Ahead of the puck

Marc Schupan, CEO of Schupan & Sons, and his three divisional presidents, tell Martin Ashcroft about the partnership culture that helps the business by helping the customer. ÔÇ£Once we have an opportunity to do business, a mutually beneficial relationship, along with loyalty grows,ÔÇØ says Marc Schupan.┬á  ÔÇ£We try to take a long term look at things,ÔÇØ he says. ÔÇ£You canÔÇÖt necessarily make a profit on everything you do. There has to be some balance. It really comes down to treating customers as we would wish to be treated ourselves.ÔÇØ People say it all the time, he admits, but Schupan & Sons really does practice that philosophy. ÔÇ£ItÔÇÖs our culture throughout our organization.ÔÇØ  Schupan talks about growth and new business in terms of opportunities for partnerships. ÔÇ£We want partnerships, not adversarial relationshipsÔÇöthis week we win, next week you win,ÔÇØ he says. ÔÇ£ItÔÇÖs really important to understand the customerÔÇÖs needs. We want to make sure that we are changing what we do to meet their needs, not trying to get them to change because this is all we can do.ÔÇØ MarcÔÇÖs father started the company in Kalamazoo, Michigan in 1968 as a scrap metal recycling business, but its growth has seen it develop into three distinct divisions, Schupan Industrial Recycling (the original business), Schupan Aluminum Sales, and Schupan Recycling, set up in 1985 to process and market used beverage containers. While the nature of operations differs widely between the divisions, the philosophy remains the sameÔÇöhelp the customer to be better, and more business will follow. ÔÇ£We want to look at every aspect of what our customers do with their scrap,ÔÇØ says Marc Rose, president of Schupan Industrial Recycling. ÔÇ£WeÔÇÖll come up with the safest and most efficient way to handle it, and the best way to handle it from an environmental standpoint.ÔÇØ The more scrap a customer produces, the more work there is for Schupan, but thatÔÇÖs a short sighted a way of looking at it, as far as Rose is concerned. Helping the customer be successful is best for all in the long run. ÔÇ£If we can help to make them better, they will produce more parts and that will produce more scrap, rather than producing scrap because they are inefficient. WeÔÇÖre real big on environmental compliance, waste audits, anything we can do thatÔÇÖs going to help them.ÔÇØ Inefficient companies, as we all know, do not stay in business very long these days.  Tom Emmerich, president of the beverage container division Schupan Recycling, echoes that. ÔÇ£Everything we do is based on partnership. We like to view our customers as our partners. The companies we sell our scrap to we view as partners. We want to do business with companies that think like we do. All of our relationships are predicated on trust. If we say weÔÇÖre going to do something, weÔÇÖll do it, whether youÔÇÖre a customer or a supplier, and that philosophy has been huge in Schupan & SonsÔÇÖ overall success, not just Schupan Recycling.ÔÇØ Partnership pays off both ways in the marketplace, says Emmerich. ÔÇ£We have consistent markets that we work with on a regular basis to provide what they need as well as providing us with the best marketing opportunities. Do we shop around for the best price all the time? No, because thatÔÇÖs where the partnership comes into play. But we need to have competitive enough pricing so we can pay our customers what they need and deserve for their scrap.ÔÇØ Over time, he says, if you demonstrate loyalty to a vendor or an end market, they will step to the plate when you need them to. ÔÇ£We have multiple vendors but we donÔÇÖt have large numbers of them, and we donÔÇÖt tend to play one off against another.ÔÇØ  When it comes to the direction of the business, Marc Schupan likes to use an analogy derived from legendary hockey player Wayne Gretzky, who is quoted as saying, ÔÇ£I donÔÇÖt go where the puck is; I go where itÔÇÖs going to be.ÔÇØ Future opportunities are never far from his mind. ÔÇ£WeÔÇÖre in a world where things change so quickly,ÔÇØ he says. ÔÇ£I donÔÇÖt want to be the guy selling buggy whips, even though I have 100 percent of the market.ÔÇØ  Beverage container recycling owes its business model to the fact that Michigan is one of only eleven states to have container deposit legislation. ItÔÇÖs a particularly successful recycling initiative in Michigan because it is the only state that charges a ten cent deposit (others charge five cents for the majority of containers). ÔÇ£That helps to increase the rate of return,ÔÇØ says Emmerich. ÔÇ£For aluminum and PET itÔÇÖs around 95 percent. Glass is around 80 percent. It makes for a viable business.ÔÇØ But there is a limit to that business, because none of the states surrounding Michigan charge deposits (the nearest state is Iowa, and the others are scattered around the East and West Coasts).  When you add to that the fact that MichiganÔÇÖs population is in decline as some of the stateÔÇÖs traditional businesses have relocated further south, and the increasing popularity of non-carbonated drinks that do not carry a container deposit, then predicting where the puck is going to be becomes a business imperative. One place where Schupan thinks it might turn up in the not-too-distant future is in those non-deposit containers. ÔÇ£Because of the growth in non-carbonated beverages, waters, juices and sports drinks, we think those containers will have to be captured at a much greater rate than they have been in the past, and weÔÇÖll be part of that solution,ÔÇØ says Schupan.  Schupan Recycling and its partner, TOMRA NA, have a trial underway with special events venues, including the Michigan State University football stadium, to collect non-deposit containers during events, to see if it can be turned into a viable business. ÔÇ£Any container or commodity is only recyclable if there is an economically viable market for it,ÔÇØ says Emmerich. ÔÇ£You can do things in the short term but if there isnÔÇÖt an economically viable market itÔÇÖs very difficult to sustain. But weÔÇÖll find out. ThatÔÇÖs why weÔÇÖre pushing special events venues, because non-deposit containers continue to increase as a percentage of overall beverage container sales. SomebodyÔÇÖs got to collect them and there are other programs, but as the largest beverage container recycler in the state of Michigan we should have a decent chance of making it economically viable.ÔÇØ Schupan Aluminum Sales is a relatively diverse business in itself, and entirely committed to customer service. ÔÇ£We are a distribution company,ÔÇØ says president Mike Gildea. ÔÇ£We buy rods and bars and plates of aluminum and distribute them in smaller quantities to anybody who makes things out of aluminum. But we also do custom extrusions, and we do fabricating and machining, too.ÔÇØ The fabrication area has grown steadily, with an increasing diversity of customers and the addition of specialized machinery. ÔÇ£We recognize that there is a particular niche in the regional market,ÔÇØ says Gildea. ÔÇ£There are a lot of people out there who can do 100,000 parts pretty cheaply. There are not the same number who will do 200 parts. So we have filled an area that is in demand and one that not a lot of people do. ItÔÇÖs given us plenty of opportunities.ÔÇØ When I ask him about lean manufacturing, there is no hesitation in his response. ÔÇ£ItÔÇÖs absolutely a pull system,ÔÇØ he says. ÔÇ£We are continually working on lean manufacturing and becoming more efficient. Our customers have always expected that they can order a product today at 4.30 in the afternoon and have it delivered tomorrow. We have to be good at doing that. Our competitors are all much larger than we are, and we have found ways to differentiate what we do and how we do it.ÔÇØ Schupan describes the aluminum side of the business as a full circle. One division sells aluminum to people who make products from it and in doing so, produce scrap. Another division collects that scrap and sells it on to the mills, who provide raw material for the next round of the process. ÔÇ£It works very well because we have something like 3000 aluminum distribution and fabrication customers and a good number of them produce recyclable material. And then we also handle the recycling from 500 industrial plants and those plants are potential customers for us again on the other side for aluminum, so basically we close the loop on those type of customers.ÔÇØ  Always on the lookout for the future position of the puck, the company encourages the input of its employees. ÔÇÿWhat do you think?ÔÇÖ is an everyday phrase. ÔÇ£ItÔÇÖs important to have a culture where we can find the best idea,ÔÇØ says Schupan, ÔÇ£to come up with a solution together thatÔÇÖs better for our customer.ÔÇØ