Independent Profile: Espy Lumber Co.
The bridge to the mainland changed everything.
The year was 1958. Wesley Espy’s concrete plant had been supplying developers and contractors who were beginning to transform sleepy Hilton Head Island into a world-class tourist destination. That’s the year that Charles Fraser, known as the father of Hilton Head, asked Espy to open a building supply business to support development.
The rest is history.
See for Yourself in October
Espy Lumber the 2022 Independent ProDealer of the Year as recognized by HBSDealer and the National Lumber & Building Material Dealers Association, will play a significant role in the 2024 ProDealer Industry Summit, coming to nearby Savannah, Georgia Oct. 9-11.
Attendees can see the yard with their own eyes during a yard tour hosted by Espy staff and the event organizers.
Find out more and register for the Savannah summit at prodealer.com.
“It’s hard to imagine how many projects we’ve been involved in through the years on this island,” said Mike Reeves, president of Espy Lumber. “And we’re still the only building supply business operating on Hilton Head proper.”
It’s a proud distinction, but far from the only distinction for the two-location supplier of the South Carolina “Lowcountry.”
The value-enriched, customer-focused dealer is engaged in a number of growth-oriented improvement projects, near the top of the list are an expansion of installed sales, and the roll out of a customized Six Sigma program.
Both initiatives feed off the company’s problem-solving culture.
In the case of installed sales, there was a time when Espy was receiving too many phone calls that complained about a product that was sold by Espy but installed improperly by a builder or a framer. “We’d go out and re-install the product, but we wouldn’t get paid for it,” Reeves said. “So we decided there had to be a better way. And that’s when we started installing doors, because we didn’t want to deal with that call back. And those callbacks stopped.”
Under the direction of Tim Hurd, the installed sales program has ratcheted up, generating millwork sales growth as it provides an additional service to Espy customers.
Hurd describes the “trust factor” as a critical component of installation services. Every window manufacturer has unique installation requirements, and Espy makes it their job to follow their specifications.
“The customer knows they’re doing business with Espy Lumber, instead of two guys in a pickup truck or a framer,” Hurd said. “When you think about it: is a framer really the right guy to be installing $100,000 worth of windows?”
In the Hilton Head, six-figure window jobs and replacement projects are no exaggeration. Hurd described a $5 million 25-year-old house on the beach where a package is above six figures, and installation will run another $50,000.
“Those doors are opening to us,” Hurd said. “I’ve quoted three houses like that in the last two weeks.”
Regardless of the size of the project, success will be shaped by the details, processes and company culture that set the stage. And that’s where the ELCE program fits in. The customized LEAN management program is a major initiative at Espy. It’s a measurement-based strategy designed to promote continuous improvement.
The E-L-C-E letters represent Evaluate, Learn, Control and Execute lead to standard operation procedures that include written manuals for each department, identifying waste in the process and continually working to reduce the number of steps and time it takes to reach a positive customer experience.
Espy’s management toured both the Hilton Head Island and Okatie locations, focused on what can be done to improve process flow — in accounting, in operations, in sales.
According to Rob McKean, who is co-leading the ELCE project, initial examples of metrics to measure include truck returning times and first outs. “We’re committed to find our spots embedded in operations where we can improve our efficiency,” he said.
The ELCE program even has a mascot: Studly Doright, who says, “Be sooo good they cannot ignore you.”
Espy Lumber, where sales have grown to over $50 million in 2021, operates two locations. There’s a five-acre “bulging at the seams,” site on Hilton Head Island that replaced the original yard in 1972. And about 25 miles inland is the new Okatie facility, opened in 2001. Eight outside sales representatives work the Lowcountry.
There were two good reasons for the Okatie expansion, Reeves said. First, the Okatie site provides a business safety valve against possible storm damage on the island. And two, Okatie is a springboard to new markets. “This location was in front of the expansion that’s going on today,” Reeves said. “We needed a place where the business was moving to, Beaufort and Savannah, as well as serve Hilton Head.”
A sizable competitor sits just around the corner from Espy’s Okatie yard, in the form of a Builders FirstSource. Espy is no stranger to competition, and Reeves said it will focus on what it does best to serve its market. The company’s sweet spot is the single-family new-custom home builder. “You can’t be everything to everybody,” he said.
The company’s success is recognized in Fort Wayne, Ind., headquarters of one of Espy’s distributors, Do it Best Corp.
“When it comes to lumber and building materials in the Lowcountry, no one does more to serve the needs of area pros and contractors than Espy,” said Dan Starr, Do it Best Corp. CEO.
Frank Fletcher is Do it Best territory manager. “When you walk into either of their locations, it’s a busy place with smiling faces, neat and clean sales floors and impressive showrooms displaying the building products they promote,” Fletcher said.
The sustainable competitive advantage for Espy isn’t just the experience of the team. It’s the way the various experiences feed off each other.
“Our experience is very broad, and we all excel in something different,” said Henri Madlinger, an all-around lumber industry veteran who heads up commercial and marine business. He pointed to Reeves who rose to president from an outside sales position; Don Owens, a specialist in millwork; Nancy Phillips, who brings 25 years accounting background, and Tim Hurd, who excels in communication with customers.
The confluence of experience pays off every day.
“We’re in a custom home builder market,” said Owens, the sole member of the management team who personally knew founder Wesley Espy. “And it can be complicated. It’s easy to make a mistake, and that mistake could end up costing $50,000 or $100,000. You really have to know what you’re doing out there.”
