Incoming MHEDA President Scott Hennie finds success in a new endeavor
2014 promises to be a very busy year for incoming MHEDA President Scott Hennie. In addition to his position at the top of the association, Hennie will be entering his second year at the helm of Elite Supply Chain Solutions (Strongsville, OH). After more than 20 years of industry experience, Hennie decided last year that the time was right to venture out on his own and start his own company.
Prior to forming Elite on January 1, 2013, Hennie spent the previous 13 years working for Hy-Tek Material Handling. It was there that Hennie got his first taste of what life would be like as an entrepreneur. He was tasked with opening the system integrator’s Cleveland, Ohio, office and building that branch from the ground up.
“The opportunity that Hy-Tek, and specifically Sam Grooms, gave me in opening and running the Cleveland office was truly invaluable to me. It gave me the confidence and ability to start a business,” Hennie says. “I’ll never forget what Sam said to me when we were going through that process. He said, ‘This is really going to be like starting your own business except you’ll be doing it with somebody else’s money.’ Without that experience, I probably wouldn’t be where I am today.”
And so, after years of soul searching and armed with experience that most entrepreneurs don’t have, Hennie decided to strike out on his own and form Elite Supply Chain Solutions.
Who is Elite?
One thing Hennie noticed was that many companies, even before the downturn, had begun eliminating or, through attrition, getting rid of internal planning staff that could develop solutions for their supply chain and distribution centers.
“Companies a lot of times are so focused internally on the day-to-day tasks of filling orders, getting orders out the door, bringing inventory in, etc., that they’ve kind of lost focus on long-term strategies in their supply chain,” he says. “All of a sudden they find themselves in a hole if an issue comes up and they have to figure out a way to deal with it. And, often, their supply chain is just not prepared to achieve that goal.”
With that in mind, he formed Elite Supply Chain Solutions to fill that void and become a partner with customers to analyze and solve specific challenges they run into through material handling solutions.
“We don’t want to walk into a situation with our clients trying to sell them on a piece of equipment,” says Hennie. “We want to understand their business, understand where they’re trying to take that business and then figure out a way to help them get there. We’re going to apply the right tools to get them where they want to be.”
To achieve that goal and ensure that Elite becomes a true partner to its customers, Hennie places a great emphasis on the company’s culture.
“I think hiring and finding people that fit the company culture and environment is more important than finding people that may have the tangible skills. You can always find those people; the trick is, are they going to fit your company culture?” he says.
One of the most important things he looks for in a potential employee is creative problem solving. It is a core tenet for both Elite and for Hennie personally.
“If we don’t have people that are creative and people that have the ability to solve problems, they aren’t going to fit in very well to our culture. I want people who aren’t afraid to make decisions. With that autonomy sometimes come errors. But I never want our employees to be afraid to make a creative decision because they fear the result.”
That emphasis on partnership extends beyond Elite’s relationship with its customers. It is a philosophy that applies to the company’s manufacturer partners, too. Though just a year old, Elite represents some of the most recognizable brands in the industry. Among the company’s supplier partners are: Borroughs Corporation; Control Electric Company; Creative Storage Systems; K-Tec; Starrco, Steele Solutions, Inc.; Teilhaber Manufacturing Corporation and UNEX.
Those relationships have allowed the company to hit the ground running from day one.
“My number one thing, and the easiest thing to do when I started the company, was to contact people that I’ve known and worked with,” Hennie says. “I’m a firm believer that any relationship is built on trust. If you have that trust with customers, with vendors, even with peers in the industry, they’re going to open up to you.”
In addition to the top-of-the-line work and products that these manufacturers provide, they also provide some brand-recognition for customers.
“If you have those manufacturers behind you, to some degree it lends some credibility to what you’re doing and who you are,” Hennie says.
For Elite, the manufacturer-distributor relationship is a key component of the business.
“Our philosophy at Elite and my personal philosophy is that we need to pick manufacturer partners that we’re going to go to business with. We’re going to win or lose deals with those partners,” he says. “I’ve seen companies who will shop vendors for the best price. That’s not a true partnership. The strength of our industry and of our company is based on relationships and trust and that has to be a two-way street.”
Hennie’s industry experience and relationships have eased Elite’s entry into the market, but, like any startup, there have been challenges.
“There are obvious challenges to starting a new company,” he acknowledges. “Do you have enough capital and cash to ride out the slow times and get through them? One of the scariest things about starting your own business is looking forward at where that next sale is coming from. But I choose not to dwell on those challenges. There are plenty of people who will tell you why you shouldn’t go out on your own. I would say that if you have the goal and the aspiration and the dream, you’ll never know if you will be successful or not unless you try it.”
Though Elite’s first year was a success, Hennie is careful not to move too fast.
“The first thing I did when I decided to start Elite was talk to people in the industry and even outside the industry who own their own business,” he says. “I really took them on as my mentors to find out the things that they did and what advice they had to give. Several of the people I spoke to have really imparted on me how important it is to resist making that first hire until I absolutely have to.”
While Elite has contracted and subcontracted resources for specific projects, the company has resisted making that first full-time hire. However, if things continue to go well, Hennie anticipates adding staff in 2014.
Though the company is still in its infancy and beginning to grow, Hennie has given a great deal of thought about what Elite will become down the road.
“When I wrote the business plan and put projections together, I really covered a five-year horizon,” he says. “Five years from now, I see us in the $8 to $10 million range in revenue. Probably seven to 10 employees. But most of all, I hope we’re a fun company to work for. We’re having fun with our customers, we’re having fun with our vendors and we’re having fun with each other. It’s a creative culture and environment and I envision an office that is open. People working together, collaborating to solve problems, to get things done. That’s what I see, in my mind, five years down the road.”