Quantum Storage Systems: Dean Cohen

IndustrialSage

Dean Cohen of Quantum Storage shares how much the company has been able to grow while avoiding a lot of common industry pitfalls.

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Danny:

– Well hello, and welcome to today’s IndustrialSage Executive Series. I am joined by Dean Cohen who is the vice president of Quantum Storage Systems. Dean, thank you so much for joining me today on the Executive Series.

Dean:

– My pleasure. Glad to be here.

Danny:

– I’m glad to have you on here. First order of business for those who are not familiar with Quantum, Quantum Storage Systems, tell me and our audience who you guys are and what you do.

Dean:

– We are a manufacturer of plastic storage bins and storage containers. We marry it up with wire shelving systems and supply to a wide array of customers complete storage systems in any way to organize your space.

Danny:

– Great, yeah. I imagine you’re in a whole host of different industries and niche segments. Can you give us a little bit of a flavor of that?

Dean:

– We’re fortunate to cater to a number of different markets. The markets include industrial and material handling, food service, medical, supermarket, food service, electronics, retail. There probably isn’t an industry or a sector that probably is not using or organizing with storage bins.

Danny:

– Gotcha. You said you’re a manufacturer; you’re manufacturing those as well. Where are those facilities where you manufacture?

Dean:

– We do all of our manufacturing of all of our bins here in Miami. We’ve been doing that since 1988, so we’ve been doing it a long time and have our own injection molding company here in Miami where we manufacture all the products.

Danny:

– That’s great. Okay, well cool. I think we’re going to jump into a little bit more some challenges, some things I imagine that just like everybody and all the manufacturers, no one’s been left untouched relative to Covid. I’m sure there’s been some challenges but also some great opportunities. But before we jump into all that, I’d really like to know more about you. I want to learn a little bit more about Dean. This is where we focus on the executives that we have on here. So tell me, how did you get into this space? Take me way back.

Dean:

– I’m very, very fortunate that my father who was a very, very large influence on me was always involved in plastics and introduced me to the plastics world when I was a teenager. I had an opportunity to come into a custom injection molding business when we were looking to begin our own product line and our own name brand which was the origins of Quantum. That was my original foray or entrée into the business when nobody knew what a Quantum bin was or nobody had any idea that Quantum even manufactured storage bins. Those were my original beginnings, and very lucky to be where I am today.

Danny:

– Is this a family-owned business?

Dean:

– It is.

Danny:

– Okay, alright, and so your father started it; is that what I understand?

Dean:

– My father and first cousin.

Danny:

– Oh, excellent. Are they still involved in the business?

Dean:

– My first cousin is. Yes, he is.

Danny:

– Okay, excellent. So you got in really, you said you were young. You were a teenager. Was it 16? Was that right?

Dean:

– That was my original entrée. I came out of college actually having nothing to do in the business world. I was actually a tennis player, and all I wanted to do was play tennis and travel the world playing tennis.

Danny:

– Oh, well what happened?

Dean:

– I reached the point where I decided that that was not going to be my final economic or final career move. I had always been intrigued with the business world and had always had a lot of interest in pursuing some of those endeavors. I came in basically in my mid-20s. Been here since then.

Danny:

– Wow. That’s awesome. I’m sure you’ve seen just a ton of change. I would imagine—and I’ve heard similar stories—that, especially with a family business, that maybe initially, hey, this isn’t the path that I wanted to go, and you come in. In some cases that there is a moment, that there is—I don’t know if, call it a light switch or just a hey, you know what? I really enjoy this. I didn’t think I was going—obviously you said you wanted to go do tennis. Did you have that moment? Was there a moment where you’re like, this actually—I really like this. This is cool.

Dean:

– You become fully immersed into it from the start. You’re extremely motivated. Coming from a competitive athletic world, I always had the mindset of liking to win and liking to compete, sometimes for better or worse. It was a very humbling beginning, coming out when nobody knew much about us. We had a great opportunity and a great space to get our product line and our products out to market. I loved the challenge. I loved the traveling. I loved the trade shows. I loved meeting people. Those were the origins, and that’s what actually I feel made Quantum a different company than most. We competed against companies that were quite a bit larger than us, had been around for a long period of time, a little bit of the old adage of the David and Goliath, if you will. Nobody knew us very well, but we worked hard. We built a product line today that is amongst the largest in the marketplace. We have a brand name that’s very successfully recognized that we’re very proud of.

Danny:

– That’s fantastic. Congratulations on that. That is no small feat. Obviously you’ve seen a lot in your career there, so do you have any—for those who are watching or listening, we have a list of questions. Big surprise, right? I want to ask you a question that’s not on the list, and I’m curious. I think you said you’ve been here 26 years. Does anything come to mind in terms of massive challenges that you’ve had to overcome in the business, the organization, or maybe even in your career that was a big, triumphant, big obstacle that you had to clear? Does anything immediately jump out?

Dean:

– Managing expectations. I would imagine in any business environment you have your ups and downs. You’d love to always think and feel that you’re always going to be successful and everybody wants to be successful. That’s not always the reality of what happens out there. You do win and lose, whether it’s accounts, whether it’s orders. We’ve had our fair share of disappointments, if you will, but as a group and as a team and I’m very proud to say that the people that are at this company, we probably have in excess of 50 to 60 individuals that have been with us from the beginning, 20 years plus, which is amazing. The overall milestones have been sort of managing expectations to reach the next level, whether it’s a dollar threshold, whether it’s a number of bins that we’ve sold, small, little things. Last year we were able to sell—this current year we were able to sell more than a hundred million containers, which is pretty cool. It’s a lot of bins that get sold into the marketplace. That’s not something that I thought we were going to ever be able to accomplish when I think about those sorts of numbers 25 years ago.

Danny:

– A hundred million last year. Obviously there’s a stat that I’ve heard that ecomm in 2020 grew by 40% I imagine from storage containers, totes being, I imagine, one small part of it. Then just as ecomm is growing almost exponentially, it feels like. From a capacity standpoint, before Covid hit and you said you were delivering a hundred million, were you stretched for capacity? What did that look like?

Dean:

– The history of the business has always been a little bit bursting at the seams. We’ve had a very aggressive sales force, a very aggressive and successful marketing team that has pushed our product very nicely into the spaces that we sell into today. We have a nice background and history of always being very competitive in the products that we manufacture and how we take it to market. In the early days we had eight injection molding presses. Today we have almost 60. The footprint to hold all of our inventory, we started originally in probably 75,000 square feet. Today we’re close to 1.2 million square feet. Managing the capacity has always been, we’ve always been in a growth mode, but growth within limits. We see many companies or many experiences that grow without bounds, and you don’t take care of orders or business environments that make sense for you as a company. Some of those we’ve learned through the years, and we try to make the right business decisions that have kept us on the right track of growing responsibly, which we feel we have.

Danny:

– That’s great. How many total employees do you have?

Dean:

– Today, almost 400.

Danny:

– Okay, and you said that 50-ish have been there since the beginning.

Dean:

– Yeah.

Danny:

– That’s pretty remarkable. Why do you think that’s the case?

Dean:

– We’re a family. I know that probably gets used over and over. We literally are a family, but it’s an extended family. I’m very proud to say that one of my greatest joys of the business is visiting all parts of the manufacturing portion to the warehouse portion to the office portion and knowing everybody by their first name. I love that. You come to know each other’s spouses and kids and the things that are even as equally important as the business world. I think that as a business unit we’ve grown nicely, but we’ve also protected and taken care of our “family.”

Danny:

– That’s awesome. That’s fantastic.

Dean:

– Thank you.

Danny:

– That’s a great story. Obviously within the last, we’ll call it close to two years at this point now, maybe a year and a half, especially when this episode releases, we’ll go back from March of 2020 when the world kind of stopped, and you’re saying that you guys cranked out a hundred million storage units—I’m saying that correct—containers—there is massive supply chain issues right now, and labor is a big issue. How have you guys managed that?

Dean:

– It hasn’t been easy. A big portion of our product line is wire shelving. Wire shelving is products, for us, that is manufactured offshore. We deal with a number of factories offshore. Today we’re importing close to 1000 containers a year from offshore, so managing the supply chain is a tremendous understatement of the year. That has been very, very challenging in itself. Fortunately we have a good team that was—I don’t want to say ahead of the curve, but it didn’t come as much of a surprise to us to see some of the challenges that were forthcoming. We had always been a company that believed very strongly in large inventories. The key in our industry that has been successful for us is having availability to ship your products quickly. Again, it’s probably an adage that gets used maybe too often, but if you have product that is well-priced and can ship quickly, you’re going to be successful. That has been Quantum’s “magic sauce” which is not a secret sauce by any means, but one that we’ve invested in. We’ve grown our infrastructure. We’ve grown our footprint from a manufacturing space to a warehouse space. And we’ve made sure to have our products available for our customers. As the supply chain challenges came on board, we were already heavily invested into lots of inventories. Fortunately we have good relationships with our factories and families offshore that we have suffered probably a little bit less than most with respect to not being able to get product or being significantly delayed. And while it is happening, we’re not nearly as affected as many in our space.

Danny:

– That’s great. It’s interesting; I posed a question—we were at a show a couple weeks ago, and I was curious about this, about people’s thoughts on specifically lean manufacturing. Have we gone too far? Have we gone too lean? You mentioned having a lot of inventory on hand. Obviously if you’ve got finished goods that are ready to go, there’s obviously a distribution component to that. I would say, it seems a lot of manufacturers have—let’s not keep a whole lot of inventory on hand, whether it’s raw goods to finished goods. It seems like you were incredibly well-positioned to be able to absorb some of that shock from the supply chain.

Dean:

– Our whole executive team felt that the key through all of this as things were going to tighten up was to always invest heavily into our inventory. We knew it was going to be an impact on cash and an impact on holding costs. We felt that it would pay significant dividends, which is has.

Danny:

– That’s fantastic.

Dean:

– So we feel it was the right decision.

Danny:

– Well, it certainly was. I could say 100%, so congratulations on that. Moving on a little bit more, we talked a little bit about challenges in the industry. Obviously the supply chain, labor is big. What are some of the new challenges that you’re seeing on the horizon as Covid’s, we’re kind of coming out, and there’s a lot of different things going on right now? What are you seeing as an industry as a whole are some challenges?

Dean:

– The nature of our customer base is changing a little bit. I think it’s been a very challenging environment to some of the smaller players that are out there. We continue to see some of the small players, if you will, not being as relevant or having a much tougher time to survive in the current environment. We’ve continued to see consolidation, and some of the age-old, the big are getting bigger, becoming more dominant. What it calls for us to do is just to stay true to our commitment to our distributors in making sure that they’re protected, big or small. You can’t be the masters of all the circumstances of whether other business or other companies survive or don’t survive, but you try and make sure that, as their supplier, you do right by them and you price them right. You ship for them quickly. You make sure that they get prompt answers to availability of product and when their orders are shipping. And if you make good, sound business decisions, you’ll have a good, loyal following, and that’s what we’ve noticed. So while we have probably, like most companies, probably lost some customers in the last 18 months due to the nature of the environment, things for us have remained still robust and busy, and we’re excited about the year ahead.

Danny:

– Yeah, who would’ve thought? Who knew what was going to happen in March? It was very scary times. We’re starting to wrap up now. What are you doing yourself to stay ahead of your game and to grow as a leader, personally, in your career? What are you doing?

Dean:

– As a business, we’re making significant investments into the digital space. It’s no secret that some of the old-school of the way things used to get done, you need to change with the times. It’s critically important that we stay up-to-date with technology, with digital content, with enhanced content, that our product is very easily found within search engines when our customers are selling our product in their online platforms that our images are presented well, our application images are shown well, our 3D rotations of the images present well, and that basically customers, when they’re searching for our type of product and looking for storage bins or looking for storage solutions, that they come across Quantum’s range of product which is easy to navigate, easy to find through, easy to click through. And then again, at the end of the day, I’d like to believe my bin is the most beautiful bin on the planet, but it is critical that it’s sold at the right price and that it can ship quickly. We have found that those two things we’ve married nicely. And as long as customers and companies can find our product and represent our product well, and then they know they have a good solution that they’re going to get priced competitively and the product’s going to be available for them and available quickly, and communicated very quickly as far as with tracking, you’ve got a winning solution.

Danny:

– Absolutely. Well that sounds like you have quite the operation going on down there. Next time I’m in—you said you were in North Miami, Florida, I’ll have to come stop by. I’d love to come check you guys out.

Dean:

– It’s a nice area. We love it.

Danny:

– I’ll come in the winter. How about that?

Dean:

– We have two temperatures: hot, not as hot.

Danny:

– There you go. That makes a lot of sense. Dean, listen, thank you so much for your time. For those who would like to learn more about you, they can go to quantumstorage.com. Is that accurate?

Dean:

– It is.

Danny:

– For all your storage needs, sounds like they’ve got quite a few things going on. Again Dean, thank you for spending some of your valuable time with us.

Dean:

– My total pleasure. Thank you.

Danny:

– Alright, well that wraps today’s IndustrialSage Executive Series interview with Dean Cohen who is vice president of Quantum Storage Systems. You can check them out, quantumstorage.com, if you have any needs there. Sounds like they’ve got quite an impressive company. I loved hearing about the culture and the history and their response through the pandemic and how it looks. Things are very bright for them. It’s great.

That’s all I’ve got for you today. Thank you for watching or listening. If you are not subscribed, I highly recommend getting on our email list because you’re missing out on great content like this. I will be back next week with another episode on IndustrialSage.

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