The complete history of Heco Slings As told by Thomas G. Dolan of Wire Rope News & Sling Technology
Sometimes things don't work out as you planned -- but they still work out anyway.
This has pretty much been the story of Harvey Howlett, Jr., who owns Heco Slings Corporation, Norfolk, VA. After attending the University of Virginia, Howlett had planned to become a doctor; but, as he candidly admits, "I didn't have the grades". So, instead, he went to work for his dad, Harvey Howlett, Sr. At that time things weren't working out for his dad either. He ran the Howlett Elevator Company, which had a contract to do all of the elevators and overhead doors for NASA at the Langley Research Center. At the time NASA planned to incorporate the testing of wire rope slings into the contract. So Howlett, Sr. purchased the testing equipment, NASA didn't follow through with its promise, and Howlett, Sr. was stuck with a wire rope machine he couldn't use. It was about this time that his son was thinking about a career other than medicine, so, recalls Howlett, Jr., "We decided to form a wire rope business as a spin-off from the elevator company." But this didn't quite work out as planned either, Howlett, Sr. passed away in 1978. His son kept the elevator business going for about ten years, but then closed it down because the wire rope business was the more viable. This is why that company is called Heco Slings Corporation, the "Heco" standing for the now obsolete Howlett Elevator Company.
The transition from medicine to wire rope is a big one, especially since Howlett, Jr. knew nothing about the latter. But he corrected this situation by going to work for a rigger in New Orleans and learning how to splice wire rope and fabricate slings. In 1974, he started his present business. His dad provided the financing, but stayed with the elevator company. Howlett Jr. had a secretary who did the billing. But he did everything else. "I was the inside sales guy, the guy in the shop, and the delivery guy," Howlett says.
He started in a renovated 4,000 sq. ft. building on the waterfront. The person he rented the building from had a tugboat company and a supply house. This was Howlett's first customer. But he gradually expanded. Around 1980 he built his own 6,000 sq. ft. building in the Norfolk Industrial Park. In the late 80's he added another 8,000 square feet. In 1997 he added 6,000 square feet more. He's feeling the need for more space, but there is no more space around him to grow into. But rather than move to a new location, he's thinking of leasing additional storage space elsewhere.
Meanwhile, his work force was
expanding. The first person he hired was an outside salesman. He's
grown slowly, usually adding just one person at a time. Now he has 14
employees, three outside salespeople and five in the shop. Even with
the economy down business has remained steady.
The reason, Howlett recognizes, is that the majority of his business now goes, either directly or indirectly, to the U.S. Navy. "We've seen a significant increase in business after the September 11 terrorist attacks," he says. "There's been a big mobilization effort. With Norfolk being one of the Navy's largest ports, we're shielded from the recession." Howlett says "We do a tremendous amount of business on the Navy's new lines of carriers and submarines." He also sells to other branches of the military. "The Army transportation center in Williamsburg also gives us a tremendous amount of business," he says. "All of their orders are $25,000 and up."
There are also four to five shipyards in the area whose main customer is also the Navy. These are big customers of Howlett as well. Virginia International Terminals, which has its biggest terminal in Norfolk, but others in Portsmouth and Newport News, are, Howlett says, constantly expanding and putting in new container cranes, thus "opening up new business for us." There is also a good construction activity in the area, which also brings him business. Howlett covers about a 100 mile radius from Norfolk. About 25% of his business goes directly to the ,government, 30-40% to the shipyards and terminals with most of that going indirectly to the government, and most of the rest to construction. The business started out selling to tug boats, pushing cables for towing on inland water, and towing bridles for ocean work. Howlett still sells to this market, but it makes up only about 5% of his sales.
When asked what it's like having the government as his primary customer, Howlett replies that there are good points and bad. "The downsides are that their specifications are often antiquated, and the documentation you have to go through to get paid is a negative," he says. "And, until recently, it was very difficult to get paid on time. We'd have to wait 60, 90 to 120 days. And if you sold to a ship and it sailed, it was next to impossible to get paid." Howlett adds that the payment problem has largely been solved with the government recently switching from purchase orders to credit cards for payment.
The pluses, Howlett says, are the large steady orders, and the fact the government is not likely to go out of business. "Having the Navy here is a very stabilizing force. I know talking to riggers in other parts of the country, especially, that they go through up and down cycles even in nonrecessionary times. And even in a recession, like now, government contracts act as a buffer. Obviously there are many more good points than bad points or I wouldn't be selling to them."
Howlett adds that the government has stringent quality control standards, but he welcomes these, rather than looking at them as a burden. "We're strictly a specialty house, and simply want to be the best in what we do," he says.
The shipyards also keep him on his toes, in terms of quality assurance. About once a year a different shipyard, working through the South Tidewater Association Of Ship Repairs, comes through to do a quality assurance audit. "They go through our quality assurance manual and then make sure that what we do actually follows our written procedures," Howlett says. "It's not ISO, but almost like it."
The company has capabilities to fabricate up to 1 1/2 inch diameter wire rope slings, makes its own chain slings, and stocks and sells nylon and round slings, and stocks all of the basic wire rope products, and related hardware such as shackles, clips, and winches, but stays away from any suggestion of being a supply house. "I don't want our salesmen to have to know about hundreds of different products, just to be expert in the ones we carry," Howlett says. The specialty focus pays off in a number of little niches for the company. For instance, Northrup Grumman chose Heco as one of only one or two vendors on the east coast to be qualified to pour the hot zinc in fabricating the spelter socket assemblies Grumman uses in making its ballistic missiles.
The specialty focus also allows Howlett to differentiate himself from his competition. Not long ago there were four rigging shops in the area. But the two relatively new ones closed their doors. "Apparently they felt they couldn't make a profit, so went by the wayside," Howlett says. "The pie was not big enough for the four of us."
Howlett characterizes his one remaining competitor as "having been in the area a lot longer than we have, some 20-30 years. They originally did specialty rigging but then progressed into a standard rigging shop as well as a mill supply house, and are now part of a big conglomerate that owns many rigging shops. I think their broadbased approach actually helps us, and in the area that we work in I think we're catching up."
Being the smallest kid on the block means that one way Howlett has to compete is through offering super service. "I guess everybody talks about service, but you have to offer it now or you can't make it. The day doesn't go by but we get 10-12 orders that have to be ready that day," Howlett says. "We've always told our customers that, at whatever point you place an order, you can have it within 24 hours, if you really need it. And that includes nights and weekends!"
What only increases the pressure, Howlett says, and what represents the biggest change he's noted over the years, is "before, everybody would keep a backup, but now they don't. Whenever they run out of something, they want a replacement right away, and we have to give it to them."
How does Howlett cope with this pressure?
One way is by having as many items as prepared as possible. "We keep a spare 400 feet of wire rope, in certain sizes and cut to the lengths we know the terminals require. This is particularly important with cranes. When one of them is down it can cost $35,000 an hour. So if we get a call, even on a night or weekend, we can just throw it on a truck and take it there." The three outside salesmen, incidently, drive pickups as their company vehicles, so that provides an added flexibility in getting material to the customers quickly.
Even though a number of products can be prepared ahead of time, some, especially slings, cannot - at least not all of the time. But even here, Howlett can get a little ahead. "We do sales histories and tracking of our customers, and if we see one who buys round polyester slings of a certain size on a periodic basis, we'll have some of these ready to go."
In addition, Howlett says, "Everybody here wears many hats. Most people here, including the salesmen, are capable of cutting wire rope. I have my own work uniform in the office, and, if necessary, I'll go out and work in the shop myself."
With all of these preparations, plus the long experience of the employees, the company can offer 24-hour, 7-day a week service. But, in fact, at this point, as opposed to the early years of the company, now there are very few occasions in which anyone has to work evenings or weekends.
What makes it possible are good, loyal employees, who can work quickly and efficiently. "I have a profit sharing plan, into which all of the money that goes into it comes from the company," Howlett says. "So everybody knows that if they do it right the first time, the profit goes to them. I feel I provide some great benefits. The bottom line is that if somebody comes to work here, he or she usually stays here. And, if they stay, they follow the example of everybody else and become very conscientious. And we're still small enough so every employee is able to be treated like family. There's a very open line of communication here and everybody here knows my door is always open to them."
Another factor which allows Howlett to stay on top of his game is that some of the shipyards give blanket orders from one up to three years, provided the price remains the same. The customer is thus guaranteed a steady, as opposed to changing price, and Howlett has many of his orders locked in ahead of time. He reports he has success in eliciting the support of his suppliers, who are the ones who could actually be hurt by this arrangement. One modification is an escalation clause, which means that, if the supplier says, after a year, prices will go up 3-5%, this clause will be a part of the contract with the shipyard.
In making this program, as well as his business as a whole, work so well, Howlett credits good two-way, give- and-take relationships with his suppliers. These include Bridon American Manufacturing, the Crosby Group, Cooper Tools, and Liftex. "I stress that there should be a two-way street in terms of cooperation," Howlett says. "I say that if we're going to push your products, we expect your support."
Howlett, 59, has been married to his wife, Trish, for 19 years, and they have two daughters, Kelsey 16 and Alexis 13. He enjoys golf and deep sea fishing, having caught white and blue marlins, as well as yellow fin tunas, and is still looking forward to catching a sailfish. "I used to be a workaholic, but, after having kids, my priorities have changed," he says. "Being older when I had children, my friends told me to enjoy them, because they grow up quickly. So now I still work hard, but I spend a lot of time with my family." In terms of his business, he says, "I've had a pretty good ride. I started out small, with small expectations, and took the time to grow slowly. It's taken 27 years to get here, and it's a good place. Things didn't work out as I once planned, but they've worked out for the best."