Making The Best Of A Bad Thing

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They say it is an ill wind that blows no man to good. Or, to put the matter somewhat differently, there is nothing wrong with a plague of locusts if you happen to be in the pest-control business. Whatever your choice of metaphor, it stands to reason that some people must be doing quite well for themselves, given all the calamities that have befallen the human race in recent years. Such is indeed the case, as the following examples attest.

Remember the Tylenol scare? That was bad news for headache sufferers, but good news for Templock Corp., a Santa Barbara, Calif., company that specializes in heat-sealed packaging. William Spargur, president, reports that business has been booming since the poisonings in Chicago. "We didn't find a wide application for our system [in the food and drug industries] until the Chicago incident," he says. "It really changed the complexion of the industry." The privately held company had sales of about $2.7 million in fiscal 1982 and was growing at a rate of about 50% per year, according to Spargur. He says it is now approaching growth of about twice that rate.

The secret to Templock's packaging system is a synthetic material that comes in tubular form. It can be easily cut, slipped around a container, and heated. During the heating process, the material shrinks up to 50%, giving the container a tight, tamper-resistant seal.

Before the Tylenol scare, Templock's major customers had been dry cell battery manufacturers. The California wine industry was the second largest market, and makers of Christmas tree ornaments (decorated with heat-shrunk prints of Yuletide scenes) came in third. This year, says Spargur, the pharmaceuticals market will "easily slip into the top four." In addition, Templock is negotiating with all of the major food companies.

Spargur seems pleasantly surprised by all this interest. "I'm not one to expect opportunity to come knocking at my door," he says. Then again, he is not on to leave the door shut, either.

Toxic waste may be hazardous to your health, but it has done wonders for the health of St. Joseph Motor Lines in Atlanta. The 21-year-old trucking company hauls hazardous waste for smaller companies, whose business is often shunned by other carriers. According to traffic manager Tom Davis, revenues have increased at least 25% each year since the company took on the business in 1980. Last year, St. Joseph grossed approximately $6 million, about $300,000 of which came from hazardous-waste transport. More significantly, the company realizes a 15% profit on each shipment of toxic waste; for other goods, its profit margin is 10%.

In part, the higher profit margin reflects the fact that toxic-waste transport is a complicated business, requiring special insurance, containers, and labels. Then again, St. Joseph is able to charge more because nobody else in the area offers the service. "It was a classic case of finding a niche in the market that no one else was occupying," says Davis. Other carriers were more than willing to accommodate companies like E. I. Du Pont de Nemours and Monsanto Co., which had huge loads of toxic waste to transport, but "they left the little guys flappin' in the breeze."

Davis got the idea for the service back in 1979, when he learned that Congress was about to enact the Resource Conservation and Recovery Act governing the disposal of hazardous waste. At the time, there was talk of making the law apply to amounts of more than 450 pounds, that is, two barrels or more. "We called about 16 carriers in Atlanta and asked them if they would pick up two barrels of waste that we had," Davis recalls. "They didn't just say, 'No.' They said, 'Hell, no!' They told us that if a guy has less than five drums, or needs to go more than 50 miles, then he just doesn't move."

Davis then presented his findings to the Interstate Commerce Commission and received certification to transport hazardous waste. St. Joseph Motor Lines has been hauling toxic waste ever since. To judge by recent headlines, the demand for its services is not likely to decline any time soon.

In Detroit, they're calling it a depression. Around the country, automobile dealerships are dropping like flies. As of January 1, there were 18% fewer dealerships than 10 years earlier. For Tricom Systems Corp. of Hayward, Calif., however, business has never been better. And here is the kicker: Tricom sells exclusively to automobile dealers.

What Tricom sells are computer systems that allow dealers to streamline their service departments. Its success hinges on the fact that service becomes increasingly important as new-car sales decline. With customers keeping their old cars longer, dealers must rely on their service departments for a larger portion of their revenues. By providing high quality service, moreover, a dealer can maintain a relationship with the customer, who will then be more likely to return when it comes time to buy a new car.

All of this occurred to Gene Heckerman and his partners two and a half years ago, when they hit on the idea of producing a computerized time management system for automobile service departments. "All you have to sell [in a service department] . . . is time," says Heckerman, now president of Tricom. "If you have one technician working an eight-hour day, then everything you make is based on how much time he has, how much of his time you've sold, and how much of his time is left. Our system tracks every minute of his day, so none of his time is wasted."

Tricom's basic system is called Tri-Freedom I and sells for about $25,000. It is designed to improve service efficiency by scheduling appointments to keep the shop loaded to capacity, matching the right technician with the right job, and establishing shop standards. Tri-Freedom II, which costs about $40,000, does all this and also stores data about each customer's car, allowing the service representative to make better recommendations on service and repairs. With either system, Tricom also provides a consultant who installs the computer and shows the dealer how to maximize its efficiency.

According to Fleckerman, Tricom has sold about 250 Tri-Freedom I's since introducing the system in September 1980. Tri-Freedom II made its debut in February 1983, as of April 1, 12 had been sold. The buyers appear to be satisfied. "To say it's been a miracle is an understatement," says Mark Herrmann of Mark Buick Corp. in Yonkers, N.Y. Prior to installing a Tri-Freedom I last October, his service department had done all its scheduling by hand. "It was impossible to keep an accurate tab. We were experiencing a loss in productivity and -- I hate to say it -- an abnormal amount of customer complaints." Now the service department can schedule appointments down to the hour, "so there's been a cut in unapplied time."

Herrmann's customers are happy, since they are receiving better service. His service people are happy, too, because they get paid on an incentive basis. Herrmann himself is so happy that he has ordered the new Tri-Freedom II. And that makes Tricom happy.

All of which goes to show that, yes, it is an ill wind that blows no man to good.