Uni-Scoop Magazine

Business Information Group

 

September, 2012

 

Title: Success across the ages

Subtitle: Three Uni-Select dealers that have been in business for more than 50 years, discuss their companies’ long-term success.

 

Management experts often tell you how rare it is for a family business to succeed into the next generation. Heightened pressures, increased competition, and an ever-changing business environment make it hard to develop a winning formula and keep it up to date. We recently talked to three long-time Uni-Select retailers who agreed to share their secrets about how they have prospered for so long.

 

“It’s not easy,” admits Francois Dulac, who runs M&M Nord Ouest Inc. along with his brother Jean Dulac. “The auto parts business is different than when I started 25 years ago. We had to make considerable changes to keep up with the times. For example sales to car dealerships are increasing and sales to garages aren’t doing as well so we had to adjust.” M&M Nord Ouest, founded 75 years ago, was bought by Francois’s grand-father Joseph-Philorum Dulac in the 1940s and has been in the family since then. The company has passed through Joseph’s kids’ (Jean-Louis and Michel Dulac) hands and is now in its third generation of family ownership.

 

Keeping up with industry trends

In short, Francois Dulac, is in a good position to comment on changing times. “Today there are so many car and truck models that garages need a lot of equipment to service the general public, which many can’t afford,” says Jean Dulac. “As a result, many former garage customers have been gradually migrating to dealerships for service and we changed our focus to reflect that trend.”

 

The Dulac family also consistently adjusts M&M Nord Ouest’s sales mix at each of its three locales (Amos, Malartic and Radisson) to adjust for demand shifts. For example improved product quality in many categories has been great for clients, but trimmed repeat business in many areas.

Spark plugs for example last longer than they once did, as do exhaust components (many mufflers are now made out of stainless steel). In addition, many cars, (such as Dulac’s father new BMW) now only need oil changes every 20,000 or so kilometres (instead of 5,000 or so kilometres a few decades ago).

 

As if that wasn’t enough, increasing competition from tire distributors caused Dulac to abandon that line too. To compensate, M&M Nord Ouest’s has taken on new products such as tooling, uniforms and soldering equipment, and has increased inventories of faster-moving, higher demand parts such as brake products.

 

A major key: commitment by the original owner

The three Uni-Select outlets all got off to a good start, led by founders with a vision, and the determination to implement it. This surely accounts for a considerable part of MAS Chibougamau Inc.’s long-term success says Denise Leclerc, one of its current co-managers. “At the start it was work, work, work,” says Leclerc of the outlet, which was founded in 1962 by Robert Laporte (who is now 78 and still active in the business). “Robert set a tremendous example that lives on today, even though he now only comes in one week a month.”

 

According to Leclerc, Laporte, who is also founding member of Uni-Select, made tremendous sacrifices when he started the business, working nights and weekends as a mechanic help support the distribution operation. Those tough times paid off greatly, says Leclerc, a former public sector financial manager, who joined the team in 1976. The company now operates a 20,000 square feet locale which stocks 25,000 SKUs including 2,000 auto part items. “(Laporte) is very conservative in his outlook,” says Leclerc. “We have thus always grown slowly but surely, and never taken undue risks which could jeopardize the future.”

 

Looking after customers

Leclerc says that constant adaptation is particularly crucial to MAS Chibougamau’s long-term success, as the company sells to a variety of cyclical industries – pulp & paper, mining and hydro-electricity, - which go through significant peaks and troughs. “We have to always be there for our customers and to respond to their slightest needs,” says Leclerc. “They really are our partners, because if they succeed, we succeed – but the reverse is also true.”

 

One tip Leclerc picked up early was to never panic when a client becomes upset or mad. “When customers give me heck they are doing me a big favour, by airing out their grievances, which gives us a chance to adjust,” says Leclerc. “This is far preferable to us than the alternative – that the customer quietly calls the competition with us never even knowing that there was a problem.”

 

Partnering with family, employees, customers and suppliers

According to Denis Fontaine, who along with his brother Michel and sister Lucille, runs Pieces D’Auto Fontaine, another survivability key is the ability to partner effectively with other family members active in the business, as well as with employees, customers and suppliers.

 

The company was founded by their father Omer Fontaine in 1962 (it is celebrating its 50th anniversary this year), who managed to get all three siblings interested in the business, a fortunate, but sometimes risky move, as internecine rivalry is often one of the key causes of family business failures. The move seems to have paid off for the St-Julie-based firm which currently employs 44 people who sell car and truck parts, and paint supplies.

 

According to Denis Fontaine, the family avoids tension among the kids by clearly delineating each of their areas of responsibility. Michel handles the paint department, Lucille takes care of purchases and Denis handles sales. Denis’s wife Joanne, who is also active in the company, handles accounts receivables.  And although the kids never hesitate to consult one another, they are mindful of not stepping on each other’s turf.

 

Denis Fontaine also notes the importance of partnering with customers as a major success key. “Clients today expect you to have the parts they need – right away,” says Fontaine. “And if they can’t get it immediately, you had better give them visibility about when they can.” To accommodate those demands, Pieces D’Auto Fontaine has thus boosted its inventory to more than 30,000 SKUs, up six-fold from just 6,000 in 1978.

 

All three Uni-Select dealers also agree that partnering with other industry players through their membership in the group has been a major success factor. Fontaine for example notes the functionality of the organization’s SAP/Carrus computer system, which greatly facilitates inventory control/tracking and also compliments Uni-Select’s extensive training initiatives which go a long way toward building brand loyalty among customers. Pieces D’Auto Fontaine also participates in several banner programs such as Uni-Pro, Specialist, Pro-Color, Color Plus and Auto-Parts Plus.

 

A continuing long term vision

That said, by far the most common success criteria among Uni-Select members that have done well over a significant period of time has been a long-term vision and ongoing commitment to the business. For example according to Denis Fontaine, his grandfather Omer, who is now 80 years old continues to follow developments at Pieces D’Auto Fontaine despite his age. In addition, the entire Fontaine family remains focused not on how much cash they can squeeze out of their next customer – but how they can maintain business stability, so the company will still be around if one day any of Omer’s grand-children ever want to work their too. 

 

Jean Dulac agrees that thinking about the next generation helps to ensure stability. “While none of our kids are involved in M&M Nord Ouest, yet because they are all too young, we want them to have that opportunity,” says Dulac. “For that to happen we have to be around when they get older. That in turn means that we have to think strategically. That alone may be the biggest reason that we have been doing so well.”

 

Peter@peterdiekmeyer.com

 

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