WESTERN UNITED RANKS 3rd in SALES PER EMPLOYEE
Western United closed its fiscal year on June 30th with sales just over $140.5M, a 5.8% increase over last year. Member patronage checks and certificates will be issued upon the completion of our audit and Board meeting in late August.
WUE continues its efforts to upgrade our computer system from SAP to Prophet 21. The change is scheduled for October 1st and will allow the company to implement wireless warehouse functionality, better manage inventory and provide a fully functioning e-commerce website among other enhancements.
After considerable time and effort, WUE received a building permit to expand its Brighton warehouse. 25K square feet of enclosed warehouse space is being added in addition to 13 new parking spaces and an EV charging station. Work is scheduled to begin by the end of July.
A new pickup truck combined with our existing trailer has been added to our fleet to handle our members' smaller needs and last minute jobs. WUE has also recently added a rough terrain forklift and a high capacity, truck-mounted forklift for job site deliveries.
Hardware Pricing and Stock Position
Western United recently completed a market comparison of hardware items after Hubbell Power Systems’ mid-year price increase on June 14, 2019. In this comparison, we evaluated Hubbell’s new cost position versus Maclean Power Systems and determined that it was in the best interest of the membership for Western United to immediately begin stocking Maclean Power Systems products in place of Hubbell for some basic powerline hardware needs. Before switching manufacturers and shifting spend, Hubbell was given feedback to which they committed to respond and modify their pricing for our members moving forward. To date, revised pricing has not been received from Hubbell Power Systems.
Some real examples of the cost differences that prompted us to shift some spending to Maclean are outlined below:
|Item||HPS Cost||MPS Cost||Difference|
|5/8" x 10" Machine Bolt||$1.09||$0.90||21.11%|
|5/8" x 12" Machine Bolt||$1.23||$1.02||20.59%|
|5/8" x 14" Machine Bolt||$1.37||$1.23||11.38%|
|5/8" x 22" Double Arming Bolt||$3.15||$2.37||32.91%|
|7/16" Guy Strandvise||$24.55||$22.86||7.39%|
|Pole Top Pin, 20" with 1" Threads||$8.85||$6.96||27.16%|
We do not intend to shift any spend on current-carrying devices or unique specification is driven material items such as arresters, cutouts, etc. The immediate shift is only on common RUS approved hardware items, to provide our members with the best possible costs available in the market on these items. These items are typically relatively low cost, but with tremendous annual volume the cost differences outlined above can add up quickly.
If any member cooperative prefers to continue using Hubbell material exclusively, please reach out to your sales representative and WUE will continue to stock material to meet your needs.
We are hopeful that Hubbell Power Systems will respond in the near future with a better cost position to adequately meet the market cost needs of the Western United membership. There has been longstanding loyalty from WUE and our membership to Hubbell Power Systems. This loyalty has consistently placed Hubbell in our annual Top 5 vendors based on dollars spent. We feel strongly that the longstanding loyalty should be recognized with best-in-market cost positions.
Western United Increases Delivery Capabilities
Western United continues to grow and improve our logistics capabilities. In 2019 WUE added several new trucks, trailers and forklifts to our fleet. In response to our members' requests we have also added a covered trailer and a high capacity, truck-mounted forklift for job site deliveries. WUE also has the resources to provide our customers with job site trailers to store material at remote construction sites. As our business continues to grow WUE is committed to add to and upgrade our fleet. In 2020 WUE has budgeted for the purchase of three additional covered trailers, two new tractors, and two pickup trucks.
On a normal day, WUE has the capability of sending out over 300,000 pounds of freight to our members. And in an average month, WUE delivers over 3,000,000 pounds of freight. To manage these deliveries WUE has a staff of seven CDL truck drivers for our tractor/trailers and several non-CDL drivers for the remainder of our fleet.
Management of the daily logistics of our fleet is handled by Brian Peterson and his staff in the Brighton operation, Estevan Sisneros in the Albuquerque operation and Derek Morgan in our Salem Utah branch.
As WUE converts to a new P21 software system in the 3rd quarter of 2019, we will be migrating to a wireless barcoded inventory management system in our warehouses and will be transmitting our shipping documents electronically to our members to improve our efficiencies and accuracy.