor.

“We also noticed that they have very good contact with the market from the parts standpoint. They're a very viable source for parts. They have a fantastic reputation in the area they serve. It was a really good move for us.”

A Smooth Transition

Ziegler says one of the pleasant surprises was the relatively seamless transition of the facility to Crest's way of doing business. Every employee in Abington decided to stay.

“My hat really has to go off to them,” he says. “They really merged into our company very well. And my hat has to go off to the people at Crest who were part of the transition team. When you work under a certain philosophy for a number of years and all of a sudden there's change, the dynamics are there for some conflict. And we were able to avoid most of that.”

Ziegler says Crest will add some unspecified product lines in Abington and also might expand the production facilities, but there is no time frame yet.

One of the positives from the acquisition is that it now gives Crest the ability to execute 100,000 man-hours a year out of its three facilities.

He believes those hours go a long way, because Crest can handle one unit for an individual contractor or 200 units for a large municipality or public utility.

“That's one of the things that really differentiates us from a lot of companies,” he says. “We have the ability to do the job shop-type work and also the production shop-type work.

“We've been able to do it successfully. For certain states, certain public utilities, certain railroads, we have the ability to produce large quantities of units and make changes on the fly while the units are in process, if the customer decides to add or modify something.”

Efficient Management

Ziegler believes that one of the main reasons is the way the shops are run. In Crest's five departments, there are five “lead men” who report to the production control manager. Most of his hours are spent on the phone or on the computer, arranging production schedules and initializing work orders.

“We put an awful lot of responsibility on our lead men,” he says. “They can make hiring recommendations. They are problem solvers. We've given them a lot of autonomy. They are true company men. They work the time it takes to get the job done.

“Really, we rest in their hands the future of the company, and along with that, the quality. I stay in direct contact with them and meet with them on a monthly basis. We discuss all issues and generally keep things moving in a very positive direction.”

Ray Boone's plate is always full. As vice-president in charge of engineering, he directs a staff of three full-time engineers, orchestrating daily tasks including quotations, CAD drawings, work-order analysis, and hydraulic schematics.

On Boone's desk is a project for a major railroad that involves a large quantity of truck-mounted cranes requiring a special body with rail gear and outriggers. Total value: $4.5 million.

“We have to engineer it before we quote it, so we do both at the same time,” he says. “It's a significant project, a large order for us … a large order for anyone. You have to do it enough to get a handle on what the costs really are and still be competitive. So we kind of function as sales and engineering. Along with doing drawings for our own quoting purposes, this will be given to the customer.”

He holds up a computerized weight analysis of axle loading and ruminates about the days when it was all done by hand.

“It may have taken two hours to do the first time, and every time you changed an item, it took another 20 minutes,” he says. “Now, with a keystroke, I can do the weight analysis in 15 minutes. If there's a problem, I can move a crane aft or forward with a keystroke. The computer does it all for you.”

He produces a sheet of calculations for work order No. 2242. The National 446A rear-mounted crane weighs 7,400 lb and is set 204" from the front axle, so 7,258 lb go to the rear axle and 142 to the front.

“We know up front that we have 2,346 lb left on the front-axle capacity and 14,962 left on the rear-axle capacity, which is good,” he says. “The vehicle weight is 32% on the front and 68% on the rear, and that's good. So this is a good truck. Now, it may not have started out like that. We may have moved some things around.”

Says Ziegler, “(Computer technology has) changed the way we do business. We've been able to prevent some major issues from developing.”

NTEA Software

Both of them marvel at the fact that the software is available for $25 from the National Truck Equipment Association, yet not all members use it.

“Fortunately, we've never had any problem with a truck being heavy in the front end,” Boone says. “A lot of people have. It's happened frequently where there's an 11,000-lb front axle and they put a front winch and crane on the cab and all of a sudden, you've got 13,000-lb axle loading. What do you do? Take equipment off or change the axle? That gets expensive.

“We offer a lot to customers for a company our size. We are fully CAD-operated. We have AutoCAD 2000, the latest out there. A lot of companies our size don't even employ a full-time CAD operator.”

Ziegler describes the engineering department as “second to none.”

“It's not just that we want to be a professional company — it's because our customers demand that level of service,” he says. “Customers want sales drawings. They want to conceptually see it.”

Jim Moorehead also has a full plate. He's Crest's sales manager, guiding a force of 10 outside sales people.

“Our sales people tend to firmly plant their feet in the customer's shoes,” he says. “They see everything from the customer's point of view. We're not the plaid-jacket, used-car salesman type. You make sales through personal relationships. In spite of the Internet and all the other things going on, that's one of our strengths. We get a sprinkling of sales from our web site, but that trust with your customer is very important. They have to believe in you.

“Sales charts tell you a sales person is successful. But what are you doing to foster a relationship? If your customer is not being paid attention to, that's when mistakes are made and confidence is broken.” (Please turn page)

Crest's sales philosophy is to use product-specific people as well as territorial people.

“When you started a truck-equipment business 25 or 30 years ago, you had one guy who sold all your product lines,” Ziegler says. “Now it's getting to the point where, with specialization within the product lines, we're finding it's necessary to specialize. We take the best salesperson and match him with the best products and give him the best customer base that he's most comfortable with.”

The challenge is to deal with an unsettled economy. The signals are mixed. The first time the Federal Reserve Board cuts interest rates, the Dow Jones jumps dramatically. The next time it cuts rates, nothing. The economic growth in the final quarter of 2000 is announced as the slowest in five years (1.4%), yet one analyst says that while the manufacturing sector is in “recession” — including a 24.4% drop in the production of new cars and trucks — the rest of the economy is “holding up reasonably well.”

Moorehead jokes that there are some nights when he hopes his customers aren't watching the evening news.

“I'd like to see us maintain the sales level we've had,” he says. “We've talked to our sales people about how it's time for some of them to go back to their roots and figure out how they got where they're at, what made them successful.

“But I'm optimistic. I've got to be the cheerleader. That's my job. I walk in the door with a smile on my face and a pocket full of personality. I'm hoping at 5 o'clock it's still there. You just have to stay optimistic.”

Crest produces between 120 and 150 trucks a month company wide, dividing its facilities into five areas: hydraulics/specialties, standards, dump bodies, paint, and fabrication.

When Crest first started, it dealt exclusively with light trucks (7,000-8,000 GVW). Now it goes all the way up to 80,000 GVW.

Chassis Pool

The company has a long-standing relationship with Chevrolet and GMC as a high-volume chassis pool location, stocking chassis cabs, pickup trucks, and cargo vans.

“It's been a big benefit to us and a big benefit to our customers,” Ziegler says. “With our wide range of equipment, we do pretty much anything they need us to do.”

Crest's quality program is stage-based, with roots in the military and in the railroad industry. The company relies on the mechanic to ensure that the bolts are tight and the wiring is complete.

“We have been fortunate in that our redo work has been very minimal,” Ziegler says. “Our guys take pride in the work they do. There are so many intricacies in the production of truck equipment. It's not possible to have someone walking around every day, checking everything. So you have to put the reliance somewhere. We put it in the mechanic. And on top of them, we have the lead men to make sure the job's done right.”

Crest utilizes a state-of-the-art, environmentally-friendly Electro-Static paint process, and does multi-tone and decal applications in-house.

Value of Employees

Ziegler believes that in the end, it all comes down to the employees. Without employees who feel appreciated and are motivated to take the company to the next level, Crest is like a truck with no engine.

Ziegler developed an employee relations committee that meets monthly, with department representatives and management personnel hashing out issues of concern.

“I learned a few years back that even though I think things are symbiotic within the company, maybe my read on the situation is not always accurate,” he says. “We have increased communication within the company tremendously.

“I hope our employees realize how hard we want to work with them and how valuable they are. Everybody's facing labor issues today. The first issue you have to come to grips with is this: You have to keep the employees you have. Once you've done that, you have a solid base.

“Everybody has a job and everybody's asked to do it. That's my philosophy in leadership: You're hired for Crest. You have a responsibility. I expect you to live up to your responsibility. And my responsibilities are as deep as yours are.”

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