Contrarian approach can be most direct path to success

It has often been noted here that while the contrarian approach to business entails many risks, it is sometimes the clearest path to success. The way companies responded to the Great Recession is a case in point.

As the global economy plunged over the figurative cliff in September 2008, many businesses hunkered down in survival mode, cutting spending, hoarding cash, and generally keeping their heads down. That strategy met with mixed results. While some weathered the storm and are now regaining their footing, others weren't so lucky. The more they slashed costs, the worse things got, eventually forcing them to shut down altogether.

Not everyone ran for cover when the storm hit, however. A few contrarians decided to brave the elements and treat the downturn as a business opportunity. While others throttled back on investment, these companies did just the opposite. They invested aggressively in facilities, systems, and equipment to ensure they'd be well-positioned for growth when the economic winds inevitably shifted. One such company is Blackman Plumbing Supplies in Bayport, N.Y.

During 2009, in the teeth of the recession, Blackman, a wholesale plumbing distributor serving the New York metro area, embarked on a bold two-year investment initiative. In the first year alone, it upgraded its enterprise resource planning (ERP) software, relocated its distribution operations to a building with double the capacity of the previous site, and installed a new warehouse management system (WMS).

That was three major projects in one year—a lot to tackle in boom times, and all the more impressive given the chaos taking place in the market. But the plumbing supplier never looked back. "Without change there would be no progress," said Dave Connelly, Blackman's director of purchasing, in a press release detailing the initiative.

And Blackman wasn't done yet. As the calendar turned to 2010, the company marched forward with further investments. In addition to completing the largest acquisition in its 89-year history, Blackman revamped its delivery fleet operations and installed a new transportation management system (TMS).

As a result, the company today has both the technologies and processes in place to meet even its most aggressive customer service goals, says René Jones of Burbank, Calif.-based Total Logistics Solutions Inc., a firm Blackman engaged to help guide it through the transition. Material is received and put away within 48 hours of delivery by the vendor. Orders are now picked with radio-frequency devices. And with the system's command center, the movement of every order can be tracked throughout the facility in real time. On top of that, every delivery truck is monitored through a GPS system so the customer knows exactly when its order will arrive.

As for what all this means for Blackman's competitive position in the market, consider the following: The DC's error rate is less than 5 percent in an industry where the standard is more than double that. Blackman's order fill rate exceeds 97 percent (the industry average is between 94 and 97 percent). And the company can now tell customers with full confidence that if they place an order by 5 p.m., they'll have their supplies by 7 a.m. the next day.

What will 2011 hold for Blackman? Instead of coasting on its achievements, the supplier plans to continue on its course of improvements. "Just because the year changed doesn't mean it's time to stop progressing forward," said Stephen Davanzo, the company distribution center manager, in the press release. "One more year means a new set of challenges that must be overcome!"

Spoken like a businessperson with no fear of swimming upstream in turbulent waters.