July 26, 2016 Market Tools

Volume 11 | Issue 1

Waterloo Industries, an operating division of Fortune Brands, Inc., is the world’s largest supplier of tool storage solution products for both retail consumer and industrial applications. David Soyka reports on how this mid-western company thinks about the box.

Waterloo Industries has a place for your “stuff” – whether you need a $9.95 plastic container to pack a few home tools or a $10,000 storage unit to hold up to four tons of specialized equipment. But it’s more than just a place to keep stuff – it’s a highly effective way to make you more efficient. More efficient storage pays off in process improvements that help individuals and entire companies work more productively.
“We’re the only company in the tool storage business that offers such a breadth of products, from a small, hand carry box for the home or professional markets to a wall/floor cabinets and workbench system to optimize process flows for heavy duty industrial applications,” explains Beth Sulentic, senior marketing manager. “Many of our customers have needs across the spectrum, so dealing with Waterloo provides them with a one-stop shopping source. Our product breadth is one of our key competitive strengths.

In fact, Waterloo sells more than 2,500 products, encompassing chests, toolboxes, trolleys, cabinets and workbenches under its own popular brand names such as Magnum and Traxx, among others, through retail, automotive, and industrial distribution channels. The company also produces private brands for retailers such as Lowes and Sears. You’ll find Waterloo products shelved in automotive supply stores, hardware stores and home improvement centers primarily throughout the United States, although also in Canada and Mexico. In addition, Waterloo has a European distribution network, and is making inroads in many rising industrialized nations. Waterloo employs about 750, which can rise or fall depending on seasonal demands, and has estimated sales in excess of 150 million last year.

This is pretty impressive for a company that started out in the grocery business, then made a shift into making automotive valve springs and various related tools, before taking another change of direction to become a storage solutions powerhouse. The story starts more than 80 years ago when then 15-year-old Nicholas Sulentic immigrated to America from Yugoslavia.

It may not have been a good thing for Napoleon to meet his Waterloo, but it certainly was for Nicholas, who found his way to Waterloo, Iowa and established that city’s first supermarket and bakery. But young Nicholas’s talent for engineering solutions soon shifted focus from food services to automotive mechanics.

Back in the 1920s, the carbon build up in a car engine was so severe that the valves had to be ground every 5,000 miles to restore them to good working order. Nicholas invented a tool for a mechanic to compress valve springs for replacement in the engine block following the valve grinding job. This led to the establishment of the Waterloo Valve Spring Compressor Company, which eventually produced a range of 25 automotive mechanic’s tools.

The valve spring compressor was an awkwardly shaped tool, however. Ray Sulentic, the oldest of Nicholas’s six sons who were all involved in the business, built a tool box in which to store it. Customers were so impressed with this tool box that, in 1938, Waterloo started manufacturing these for sale. The first tool boxes were made for Cornwell Quality Tool Company, which is still a customer today. Sears Roebuck became a customer in the late 1930s, and by 1941 tool boxes were being sold to larger companies such as Herbrand, Goodyear, and later to Montgomery Ward and J.C. Penney’s. By 1957, the production of sheet metal toolboxes became the sole source of revenue, and three years later the company was rechristened as Waterloo Industries.

Storage Solutions
Today, Waterloo is the world’s largest storage solutions provider, and is now an operating division of Fortune Brands, a leading, $8-billion-a-year consumer brands company. John Heppner has been CEO since 2006.
“We’ve built a solid reputation based on product innovation and high quality,” notes Beth Sulentic. “We also have a large customer service department that is highly responsive to end-user questions and concerns. Our intent is to develop long-term customer relationships, not just get product out the door.”

She adds, “We’re not really competing with the low-cost provider. Of course, everyone’s concerned with price, and we strive to provide customers with the best pricing. However, our storage solutions, particularly in the industrial segments, are especially designed to improve operational performance. Over the long term, quality design and construction saves money, even if you pay a little more for the product up-front.”

Case in point is the newly announced Magnum® Facility Storage Units, with heavyweight load capacities of up to four tons provided in sleek, ergonomic units designed to maximize workspace organization and efficiency. “The idea is to be strong and lean not only in appearance, but functionality,” Sulentic explains. “These cabinets and workbenches are designed specifically to address the needs of lean manufacturing initiatives to make the assembly floor more efficient by providing easy access to tools at readily identifiable locations. In fact, this product line is unique in that it is the result of an extensive research methodology to determine what our industrial customers needed, and then design a system that addresses these needs. We’re one of the few storage manufacturers that has ever done anything like this.”

According to a company press release, “Available models include floor cabinets, wall cabinets, and six-foot workbenches. A six-foot backwall and a workbench drawer accessory are also available. Each unit features a variety of benefits to maximize efficiency while maintaining a lean work environment.” The floor and wall cabinets feature a patented V-rib design, adjustable shelves, easy mounting to combine units into a complete system, and are available with and without doors. The workbenches have an 8,000-pound capacity and quarter-inch pegboard holes to provide visible tool organization and are easily assembled.

Patented Quality
Waterloo, which is still headquartered in the town of its namesake, has two highly automated manufacturing facilities totaling 675,000 square feet, one in Sedalia, Mo. and the other in Nogales, Mexico. Unlike a lot of manufacturers who turn to offshore outsourcing to reduce operating costs, Waterloo sees more advantages to manufacturing in-house. “While there are some parts we source, for the most part everything is made and produced domestically,” Sulentic explains. “Part of it is the nature of our product – in shipping parts overseas you tend to ship a lot of air as part of the packaging, which drives up cost. Equally vital, though, is that we achieve better quality control by doing our own manufacturing. Each of our facilities has its own dedicated production, engineering and training staffs to provide specialized production capabilities to meet specific customer needs. We have in-process inspections and our employees are empowered to make decisions on the spot to maintain high quality levels. Waterloo is the consistent leader in features and testing compared to competitive brands, and our prototypes are subjected to an extensive barrage of fatigue and durability tests before we go into full production.

While Sulentic expects that an overall decline in consumer spending resulting from current economic uncertainties may adversely affect Waterloo’s retail business, she is confidently exuberant about prospects in the professional and industrial segments. “We’re looking to patent Waterloo-developed technologies that are based on extensive research into customer working environments and performance needs. Our tools storage products are designed to complement lean initiatives that stress optimizing work processes. I believe that we are the only storage tools company to develop product this way, and we’re already working on the next phase of research to further refine our designs and improve tool storage efficiency,” Sulentic notes.

And whatever uncertainty may be ahead for consumer products, Waterloo is charging ahead in applying innovation. “We’re thinking beyond the tool storage box,” Sulentic explains. “One of the big trends today is garage organization. It’s not just a question of where do you put your rakes and shovels, your hammers and saws. It’s also about where your golf bag goes, and your kids’ toys, and the lawn chairs you’re storing over the winter. How do you cost-effectively organize all these different kinds of things in a garage space?”

You can bet Waterloo has the answer to this and any other storage issue. “We’re a company that is looking towards the future,” Sulentic notes. That’s a future you can be sure will have plenty of “stuff” in it, with increasing need for the more intelligent kind of storage solutions that Waterloo has built its business on.

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