November/December 1994
This Michigan-based recycler cites service as the key behind its growth in the scrap recycling and metal distribution businesses, and it is service on which the company is betting its future success.
By Kent Kiser
Kent Kiser is an associate editor of Scrap Processing and Recycling.
Marc Schupan and his fellow executives at Schupan & Sons Inc. make it clear that the S’s in the company’s name stand for something more than its corporate moniker, and that’s service.
An almost-religious devotion to service infuses and defines this Kalamazoo, Mich.-based ferrous and nonferrous recycler to the point where talking with its principals is an exercise in déjà vu. “We’re service-oriented,” says one. “Our bottom line is service,” echoes another. And yet another intones, “Our service is outstanding.” This is one scrap company that seems to take the “S word” not only to heart, but also to soul.
According to Marc, the firm’s president, customer service is so important, in fact, that it’s quickly replacing price as the key factor to success in the scrap recycling business. “If the only thing you have to distinguish yourself from your competitors is price,” he says, “then you’re not long for this world.”
And Schupan has every intention of being long for the scrap recycling world.
The Three Faces of Schupan
Schupan & Sons entered the scrap recycling world in 1968, when Nelson Schupan--Marc’s father--bought the Konigsberg Co., an existing recycling operation in Kalamazoo that primarily processed aluminum scrap. Then, just six years after launching the company--in 1974--the elder Schupan died, leaving sons Marc and Dan (who now serves as the firm’s executive vice president) to take over the fledgling enterprise.
One of Marc’s first executive actions was changing the business’s name to Schupan & Sons in honor of his father, and as a further honor he and Dan set about building the business. Their efforts have paid off. In the 20 years since the Schupan brothers took the helm, the company has mushroomed--growing from its humble beginnings with six employees at a single 10,000-square-foot building to about 170 employees at eight locations in Michigan and Indiana, which altogether total about 40 acres and 250,000 square feet of interior operating and office space.
As the company has grown, its scope has broadened to the point where, today, the firm is actually three companies. The first, an industrial scrap processing and brokerage business, is known as Schupan & Sons (which, not to confuse you, is also the umbrella name for all three companies). This segment of the firm recycles ferrous and, predominantly, nonferrous material at two processing plants in Kalamazoo as well as two facilities in Elkhart, Ind., that operate as Dana Metals Inc. (named after one of Marc and Dan’s two sisters).
The firm’s second part is 16-year-old Schupan Aluminum Sales, which--as the name suggests--is an aluminum distribution center, selling sheet, plate, bars, extrusions, and other products out of two immaculate 20,000-square-foot facilities in Kalamazoo and Grand Rapids, Mich. This division, an offshoot of the usable aluminum business of Schupan & Sons, caters to smaller and special-order aluminum consumers.
Then there’s Schupan Recycling--the company’s third and youngest division--which recycles all-aluminum used beverage cans (UBCs) as well as glass and polyethylene terephthalate (PET) beverage containers out of three plants in the Michigan towns of Wixom, Holland, and Grand Rapids.
Plugging Into Partnering
Much of Schupan’s growth from a one-location operation to a multifaceted, $60-million-a-year business has been “customer-driven,” notes Dave Healy, controller. In other words, he says, suppliers and consumers have approached the company with a recycling need and asked it to expand its business to help them. And Schupan has rarely said no. “You have to assess what your customers’ needs are and address them because that’s the only reason you exist,” says Marc. “If they have a need that has to be filled, you’d better figure out how to do it because it you don’t, somebody else will.”
For a prime example of what Marc’s talking about, look at Schupan Recycling, which the company launched eight years ago to accommodate bottlers and beverage wholesalers that needed help recycling the beverage containers they recovered through Michigan’s bottle-bill redemption program. “The key is relieving customers of their problems,” says Rich Holtz, vice president of Schupan Recycling. “If you do that, then the customer will look at you as a partner.”
Schupan’s executives use the terms “partner” and “partnering” often to describe the company’s emphasis on responding to customer needs. As Dave explains, “We listen to what our customers are trying to accomplish, then we work with them to accomplish their goals in a way that also enables us to make a profit.” In essence, the partnering process involves identifying what services Schupan can provide for its customers that they can’t or don’t want to do themselves, or that Schupan can do more economically.
Take old or off-spec soft drink containers, for instance. Schupan Recycling empties such full containers for some bottling customers, disposes of the liquid contents, and then recycles the containers, thus saving the bottlers from expending the time and effort to do this task. The company has also taken on the challenge of recycling other items generated by bottlers and wholesalers, items such as corrugated containers, plastic bags used to hold redeemed containers, and plastic shipping “shells” that have become outdated by new bottle designs. “We do whatever our customers wish us to do for them,” says Marc Rose, vice president of scrap operations. “We’re here to help them do their jobs better. We don’t always make a profit from everything we do for a customer--we’re not always looking at that--but if we can help our customers be more profitable, then in the end that will help us be more profitable.”
Another example of partnering in action is a relationship Schupan recently established with S&R Enterprises Inc., a Wabash , Ind. , secondary aluminum processor headed by Tom Gebhart, a long-time Schupan employee who also now serves as part owner of S&R. In this arrangement, Schupan sends aluminum scrap to S&R for toll-melting into sows, which Schupan then trades for aluminum that it can have made into a finished product for resale in its aluminum distribution business. Both companies benefit from the arrangement, and Schupan is able to add value to what it would otherwise have to sell simply as aluminum scrap. “More and more, I see us continuing to improve our ability to trade an item, potentially bringing back finished product, and then selling it, really closing the loop,” Marc Schupan says.
Going Above and Beyond
To Schupan & Sons, great service means more, however, than just accommodating the special needs of its suppliers and consumers. It also means surpassing their expectations day in and day out. “We expect to make money,” Marc says, “but we also expect to earn it by going above and beyond.” As Dave adds, “If it takes working until 10 p.m. to take care of a customer’s needs, then so be it. It’s whatever it takes.”
As an above-and-beyond example, Dan recounts the time he spotted a less-tan-attractive Schupan container in use at a supplier’s plant, so he had the container in question replaced with a better one and the supplier’s scrap transferred to the new one. “I want my equipment to look nice and I want to be proud of it because that’s a reflection on me,” Dan comments.
Even more notable, there have been many times Schupan has shared the profits on a scrap sale with the supplier if it made more money on the transaction than it had expected. “Sure, we could take the extra profit,” says Marc Rose, “but that type of sharing helps us hang on to our customers. They expect that we’ll do those things for them.”
Then there’s Schupan Aluminum Sales, which has built its business on going beyond the norm by meeting urgent or unusual requests from many of its more than 2,800 customers. In addition to its normal distribution services, the firm serves as a special-order operation, arranging for specialty extrusions to be made for specific customers and maintaining those items in stock for just-in-time delivery, with 70 percent of its orders being shipped within 24 hours, notes Mike Gildea, president of Schupan Aluminum Sales.
Schupan’s rigid adherence to high environmental compliance standards is offered as another example of the lengths the company goes to satisfy--and protect--its suppliers and consumers. To illustrate this point, Marc notes that the firm has spent more than $250,000 on concrete, storm water runoff protection, and oil separation equipment at its new Dana Metals facility in Elkhart , which opened in November. “We don’t take shortcuts,” he says, asserting that such prudent environmental management brings a “comfort level” to customers and is an invaluable selling tool for the company. “It’s just as important as anything else we do for our customers, probably even more important than price,” Marc states.
And how many scrap recycling companies do you know that publish quarterly newsletters for their suppliers and customers to keep them abreast of the scrap commodity markets? Schupan does, mailing the Aluminator to its aluminum distribution customers and producing the Metalist for its industrial scrap suppliers.
The company’s devotion to service has brought the firm its share of rewards in the form of new opportunities and burgeoning business, as in the dizzying growth of Schupan Recycling. IN just eight years, the company has managed to corner 60 percent of the UBCs collected in Michigan and has become one of the top-five UBC recyclers in the country, Marc claims.
Other rewards are obvious just by looking around the Schupan headquarters, which is filled with commendations from consumers such as American National Can Co. (Chicago), Anheuser-Busch Recycling Corp. (St. Louis), and Cressona Aluminum Corp. (Cressona, Pa.), which names Schupan its recycled metals vendor of the years in 1991 and 1992.
These awards and the company’s ongoing success reinforce Marc’s belief that service, more than price, is what matters most to scrap suppliers and consumers. In fact, service is what will determine the long-term viability of not only Schupan, but all recycling companies, asserts Marc, who is a long-term kind of guy, as Dave can attest. “Everything is focused on the long run around here,” Dave says. “We’re constantly looking at where we are today and how that projects into the future. We don’t focus on the short term, even if it means less profit now.”
A People-Oriented Perspective
Far from being exclusively service-oriented, Schupan prides itself on also being people-oriented when it comes to its suppliers, customers, and--especially--employees. After all, Schupan’s executives point out, high-quality service isn’t a naturally occurring phenomenon--it can’t happen without productive and committed employees. “You can have all the equipment and computers in the world,” Marc Rose comments, “but if you don’t have good people to operate them, you’re in big trouble.”
One way Schupan ensures that it gets the best from its employees is by running a democratic organization in which all share in the company’s success. “Marc [Schupan] doesn’t have the attitude that he’s going to take care of just the upper-crust people,” notes Rick Hutchins, transportation and maintenance manager. Or, as the president himself explains the situation, “If the company does well, everyone does well. Our success isn’t one-sided.” And he goes to great lengths to enforce this democratic principle. One time in the late 1980s, for instance, Marc had the opportunity to turn in an old leased car for a new one, but times were tough, so he chose not to get a new car until the company was able to give raises to its employees.
Schupan is also democratic in the way it solicits all employees to offer their ideas on how to improve operations. Jay Sherwood--who has no formal title but basically serves as general manager of miscellaneous corporate affairs--says the one of the firm’s most-notable characteristics is the degree of employee involvement and the credibility given to every employee’s input. “No matter where employees are in this organization, they are a vital link to the company,” Jay remarks. “An hourly worker’s opinion is just as important as a manager’s opinion.”
Beyond democratic practices such as these, Schupan inspires commitment from its employees by addressing their professional as well as personal needs. “Same as we listen to our customers and try to meet their needs, we listen to our employees and attempt to satisfy theirs,” says Dave.
On the professional side, the company responds by giving its employees challenge in their jobs, the freedom to operate, and--perhaps most important--opportunities for growth. Marc can point to several employees who have climbed through the Schupan ranks, individuals such as Dan Noble, who began work as a truck driver but has since ascended to his current position as manager of ferrous operations.
When it comes to addressing the personal needs of its employees, Schupan does what Marc Rose calls “a lot of little things for people” to show it cares about them off-work as well as on the job. Little things like being flexible with personal time off, offering an employee assistance program, setting up appointments for employees to see bankers, lawyers, and doctors, even accompanying employees on professional appointments to help them get what they need. The company also allows it personnel to buy tires through its corporate tire supplier and has set up a payment plan for them to ease the financial burden. “Wages aren’t what keeps employees with a company for the long term,” says Marc Rose. “These kinds of actions don’t necessarily put money in their pockets, but they help them out in other ways.”
The company’s human approach to its business has helped it retain employees, which Marc Schupan says brings stability and reliability to Schupan’s operations, and the company can indeed boast of a large roster of long-term employees. “People still do business with people,” Marc explains, “and the kind of people we have has really helped to cement relationships. Our business is a business of relationships. How close to a company would you feel if every month they changed the people that you had to deal with?”
This attitude is far from being limited to the workplace. The company’s human focus also spills over into the communities in which its employees live, as is evident from all the plaques from charitable organizations and trophies from local youth sports teams that adorn the firm’s offices. “If you live and work in a community, you have to put something back into it,” Marc says.
As part of its community-conscious actions, Schupan feels a responsibility to keep its operations well-landscaped and its truck fleet sharp-looking and well-maintained. As Marc pulls into one of the Kalamazoo plants, he remarks with obvious pride--and a little wry humor--“This isn’t Sanford and Son.”
Keeping Ahead of the Puck
When discussing Schupan’s plans for the future, Marc offers a quote from hockey great Wayne Gretzky, who once said, “I don’t go where the puck is. I go where it’s going to be.” Marc--who has played his share of hockey--says, “That’s what we try to do,” meaning that the firm tries to anticipate and stay ahead of market trends rather than simply keeping up with them.
Though Schupan has at least tripled in size and revenue in the past five years, Marc sees continued “significant” growth for the company in the coming three years, followed by a “refining” period. To him, growth is imperative for two reasons: to enable the company to maintain its position in its current niches--as well as expand into new ones--and to satisfy its employees. “If you don’t have growth, you don’t have opportunities for your employees,” he explains. “If you’ve got good people, they’re going to want opportunities.”
The firm’s future growth could mean another aluminum distribution center in Michigan that could double the division’s current size. The company also expects to see sizable growth in its industrial scrap business, thanks to the recent opening of its second Dana Metals facility in Elkhart . Previously, Dana Metals was only a 5-acre, 5,000-square-foot retail business, buying primarily nonferrous scrap from northern Indiana and serving as a feeder plant to the Kalamazoo facilities. With the opening of the new plant--a 10-acre operation with 50,000-square-feet of interior space--Schupan expects to augment its overall nonferrous operations and expand its ferrous base.
And, of course, there’s always the chance the company could enter totally new facets of the recycling business. “Anything that has to do with recycling is where Schupan is headed, whether it be in ferrous, nonferrous, plastics, aluminum, you name it,” says Marc Rose. “If there’s a market to be profitable in, then the company is going to be there. We haven’t sat still yet, and I don’t think we ever will.”•
This Michigan-based recycler cites service as the key behind its growth in the scrap recycling and metal distribution businesses, and it is service on which the company is betting its future success.