Warehousing and distribution services
Industry: Supply Chain
Products: Warehousing and distribution services
Founded in 1947 by Jack Grunwald, Acme Distribution Centers began with a single truck before partnering with some of its competitors in the mid-1960s to create a freight consolidation program and become a national distribution center. In 1989, the company merged with additional competitors owned by Goldfogel's father.
"I got out of college in 1975 and went into my dad’s business," Goldfogel explains. "After Mr. Grunwald bought us out, I continued working for him." Because Grunwald was advancing in years, he worked out an arrangement with Goldfogel and three other senior managers so they could acquire Acme and "continue its long, rich history of success," Goldfogel says.
It was a smart business decision. Acme Distribution Centers now operates out of 862,000 square feet of warehouse space in its Aurora corporate headquarters and has a combined 3 million square feet of space with the addition of divisions in Harrisburg, Pennsylvania, and Los Angeles. Acme provides customized warehousing, inventory management, third-party logistics, distribution, and transportation services to more than 400 clients in more than 18 industries including grocery, medical, industrial, lumber and building. Annual revenue growth has averaged 10 percent, and Goldfogel expects no less in 2017. "We'll hopefully be closer to 15 percent this year," he notes.
Though his company has the capability to support the entire supply chain from manufacturing to delivery to the customer, Goldfogel says it derives a large portion of its revenues from warehousing. The transportation segment of the business is also increasing. "We try to incorporate as much transportation as we can," he says. "Transportation decisions are entirely at the discretion of our customers, so we try hard to offer very competitive, service-oriented options so that they will choose to use us rather than an independent carrier."
Additionally, "The market in general is growing but in a much more diverse way than in the past," says Goldfogel. "Today's customers are expecting even faster service than ever, and in order to facilitate that, they choose operators like us because they need added services -- which we offer -- or because we can move and account for the product efficiently for their particular needs. Or both."
Challenges: For a company like Acme Distribution Centers, growth in revenues often requires a corresponding increase in physical space -- and space can be hard to come by. "The Denver market in particular has been very tight on industrial and warehouse space," Goldfogel says. "Trying to grow to meet the needs of our customers, particularly seasonal customers, is extremely difficult. In years past, we could go out and grab a building for a year or two to satisfy short-term needs. But now the cost of those spaces, with such a shortage in the market, is a huge challenge."
So is building a stable workforce. Goldfogel says his company has seen the costs of securing, training, and retaining skilled labor increase significantly over the years. "Folks tend to be less career-oriented than their counterparts were 15 years ago," he explains. "They look at our jobs as just another job, not as a career. And because they are more mobile, some will leave if they can make even 50 cents more an hour somewhere else."
He's currently looking at "soft benefits" he can add to increase workforce retention. "We might add a small cafeteria, or some health club and physical fitness options," he says. "We're also looking at other things -- like break-room laundry machines -- that will enhance our employees' ability to have more free time when they get home by enabling them to handle some personal chores during the workday."
Opportunities: Goldfogel would like to see his company do more of what it does best in order to grow both its local and national market. "We're trying to leverage information passing, listening to what our customers need, and really staying focused on minding the store," he says. This will include further-customization of their information system platform to increase user-friendliness and provide faster, better information for Acme's customers.
Needs: Acme Distribution Centers will be hiring its entry- to mid-level managers this year. "We need young, entry-level management professionals who will look at the job we're offering with a long-term focus," Goldfogel says. "They should be willing to invest their energy and time and really dig down and get it done in exchange for longer-term security and gains."