When the announcement came in 2009 that Wayne-Dalton and Overhead Door Corp. would merge their two companies, dealers had a lot of questions. How would competing Wayne-Dalton and Overhead dealers now interact? What are the direct benefits to dealers? How would this affect the industry? Would plants or distribution centers be closing? How would the day-to-day operations change for both companies’ dealers?
Recently, I had a chance to sit down with Overhead’s President and CEO Dennis Stone. We discussed the two companies’ immediate and long-term plans, and what their dealers – and their competition – can expect in 2010 and beyond.
Stone was most eager to clarify what would not happen: a quick mash-up of the companies. Instead, Stone states, the companies will continue operating as separate entities, and any changes, big or small, will be carefully scrutinized before implementation. “We will keep functioning as-is,” he explains. “I’ve had 20 years in distribution and I know how it works in a localized market. We would lose market share if we blended our dealers. Knowing what I know, leaving them as-is and doing our work on the back end will make everyone more cost competitive.”
Focusing on what Stone calls “back office operations” includes ordering processes, product innovation, plant network configuration and freight analysis, all of which will be carefully examined to find and eventually implement best practices. “We will step back and strategically look at how to get the right products to the right areas at the right cost. Freight is a big deal – it’s going to become a bigger cost in the future, as gas prices increase. So we are studying the logistics of the whole supply chain: where steel comes from, freight lanes, and we’ll do a lot of analysis to find out what’s best. We want to be flexible when market changes happen – not just for today, but for three, four, five, 10 years down the line.”
Being flexible to market shifts will create a stable organization, Stone points out, which will be a huge benefit to their dealers. “Dealers can expect to be a part of a strong company that can weather storms. They are part of a company that can support brands and channels, can out-invest the competition in both innovation and brand marketing. We want to outperform in quality, cost and innovation.”
Not to mention, it was no accident that brought the two companies together. As the CEO notes, Wayne-Dalton was a top choice for partnering and the two companies are working hard and well together to make the merger as seamless as possible for dealers. “It was the right time, the right place and the right people,” Stone says of the deal. “The Wayne-Dalton and Overhead cultures have meshed very well. Every month we worked together, it got better and better and better – it’s truly a collaboration of companies. We will get synergy from innovation, get benefits from learning each other’s best practices and maximize our plant network.”
Speaking of working well with one another, Stone acknowledges the challenge that lies ahead in Wayne-Dalton dealers and Overhead Door dealers now considering themselves partners instead of rivals. But the expectation is that it will be a short-lived process, and that dealers will quickly learn the benefits of this new organization. “We realize we’ll have to manage conflict in the short term,” he says. “Even though they’ve been competitors in the past, now there will be a lot more conversation. I hope in the first year they’ll realize we’ve normalized and they’ll start focusing on their actual competitors.”
Business as usual in 2010 means lots of new products coming down the pipeline – although Stone stays mum on the details, noting that he doesn’t want to tip off the competition. Instead, he says, “Stay tuned. A lot’s going to happen. We’re looking to the future, but we want to take our time and optimize the transaction. We’re focusing on the back office operations, and we’re making sure we don’t disrupt the front end or our dealers. Our new management team has done well, and we can do this merger right.
“Over time, while we work on things like ordering and plant restructuring, it might affect dealers, but it will only improve. Hang in there, see what happens. Hear our words and watch what we do. Give it time, you’ll want to be on this side of the fence and part of this organization versus being with the competition.”
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