Sierra Pacific Engineering and Products

Sierra Pacific Engineering & Products is Navigating Success Through Innovation, Employee Ownership, and Exceptional Service

Business View interviews representatives of Sierra Pacific for our focus on Employee Owned Companies.

Sierra Pacific Engineering & Products (SPEP) exemplifies a commitment to innovation and reliability within the industrial hardware components sector. As a well-respected designer, manufacturer, and distributor on a global scale, SPEP caters to the needs of OEMs and hardware distributors, offering a diverse range of products. Headquartered in Long Beach, California, with strategically located distribution warehouses in Chicago, Illinois, and Dallas, Texas, along with company employed sales representatives in Wisconsin, Utah and Indiana, and an advanced production facility located on the East China coast, Sierra Pacific is well-positioned to meet the demands of a broad clientele. Serving customers ranging from small operations to Fortune 100 companies across diverse industries such as enclosures, transportation, HVAC, and more, Sierra Pacific is a trusted partner worldwide.

The Employee Stock Ownership (ESOP) Decision

Barry Stein, President

Barry Stein, President of SPEP, sheds light on the pivotal decision to convert the company to a 100% ESOP. He says the decision was rooted in the company founder, Larry Mirick’s desire for continuity and future success in the company he had built. “He was very employee centric. He cared a lot about the employees and that was always a major consideration,” relays Stein, noting that there were also tax implications that made it an ideal option, allowing him to remain on the board of directors, where he still sits today. Scott Snider, Business Development Manager, adds, “Our founder started the company back in the 80s, and it’s kind of his baby. So, I think rather than selling it off, and he probably could have made more money that way, converting it to an ESOP was the best way to see it thrive beyond him.”

The ESOP Impact

After the decision to convert Sierra Pacific to an ESOP, it became part of the marketing strategy for the company. Trademarks such as ‘Quality and Service, Taken Personally’, and ‘Employee Owners Care More, Do More’ are part of the branding, along with the term 100% Employee Owned. Snider elaborates, “If you go on our website, the first thing you see is that we’re employee owned, it’s kind of our calling card. I think it’s the thing that differentiates us the most versus any of our competitors. Our industry in general is pretty conservative, pretty old school, so I think a lot of people really like that beyond just saving them money or giving them good parts, it’s an organization that puts its people first.”

Stein continues, “That’s a big part of our messaging, that no one else will care more about their customers than Sierra Pacific, because everyone benefits from the success and the gains of the company. And everyone does really take it personally. Our customers have the benefit of that.”

As for the impact the ESOP has had on Sierra Pacific as a business, Stein conveys, “It’s definitely helped fuel the growth, steepen the growth curve, we’re definitely able to recruit and retain top talent because of it. We really are building retirement wealth for all the employee owners and once everyone gets into the program and sees the benefits of it they tend to stay. We have very little turnover.”

Customer Satisfaction and Recognition

Sierra Pacific’s exceptional customer satisfaction, evidenced by a remarkable 99.5% recommendation rate for five consecutive years, can be attributed to the personalized commitment of its employee owners. With a strong focus on the ESOP, everyone in the company, from sales to accounting, takes customer service personally. This dedication is ingrained in the company culture, fostering a teamwork mentality where every department collaborates seamlessly to prioritize customer needs. “The customer is king, and we’re always going to do our best to provide superior customer service. That is another way that we differentiate ourselves from our competition,” says Stein.

Snider points out that this commitment to exceptional service is something that is highlighted during employment interviews. He explains, “One of the things I lead with a lot of times is that because of the ESOP, and because of the teamwork mentality that we have, the ‘that’s not my job’ mentality doesn’t really work around here. Everybody is always focused together at achieving the same goal. It’s not like departments are working against each other. It’s all to serve the customer.”

SPEP has also received awards from customers, as Stein recounts, “Typically we’re a lower level component supplier for our customers. We’re not one of their huge suppliers, but they still recognize our efforts. One example is we received an award called the small fry award. We’re not one of their huge vendors, but they still want to recognize our performance and our accomplishments.” The company is also dedicated to giving back, offering a scholarship for aspiring engineers in the local community.

Supply Chain Excellence

Sierra Pacific has been utilizing Oracle, a comprehensive enterprise resource planning (ERP) system, to manage its inventory needs since 1998. With a focus on data-driven decision-making, the company uses Oracle’s advanced supply chain planning tools and material requirements planning (MRP) to maintain historically low stockouts, staying below 3%. “We’re in the business of having parts and having inventory. That’s the business we’re in and we always carry a lot of inventory,” says Stein. “We’ve got data going back to 1998. We’ve got better data and analytics than any of our customers. So, it’s another differentiator to them.”

Underscoring the importance of being a dependable trade partner, Snider stresses Sierra Pacific’s commitment to ordering quantities that work for both Sierra Pacific and its customers. Their business model centers around economies of scale, ensuring consistency in high-volume, repeat business, and adopting a just-in-case inventory approach rather than just-in-time. “We’re about consistency, he maintains. “In general, we don’t care so much about our inventory turns, we’d much rather have enough parts to cover our customers than to run out. That’s part of our service and value add, keeping a lot of inventory on hand for our customer’s needs.”

Dave Mochalski, CEO, details, “We’re sophisticated enough to deal with the very large organizations and all their expectations, and we’re efficient enough to satisfy the smaller customers as well. So that makes us a little bit unique. With our engineering team, half of what we do never appears in our catalog, because it’s some kind of custom design that we’ve done on behalf of our customers, with our customers, or for our customers. The talent we have in the engineering team is really extraordinary and helps us bring a lot of value to the company.”

Looking to the Future

As for what comes next for Sierra Pacific Engineering & Products, Mochalski envisions continued profitable growth, sharing the company’s preparedness to handle expansion. He imparts, “Everything has gone very, very well, for many years here, and we plan on continuing that legacy. What we’ve been working on for the last few years is to expand our capacity to make sure we’re ahead of the growth. We’ve done that with all of our facilities, and we’ve done that with our hiring to be prepared to continue to grow.” The ongoing vision is not only to grow the business but also to uphold the ESOP structure, delivering significant benefits to employee owners.

“Like any company, our mission is to serve the stockholders. And for an ESOP, that’s ourselves,” Snider acknowledges. “So, everybody’s working to grow the company, and grow their own personal nest egg along with that. That’s really always the goal, is to keep that chart going upwards. How we do that is in a lot of different ways, landing and expanding business with current customers, taking business from the competition, getting better at what we do, and just serving all of our customers as best we can.”

Stein concludes, “We’re always going to expand the scope of our business and grow. But we also want to continue to maintain the ESOP and be able to provide the great benefit to the employee owners.”

AT A GLANCE

Sierra Pacific Engineering & Products

What: An employee owned, global designer, manufacturer and distributer of hardware components

Where: Corporate Headquarters in Long Beach California

Website: spep.com