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Red-White Valve Corp. Competing on an International Scale... One Customer at a Time
Greensboro, Feb. 26, 2013 – “We are a valve company,” says Jerry Priest, Vice President of Sales for Red-White Valve, during a recent interview in the company’s national headquarters, located in California’s Orange County. Priest seemed to think that statement sums up their company: One vision for a singular purpose, creating and delivering high quality valves. However, after spending time with Priest at the Lake Forest Headquarters, it’s apparent that Red-White Valve Corp. is more a well-oiled, lean and prosperous, customer-oriented team that happens to be a valve company.
Being “a valve company” in today’s world means designing great products that plumbing contractors need and then manufacturing and delivering those products to market in a cost-competitive way. That means Red-White Valve Corp. must operate on a worldwide stage. But to better understand the company today, it’s helpful to look at its history.
An International Lineage
The year 1971 was a pivotal year in valve manufacturing. That was the year that an Italian by the name of Savino Rizzio launched Valvodinustria Ing. (VIR) to manufacture ball-valves a half a world away in Italy. At the same time, Mitsui Corporation, one of Japan’s largest companies, was partnering with Toyo Valve in a 70-30 partnership forming Red-White Valve Corp. with the goal of capturing a share of the growing North American valve market. By the late 1980s, Rizzio’s company was supplying the entire line of ball valves to Red-White Valve Corp. with the balance of Red-White’s product line (gate valves, globe valves and check-valves)
Fast forward to 2003 and Toyo had decided it was time to sell its 70 percent stake in Red-White Valve Corp. to Rizzio’s VIR, a ready and willing buyer. Three years later, Mitsui followed suit, and VIR became the sole owner of Red-White Valve Corp..
Today, Red-White Valve Corp. is under the watchful eye of Savino Rizzio and his son, Giovanni Rizzio. The Rizzios spend most of their time in Italy where they employ some 300 people at the manufacturing facility which sells not only to the North American market but also to Europe, the Middle East, Africa and Russia. The Red-White Valve Corp. US operation accounts for about 20 percent of the company’s overall sales.
Manufacturing Off Shore
Red-White Valve Corp.’s goal to provide plumbing contractors with top quality valves at the most competitive price drives every aspect of its business. The home office in Italy provides the engineering talent to bring new valves to market or refine manufacturing techniques on existing products. Most of the ball valve stock (through 6 inches) is produced in Italy, while virtually all of the manufacturing of the Butterfly (from 2 to 48 inches) and Iron gate valves (up to 18 inches) are produced in Red-White Valve Corp.’s wholly owned Ningbo, China plants where a team of engineers keeps a keen eye on the manufacturing process in that plant to assure consistently high quality. Its team of employees is well attuned to the challenges of inventory control that are created by the off-shore manufacturing.
Getting the Product in Contractors' Hands
It doesn’t matter how high the quality of the valve or how competitive the price if you don’t have the valve available when the contractor needs it. That seems to be the mantra of every Red-White Valve Corp. employee. Shipment of product from Italy and China takes weeks so careful inventory control is key. “Every once in a while we’ll run out of a product” says Priest, “but it doesn’t happen often and we try to keep it from happening ever.” A recent order of ball valves that totaled $50,000 “wiped us out of two sizes,” he explains “but that was a rare event.”
“We have our ‘A’ items, the ones we sell consistently everyday… our fast movers… and we don’t run out of those. We also have our ‘B’ and ‘C’ items which don’t get ordered on the scale of our ‘A’ items… for instance, an item that we might only sell 20 in a year’s time. But any item a contractor needs, even if we consider it a ‘B’ item, is an ‘A’ item to that contractor when he needs it” which is why they go to great lengths to make sure they fill every need of their customers even when it cost them more to do it.
This starts with a lean but well designed distribution system. Red-White Valve Corp.’s headquarters in Lake Forest, CA enjoys close proximity to the nation’s busiest port in Long Beach, so it is an ideal location for their main warehousing and management facility. Most weeks as many as four to five containers arrive with new products from Italy or China. The containers are rapidly unpacked and repacked for LTL shipment to their eight warehouses across the country plus their East Coast Distribution Center in Pennsylvania.
Lake Forest headquarters which quickly determines which facility is geographically closest to fill the order. And here is where Red-White Valve Corp. shines. If a large order comes in and no single facility can fill it, then Red-White Valve Corp. does whatever necessary at whatever cost necessary to fill the order in the least possible time. Orders entered by noon each day ship the same day. If multiple facilities must be called to fill a large order, Red-White Valve Corp. will ship (or UPS, if necessary) to complete the order. “We don’t want our customers to wait,” says Priest, “If they need the product, they need it now, and we want to meet their need. Customers don’t like it when we run out of product.”
Red-White Valve Corp.’s nimbleness at managing inventory and filling orders is being put to the test with the changes mandated by new Federal Low lead Regulations (Fed Law 111-380). The law will become effective January 4, 2014, and the increased cost of manufacturing these low lead valves will be passed on to the buyer regardless of who is manufacturing the valves. The trick is managing inventory during the switchover. Switching to low lead valves too soon will price Red-White Valve Corp.’s valves out of the market. Switch too late and Red-White Valve Corp. will be left with unsellable, obsolete products in inventory. How well Red-White Valve Corp. manages the transition could significantly impact the 2013 bottom line, but Priest believes his team will weather the storm, since Red- White Valve has been involved in the manufacture and distribution of lowlead certified valves since 2009, due to its presence in the California market.