November, 2005

National Lumber, Mansfield, Mass.

By Dan Emerson

Although most of its original founders have long since passed on, Massachusetts-based National Lumber has managed to retain the feel and unity of a family-owned business, while growing into one of the largest independent lumber/building material dealers in New England.

Family-owned and operated since it opened in 1934, National operates four distribution yards in its home state, with annual sales of more than $200 million. National Lumber Co. was founded in 1934 in Roxbury, Mass. by Morris Kaitz, who built the company with the help of his four sons, Harold, Samuel, Louis and John. Morris died in 1955, one year after National opened its second branch in Salem, Mass.

In 1957, the company built its existing Newton branch to replace the Roxbury facility, which was phased out.

Harold Kaitz, the oldest son, died in 1970 and his brother, Samuel, six years later. Louis and John led the company for the next 25 years. In 2000, John died, leaving Louis, the current chairman of the board, as the patriarch of the business.

In 1990, National acquired a 12-acre parcel in Mansfield, Mass. and built its current headquarters and a third distribution facility. A decade later, National added a 36,000-square foot building for a retail store/drive-through warehouse, and its millwork offices and distribution center. The same year, the engineered wood lumber and design division moved into a separate, 16,000-square foot office building adjacent to the Mansfield headquarters.

National co-CEO Steven Kaitz, the 52-year-old son of John Kaitz, has worked full-time in the family business since 1975. In 2002, he moved from president to co-CEO, along with his sister, Marjorie Kaitz-Seligman, after 20-year employee Manuel Pina was named company president.

Pina, an engineered wood products expert was brought into the company in the mid-’80s "to lead us into the new technology and new way of building that we foresaw ahead,” Kaitz explains.

"We’ve developed a reputation in the New England area as the engineered wood products experts; over the last 10 to 15 years we’ve built up a large engineering office and team, far and above any other (competing) lumber company. The lumber business has become much more technical and that’s where we’ve put our emphasis in hiring.”

On the IT side, National has a full-time, in house software programmer "who has been with us more than 10 years and is constantly being challenged to help us improve our efficiencies. We really feel comfortable having someone who can make changes instantly; it’s much easier than dealing with a larger computer software company, where we would be one of many customers.

"We feel the same way about a lot of our positions. We also have an in-house counsel, which makes things easier. We don’t have to wait around for something to happen, because we’re his only client.”

The company has doubled its business in the past four years, driven by the housing boom and overall strong economy in New England. "After 2000 (when the stock market crashed) and the events of 9-11, people thought real estate would be a safer place to put their money. We’ve been able to benefit by the real estate boom, as well as the low interest rates. We’ve actually been on a 13-year run since the first Gulf War ended in 1992.

We had gone through tremendous growth in the ‘80s, until about ‘89 when a banking crisis developed, along with a major depression in the building and real estate business in New England that lasted into 1992. We went from $45 million in revenue in 1989 down to $18 million in 1991, and contracted dramatically.”

One of the major drivers of National’s recent growth was the company’s purchase in 2003 of Reliable Truss and Components, a 51-year-old direct manufacturer of engineered products, located in New Bedford. National made the acquisition to meet a growing demand for roof and floor trusses and wall panels, according to Kaitz. Reliable produces steel and wood trusses and wall panels using high-production automated equipment and facilities.

National also acquired a framing company which it later sold off. "We felt it was important to control the labor end of the business, especially for larger projects. But we realized soon after purchasing it that it was a different culture and we should concentrate on what we do best, which is engineering, manufacturing and distribution.”

For builders of large residential projects, National Lumber offers a Kitchen Sales division. In 2003, National opened its first, 6,000-square foot Kitchen Views designer showroom in the Boston suburb of Newton. Suzi Kaitz, Louis’s daughter, is general manager. The showroom features 10 room-size vignettes displaying custom cabinetry, windows and doors, architectural millwork and decorative hardware in a variety of styles and motifs, along with kitchen cabinets and countertops, fine millwork and specialty hardware products. Additional Kitchen Views showrooms opened in Newton and Mansfield in 2004, followed by New Bedford in early 2005.

National has continued its facility growth, recently adding two new buildings on vacant land adjacent to the New Bedford plant: a manufacturing facility, and the company’s fourth retail and distribution location, which opened last February.

To serve a delivery territory that extends into New Hampshire, Maine, Connecticut and Rhode Island, National Lumber maintains a fleet of about 50 delivery vehicles including millwork box trucks, flatbeds and trailers, all equipped with mounted forklifts, plus booms and cranes to place materials at the job site. National guarantees delivery within 24 hours of an order, and 48-hour pickup of returns. Trucks pre-loaded the previous day for first-out deliveries are on-site by 7 a.m. "We’re one of two or three companies in this region that try to sell throughout most of southern New England, so we’re constantly competing against smaller, local lumber companies that are geographically very close to their customers,” Kaitz says. "So, that’s been a challenge, to be able to make our customers feel we can service them as well as a lumber company that is only two or three miles away. We have our drivers start at 5 a.m. And we ship right into the evening and on Saturdays. We do whatever it takes so the customers never feel they are compromising their jobs by dealing with someone who is further away.”

To remain successful, Steven Kaitz emphasizes the importance of continuing to provide the kind of personal service and flexibility customers come to expect from a family-run business. "It’s still a family business,” Kaitz says. "It’s extremely important that we maintain that relationship with our builders; that is primary along with our relationships with our vendors and employees. With my uncle (Louis) still involved in the business, we have been able to do that, even though the growth has been dramatic. We haven’t grown too fast to still be very hands-on and we wouldn’t want to grow beyond that feel.

"Along with the family members and Manny, Elliot Kaplan, our senior VP of sales who has been with us for more than 25 years, has been very important in that; he’s very accessible to our outside sales staff and customers.

"Thirteen years ago, when our (recent) growth started, we had relatively few employees, about 60, and few outside sales people. For most of the years before that, my father had been our only salesman. From 1989 to 1991 he and Elliot started hiring sales people, taking advantage of the fact that some of our big competitors had gone out of business.”

Steven Kaitz is directly involved in overseeing customer credit. "That keeps me linked with a lot of our customers. To allow some flexibility, which our builders need, I have to have knowledge of exactly what is going on with their business, which I try to do either directly or through our outside sales people. That flexibility allows us to grow by taking some calculated risk.”

In continuing to grow, "we feel we need to stay one step ahead of everyone else,” Kaitz explains. "We’re always looking for avenues to do that. When we make a change we do it in a way that looks toward the future. We thought that having an engineering office would put us ahead of the curve, and it has. Now, having built a wall-panel plant, that’s the next step.

"Ten years ago, we were the first company to add Moffett’s ‘piggyback’ forklifts. We had two Moffetts and realized all our customers would want the opportunity to have Moffett deliveries. So, virtually every truck is outfitted with a Moffett. Most of the other companies in this area have followed suit, but to a lesser extent.”

National’s "terrific” desktop shipping and expediting system is another example, according to Kaitz. "Ten years ago, Manny Pina had a vision that we could have on a (PC) screen something similar to what you see on the video monitors in airports—showing flight numbers, changing times... Everybody scoffed and told us it couldn’t be done, but it was. Manny has great vision. Vision, efficiency and desire produce results.”

Fairly low turnover and employee loyalty has been another important factor for National. "More than half of our 500 employees have been with us more than five years; and within the next three to four years, half will have been with us more than 10 years. Retaining our employees and consistency in dealing with customers both at the store-level and with the outside sales people has been really key in keeping the business growing.”

The company does a lot of promoting from within, Kaitz points out. To boost retention, "employees need to feel that they have opportunities all the time and we do present opportunities to them.”

About two years ago, National developed a formal mission statement spelling out the company’s raison d’être and goals. The statement includes the dictum to "treat every challenge as an opportunity in work clothes.” "It’s something we’ve always talked about and tried to adhere to. We wanted everybody who works here to understand and believe. We’ve put the mission statement on mouse pads and posted it in strategic places throughout the buildings. I look at it everyday, myself, and believe in it.”

Going forward, Kaitz plans to continue the strategy of controlled growth. "We’re going to continue to look for opportunities for acquisitions, both in our core, lumber business and in ancillary products. We’ll continue to grow our customer base both internally through acquisition. And we’re always looking to find good people (employees), not just here in New England but throughout the country, and the world. Good, smart people will want to come to work at a company growing at the speed that we are.

"As we bring on new people, it’s a great feeling to know that we continue to have a core group of people who have been with us 10 years or more, who keep the business on a solid foundation with their experience.”

Dan Emerson is a Minneapolis-based freelance writer.