Focus and Real Estate

1st Source Servall expands in Byron Center

October 8, 2012
| By Pete Daly |
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1st Source Servall team

Store manager Ken Allen and Mike Resma, warehouse manager, will make sure the more than 60,000 parts 1st Source Servall stocks will be delivered to the correct destinations. Photo by Michael Buck

Said to be the second largest home appliance parts distributor in the nation, 1st Source Servall has just opened a new distribution center in Byron Center and already has hired most of the 30 new employees it will require.

The 65,000-square-foot facility will hold more than $8 million worth of inventory and reflects an investment of more than $1 million in industrial equipment for high-tech warehousing and order fulfillment, according to Kevin Sullivan, chief operating officer.

"But we still rely a lot on the people who come to work for us from the Grand Rapids area," said Sullivan. "We had four jobs in Wyoming that we brought over to Byron Center, and we've added or are in the process of adding 30 new jobs in order to staff this facility."

Based in the Detroit suburb of Center Line, Servall has had a distribution facility in the Grand Rapids region for about 50 years, according to Sullivan.

In September, the move began from its previous 8,000-square-foot facility on 36th Street in Wyoming to the new location at 511 76th St. SW. It will be named The Kenneth Adler Distribution Center. The late Kenneth Adler, an innovator and son of the founder, was president of the company for 35 years.

Kim Adler, president of Servall, is the third generation of Adlers to head the company.

The new distribution center is the largest of the eight distribution centers Servall owns and operates across the nation.

"We are the second largest (appliance) parts distributor in the country," said Sullivan. He declined to release Servall's annual sales revenue.

"As we continue to grow in both the Midwest and nationally, it became apparent that we needed to increase our distribution capabilities and, after a close examination of our infrastructure and capabilities, it was clear that this location would best serve our loyal customers in the Midwest," said Adler.

The new distribution center will allow Servall to increase the number of its customers that can receive in-stock parts the next day via UPS ground delivery.

Sullivan said Servall has "a great partnership" with United Parcel Service, which handles the deliveries to customers and is why the Byron Center location was particularly attractive to Servall.

"It's less than five minutes from our facility to UPS," he said, referring to the UPS hub on Clyde Park Avenue near 54th Street in Wyoming, which he described as a "premier" UPS operation.

Sullivan said the UPS hub is one of six UPS facilities in the world that are fully automated, "which really helps our business a lot."

According to Chris Yohn of UPS, the 459,000-square-foot Grand Rapids hub was built in 1991 and employs 1,009 today. More than 243,000 packages are sorted at the hub each day and more than 60,000 deliveries are from there. The plant's automated system sorts and routes each package through the building to the staging area for its outbound load.

All new employees at the Byron Center facility will be trained by UPS as packers to reduce errors in shipping, according to a statement released by Servall.

The Adler Distribution Center maintains a stock of about 60,000 different parts for many brands of home appliances and HVAC equipment, including Whirlpool, G.E., L.G., Samsung, Peerless Premier, Dacor, Electrolux and Bertazzoni.

The choice of inventory is a critical challenge for an appliance parts distributor, according to Sullivan. Obviously, 60,000 parts isn't all of them.

"Believe me, if we tried to stock every SKU that the manufacturers have, we'd probably need a 500,000-square-foot facility. So getting the right inventory is a challenge," he said.

Servall "is really there to help our OEMs," said Sullivan. If an appliance arrives at the customer's address with a part damaged in shipping, "they expect us to have the parts that are needed to fix that in stock. So we have to achieve extremely high fill rates."

A "fill" is successfully filling an order as requested by the customer.

Sullivan said Servall supplies most appliance repair shops in Michigan, and it also has a significant number of do-it-yourself customers — individuals who are willing to try to fix their appliances themselves. Servall also supplies parts to big box stores that sell appliances.

Servall leases its new facility in Byron Center. The interior was built out for Servall by the leasing company, CORE Realty Holdings Management. The warehouse has 25-foot ceilings and eight loading docks, with eight miles of shelving to hold inventory.

Founded in 1929 in Detroit, 1st Source Servall is a third-generation, family-owned and -operated business, with branch offices and call centers located throughout the Midwest, Southwest, Southeast and Northeast. Its products are marketed in all 50 states and it has grown from 13 locations in Michigan and Ohio to 52 store locations in 13 states. The company employs more than 550 people around the country, with the largest numbers concentrated in Michigan and Texas.

Sullivan noted that some Servall employees have been with the company 30 to 40 years or more. One has 56 years of seniority.

The new facility will operate six days a week, with Michael Resma serving as distribution manager. The store will be managed by Ken Allen.

"We're excited," said Sullivan of the new distribution center. "We hope that as this facility takes hold, we're going to create even more jobs in the next 12 months."

That would be welcome news to the host community.

"Byron Township is very pleased to have 1st Source Servall opening its flagship distribution center in Byron Center, and we wish them great success," said Audrey Nevins Weiss, Byron Township supervisor. "I would like to thank the company for investing in our community and local economy."

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