Opportunity and challenge go hand-in-hand as Airgas advances. Initially a local distributor of commodity gases, Airgas has evolved into a national partner providing value-added products and services to large, leading corporations and smaller, specialized enterprises. Its entrepreneurial, flexible, market-facing approaches enable it to partner with its customers by understanding their businesses and their goals. A central challenge lies in managing the company’s ever expanding operations, while incorporating new products, new technologies, and new information systems. Opportunities for growth are vast and include expansions into new geographies and services, while renewing a daily recommitment to customer service.
Today, as in 1982, Airgas provides gas in cylinders to customers. Through the years, the company has expanded from that simple start into a great variety of product adjacencies. Today Airgas serves more than one million customers in a multitude of market segments, even as strategic growth businesses support and develop around its core industrial gas product line.
Airgas Specialty Products was created with the 2005 purchase of an ammonia business. Industrial ammonia is used for refrigeration, metal finishing, water treatment and chemical processing. Power plants, cement kilns and other industries regulated by the EPA use ammonia to control greenhouse gas emissions. With the completion of facilities in California and Missouri, Airgas Specialty Products now distributes ammonia and provides ammonia-related services from 25 facilities and is the largest seller of packaged ammonia in the country.
Airgas operates eight national labs and over 60 regional labs able to produce high-purity specialty gases and gas mixtures. The labs are designed to augment the capabilities of more than 325 Airgas traditional gas-filling plants throughout the United States. Their work is supplemented by two specialty gas equipment centers and an R&D center.
In 2008 Airgas acquired Refron, which gave the critical mass necessary to form Airgas Refrigerants, a promising new business focused on the sale and reclamation of refrigerants.
Mike Molinini, Executive VP and COO
EXPANDING CUSTOMER SERVICE
As Airgas expands, the call to customer service has steadily moved to the center through an ongoing series of “core strategies.” Approaching the year 2000 the company repositioned for growth; then came the strategic accounts business, reaching into untapped markets. However, as the company grew, it slipped behind aggressive independents who took customer service to a new level by providing exactly what customers wanted when they wanted it.
In 2003 Airgas launched Core Strategy I in response, stocking its stores with the products customers most needed and training frontline associates on welding and cutting techniques to better answer customer questions. Airgas also enhanced the tools and resources used by branches to manage their businesses, streamlining tasks that took time away from serving customers. Numerous innovations were put in place to make ordering easy, invoicing accurate and deliveries punctual.
Building on the success of this strategy, Airgas launched Core Strategy II in 2008 to ensure that every customer experience is a positive one. By stressing outstanding service, Core Strategy II aims to create a competitive advantage. The centerpiece is an intensive training program in service skills and behaviors for customer-facing associates in every Airgas region. In three- to five-day training sessions, associates learn how to improve their service skills and behaviors, focusing on “The Three C’s”—Connect, Consult, and Complete—in every interaction. The program is yielding excellent results, as letters from grateful and satisfied customers testify.
Most recently, Airgas has launched Core Strategy III to implement a highly customized version of the SAP business information system. This will unite the company across an enterprise-wide information system and improve business processes, making it easier for customers to do business across multiple Airgas branches. In the Airgas spirit of continuous improvement, Core Strategy III and the new SAP system replace four major computer programs, more than 40 enterprise-wide systems and in excess of 250 unique applications. The strategy involved tapping hundreds of subject-matter experts in more than 90 “design sessions” to develop the processes that will sustain the company. The first go-live conversion was for Airgas Safety, all Airgas Distribution Centers and Buying Centers, Worldwide Welding, and portions of Airgas accounting, Airgas headquarters and strategic accounts in July 2010, and all went smoothly.
As new companies were steadily acquired, Airgas found itself with a plethora of processes for creating and distributing product information. Standardizing this system soon became a challenge. The idea of transitioning to a single software platform became increasingly attractive in recent years. Fortunately SAP offered the solution to this challenge. Customizing and implementing SAP on a company-wide scale is today the subject of a concerted effort by all Airgas associates.
In a daily sales business with over 1,000,000 customers, making key decisions as close to the customer as possible, is the key to quality customer service. The new system has to embody this core aspect of company philosophy. To develop its customized SAP system, Airgas engaged 300 subject matter experts to identify the particular needs of the system within a highly competitive packaged gas market, and implement it without disturbing the Airgas customer base.
In July 2010 Airgas successfully converted it hardgoods supply chain infrastructure to SAP. The hardgoods supply chain included more than 300,000 stock keeping units, six national distribution centers, and a safety products telesales organization. The early success of this implementation spurred the decision to accelerate the conversion process company-wide.
Airgas realized long ago that expanding its safety telesales organization into welding hardgoods and packaged industrial gases would mean it could reach an untapped customer base, but they were hindered by the incompatibility of the various information systems it employed. The new SAP not only resolved these issues, but also allowed Airgas to transform its website to an online sales channel.
Guided by the mantra, "It Is All about the Value," Airgas has continued to successfully implement its highly customized SAP system and is already realizing its economic benefits in the key areas of sales growth, price management, and administrative and operating efficiencies. Full implementation is expected by the end of 2013.
Great potential lies in the market segment approach, which underlies much of the company’s activity. Industry-focused teams deal with medical, construction, retail food and beverage, and university segments, among others.
At the same time Airgas is once again expanding overseas, through its subsidiary company Red-D-Arc Welderentals, the largest provider of welding and welding-related rental products and services in North America. In 2003 Red-D-Arc incorporated in Mexico, and three years later it launched a joint venture in Dubai, UAE, to provide service in the Middle East. Red-D-Arc moved into the European market through the 2008 acquisition of A&N Plant, a supplier of new and reconditioned equipment, with facilities in England and the Netherlands and operations in Europe, Asia and the Middle East.
AIRGAS LOOKS AHEAD
Despite a global economic downturn of epic proportions, and a prolonged hostile takeover bid from Air Products, Airgas has emerged stronger than ever. Airgas is now poised to reap the benefits of its recent investments in company infrastructure and continue to generate value for Airgas shareholders. The ability to thrive—not merely survive—can be attributed directly to the extraordinary talents of Airgas associates and their focus on the core strategies of customer service, workplace safety, teamwork, community involvement and cost control.
With more than 30 years of success to his credit, Airgas CEO Peter McCausland confidently states that, for Airgas, “the best time is now.” More than 15,000 associates in approximately 1,100 locations power the company’s expanding repertoire of products and services. A culture of entrepreneurship and growth pervades the Airgas family. Airgas today and tomorrow proudly provides essential ingredients of our modern lifestyles. Truly, the best time is now.