As a child, Bill Carlton saw his father’s new industrial electronic supply company stock shelves of antennas, television picture tubes and vacuum tubes, an early form of the transistor.
More than 30 years later, semiconductors, fiber-optics equipment, transformers and bar code scanners have replaced the now-ancient vacuum tubes, and Carlton-Bates Co. has grown from one location on Little Rock’s Sixth Street to more than 30 locations in the United States and Mexico.
And for the first time, Carlton-Bates is among Arkansas Business’ Largest 75 Private Companies. With about $130 million in sales in 1998, the company, tied for 36th on the list, has grown since Joe Carlton and Doyle Bates founded it in 1957.
With about 500 percent growth in the past 10 years, Carlton-Bates is investing in new locations to encourage more growth.
Carlton says the company is planning locations in Albuquerque, N.M; Omaha, Neb.; Cleveland; Denver; Minneapolis; and Milwaukee. The company’s goal is to add one location per year, and it aims to be a $200 million company by 2001.
“Our goal is to grow,” he says. “Again, there’s a consolidation going on in all industries, and ours is no different. You’re either going to sell or buy, and we want to be a buyer.”
A New Era
When Bill Carlton became CEO of Carlton-Bates 15 years ago, he put his accounting skills to work and looked to other companies in similar industries for ways to improve the business.
“I relied on a lot of people,” he says, including his father, who was involved in the business until his death. “He was a good sounding board, a very wise, a very good business man, had a good heart. But then we relied on other people in our industry.”
Carlton says the company would visit other distributors and learn about their practices. They would take what they liked about other companies and apply them to Carlton-Bates.
“We would go out and visit other distributors — of all kinds — and try to learn, ‘What are you doing better than somebody else is doing?” he says.
The company still looks at the best practices in all areas of other companies — sales, collection, distribution — and tries to integrate those methods into its own business.
Carlton also works to improve Carlton-Bates’ inventory management system. To do so, he called on what he learned in college, as well as the latest technology.
“I was able to parley some of my skills as far as accounting, collections, resource management,” he says. “When I first got here, we had a good inventory system, but it could have been better, and that’s when we got into computerization, so we put everything on computers.”
Orders, inventory, billing, customer data, delivery time, sales volume and countless other bits of information pass through Carlton-Bates’ corporate headquarters in Little Rock via an IBM AS/400 computer system tucked away in a small room near Carlton’s office. It’s practically the heart of Carlton-Bates operations.
“Everything that goes through Carlton-Bates Co. in 30 locations and 18 states and Mexico goes right in that box in that room,” he says. “Like this morning, I can tell you what our sales figure are, not by the minute, but by day to day, and projected what they’re going to be at the end of the month. We know what our backlog is, we can tell where weaknesses are, where strengths are.”
Carlton-Bates needs an efficient system of inventory management to help the company keep up orders and inventory. The warehouse at its corporate headquarters in Little Rock moves more than 1,000 packages a day. But the system also keeps Carlton-Bates in sync with product development. Though some products remain the same, some, like semiconductors, change frequently.
“We’re a technical-sales-type business. Our biggest gotcha is our inventory,” Carlton says. “And if we make any mistakes in it, because it’s a high-tech inventory, it has a tendency to go sour. The re-invention of our inventory happens about every 18 months … We have to be on top of our inventory.”
Carlton says computers also help the company tailor different services to different customers
“We’re customizing our services for our customers. And that’s one thing that computerization has helped do, because everybody’s different”
For example, Carlton says, if a customer has a bill of materials with the company, and they need 100 parts on the 10th and 15th of every month, Carlton-Bates can keep up with their bill of materials and modify the orders if the customer needs to change.
“Because he can download [the bill of materials] to us, and we can see if he’s using that 100 every two weeks like he said he is,” Carlton says. “If he doesn’t, then we can change that scheduling. I think it can be a lot more user friendly for him and us, and take a lot of the daily toil out of inventory management and materials management.”
On the Net
Carlton says the computer has helped inventory management greatly, and the Internet has allowed the company to offer information and convenient ordering for customers.
“You can place orders with us right now on the Internet,” he says. “And we have several customers we have special contract pricing with, and they’re able to place their orders on the Internet, and it just prints out a ticket in the warehouse.”
Carlton also uses EDI (electronic data interchange) technology, the norm in the automotive industry, to receive orders. He says only about 5 percent of his customers are Internet savvy, but he thinks the Internet is worth exploring as a new method of staying in touch with customers.
“We don’t think the EDI’s going to go away, but we do think the Internet is going to come on strong, and we’re ready for it,” he says.
Carlton-Bates’ web site, at www.carlton-bates.com, allows users to search product listings, order catalogs, read about new products and make orders. But Carlton does not see his site as one that eventually would replace sales personnel.
“If you have a complaint, or something doesn’t go right, you want somebody to talk to. How can you fix it? Typing in an e-mail on a terminal doesn’t do it for me. I like to pick up the phone and say, ‘Hey man, I’ve got a problem. Can you help me?’ “
Looking Ahead
As for going public, Carlton says he can’t speculate. But now, it seems, going public is not a move Carlton-Bates has to make.
“The reason you go public is to raise money. We have not had any problem raising money. Now I know every banker in the world, I think,” he says, laughing. “We definitely have borrowed money, but we’ve been able to satisfy our bank’s requirements and borrow money very effectively.”
In the immediate future, Carlton says he plans to add to his warehouse and corporate headquarters in E. 69th St. The 50,000-SF addition will contain offices and a large meeting room.
The addition includes about 30,000-SF of warehouse space, which, 30 years ago, could have held tons of Joe Carlton’s vacuum tubes.
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