When stereo speakers started getting smaller, so did Dave Kinney Jr.’s business.
Instead of filling boxes with wires and components, he started loading them up with hats, T-shirts, paperbacks, greeting cards and staplers.
A decade later, WSP Inc. Packaging and Distribution of Rogers has served hundreds of clients, delivered to nearly every major retailer in North America and even returned to its roots assembling stereo speakers for Yamaha.
WSP came in at No. 2 on the Northwest Arkansas Business Journal’s list of largest packaging specialists (p. 29) and its 125 employees are staying busy loading the 15 to 20 trucks leaving its 200,000-SF facility on Dixieland Road daily.
Kinney declined to share the company’s annual revenue figures.
WSP serves major companies like Office Depot of Delray Beach, Fla. and Kansas City-based Hallmark as well as smaller companies like Noah’s Naturals of Los Angeles with an equal commitment to each, and without using an outside sales team.
Kinney has the Ten Commandments hanging on his office wall and the motto of the second-generation leader of the family business sounds a lot like the Golden Rule.
“We feel if we do a good job for our vendors and treat them how we want to be treated, they are going to make recommendations and that’s how it’s been since 1968,” he said.
“It’s very simple. If their business doesn’t grow because of WSP, then WSP isn’t going to grow.”
By that formula, WSP has plenty of satisfied customers.
Kinney’s company added 47,000 SF to its Dixieland factory in 2004 and recently added 30,000 SF of warehouse space while hiring around 25 new employees in the last year.
Advances in electronics caused much of WSP’s business to start going overseas late in the 1990s. In an ironic twist, the proximity of Kinney’s company to Wal-Mart Stores Inc.’s home office now gives him the edge over his Asian counterparts.
“It is invaluable,” Kinney said. “If there is a problem, how hard is it to get to China? How hard would it be to even go to Dallas? Each vendor, you want to spend their money like it’s your money.
“You can go from country to country or state to state, but how much is it worth having a local supplier who can do it all under one roof and knows the needs of every retailer?”
Kinney also used the knowledge he gleaned from Japanese companies to combine what he knew about efficient assembly line processes with their expertise in inventory control procedures.
The result? His lines can crank out 700,000 plastic “clamshells” (the tough theft-deterrent packaging on smaller items) as easily as it can turn out 1,000 full pallet displays.
With more than 1,200 supplier teams on the ground in Northwest Arkansas serving Wal-Mart — not to mention the other retailers who carry their products — Kinney has no shortage of clients who need his company’s service and need it yesterday.
Advanced drafting technology allows WSP to turn around an idea from concept to prototype of a sidekick display or a PDQ (industry jargon for “pretty darn quick”) in less than two days.
“Everybody is urgent,” he said. “I think that sets [WSP] apart from a lot of folk. We treat everything like it is urgent. We don’t want opportunity to pass them by.”
When WSP, which stands for Wood Specialty Products, relocated to Rogers nearly 20 years ago, it was the largest manufacturer of O.E.M. stereo speakers in North America.
Kinney and his sister, Shelly Johnson, took over the business from their parents around 10 years ago and Kinney had the idea to transition into the packaging business.
He started off making contacts with businesses and going to stores, checking out the quality of their displays and figuring out ways to do it better.
Kinney’s wood shop gave the company a leg up over its competitors as retailers and suppliers began looking for higher quality displays that looked better and lasted longer.
His factory has three $160,000 computer-operated routers that can form and cut components to precision guidelines that make assembly a snap.
The wood displays, known as permanent or semi-permanent, hold their appearance, can be restocked and are made of natural, environmentaly friendly products.
A major store like Office Depot will leave up a display much longer than a high-volume mover like Wal-Mart, and years of experience allows WSP to craft multiple retailer-specific displays for the same product depending on where it will be sold.
Kinney’s big break in the business came in 2000 when WSP partnered with Smurfit-Stone, the Chicago-based corrugated container giant with offices and its own factory in Rogers, for Office Depot’s “back to school” rollout.
WSP handled the entire program “A to Z,” Kinney said, manufacturing and packing every display while meeting the delivery times without any quality issues and staying under budget.
Kinney still serves Office Depot, which has 1,200 stores and made $15 billion in sales in 2006, and added a major contract in 2006 with greeting card titan Hallmark, which represents more than 50 percent of the American market and $4.1 billion in sales at 5,000 specialty stores and 30,000 other retail locations.
“We sourced many suppliers in the southwest and midwest area and found WSP to be one of the most dependable and competitive partners,” Hallmark spokesperson Brenda Warren wrote via e-mail. “In the last year, WSP assisted us with over 16 different fixture units to display Hallmark products in multiple mass channel stores. We look forward to strengthening our partnership and a busy 2008.”
When Kinney gets a client, he usually keeps it.
“Once we get a customer, typically we have a long-term relationship,” he said.
It’s the new buzzword across several industries and a main priority for Wal-Mart, which is using its clout with suppliers who want space in its stores to force reductions in packaging and increase environmental awareness.
Those goals often go hand-in-hand with supplier needs to reduce costs. And with fuel prices skyrocketing, cutting weight on a 90-truckload distribution plan is essential.
“How can we assemble it faster? How can we use less material?” Kinney said. “Those are things that are extremely important not only to major retailers but to the vendor themselves and us as a company. We all have a responsibility to do what’s appropriate. That is the biggest goal of all suppliers I’ve talked to.”
WSP uses a clean hot glue process to strengthen displays without adding material and has found ways to pack trucks tighter, sometimes reducing a 30-truck order by half.
There are also moves away from synthetic materials to natural ones for the “clamshell” packaging. Mixing a display with corrugated material and wood can reduce weight while maintaining appearance and using recycled paper products is another way WSP is helping suppliers become more environmentally sensitive.
“Their biggest goal it to make an immediate impact environmentally while still projecting their product in the best light,” Kinney said.