All in the Family 1316

May 1, 1998

10 Min Read
All in the Family

Susan DeGrane

When Blanca Colon, a sales representative for Speedway Disposal & Recycling Inc., Bensenville, Ill., discovered that a prospective client liked cigars, she brought him some. "He was really impressed," she says. "We got the account."

Colon also discovered that a box of doughnuts and fresh coffee go a long way toward breaking the ice with construction foremen.

At about 10 a.m., when work crews take their break, Colon opens the box of donuts, introduces herself and asks a few crucial questions about whether Speedway's construction debris collection services might be needed. She also inquires as to the whereabouts of other new construction projects and often obtains several leads.

These friendly tactics may seem incidental, but John G. Stob Jr., president of Speedway, insists they are not. Instead, they allow the family owned business to remain competitive in a business climate where small independents are being rapidly devoured by mammoth solid waste companies.

Parlaying the personal touch of the family owned business is Stob's goal. "I want us to be the Nordstrom's of the garbage industry," Stob says. "I want there to be pleasant surprises continually. It's the little things people don't expect beyond reliable service that keep them loyal customers."

As an example, Stob recalls that a customer once called about an expensive electronic component he had disposed of accidentally. "Our driver picked through the entire load and found it," Stob says.

With 80 employees, Speedway serves both residential and commercial customers.

Its slogan and philosophy, "There when you need us," has allowed it to grow and see many changes - from annual sales of $40,000 in 1955 to well in excess of $10 million today.

Speedway originated in 1954 as Rex Disposal Co., an ash removal and trash collection operation that served the north side of Chicago. Stob's grandfather, George Stob, founded the company and named it after his dog, Rex. For 40 years, the name stuck for the company's Bensenville operation.

George Stob's son, John G. Stob, provided the labor for the ash collection operation. "He had to go down into the basements and bring these drums and barrels of ashes out on his back," says John Stob Jr. of his father. "It was very labor intensive." John Stob (senior) later managed the company and remains involved in its operations.

Although the Stob family eliminated ash collection from the business decades ago, it has continued to expand in the areas of trash collection and recycling, as well as in construction debris collection.

Recently, the Bensenville facility, which now serves commercial accounts, changed its name from Rex to "Speedway," the name used since 1962 by the family's collection operation in Geneva, Ill. Sharing the Speedway name and management team, the two operations now claim to be functioning more in unison to serve their combined 6,000 customers.

"In selecting the new identity for Rex, we asked our customers why they used us," Stob says. "They say, 'You guys are quick.' So, 'Speedway' seemed a natural [name]."

While the business of Stob's grandfather's era was extremely labor intensive, today's business is extremely capital intensive, Stob says. "We have a lot of money in trucks and containers. Every time we add a stop, it's $250 for a new two-yard container."

Stob acknowledges seeing the extinction of neighboring family-owned independents due to more stringent regulations and higher capital investment costs, but he remains undaunted as to Speedway's future. "I think we do things that other larger companies don't - like returning calls promptly and solving problems quickly," he says. "There are certain service advantages for the customer who taps into a smaller organization."

Speedway's management team consists of Stob and his three brothers-in-law: Pete Folkerts, vice president, who leads the company's innovations in the market; Ron Kovar, vice president of operations, who manages the company's drivers and equipment; and Tim Slager, chief financial officer. "One of the things that makes us strong is that I don't try to know everything," Stob says. "I trust Pete, Ron and Tim to know. That's one thing we've had to work on is trust, but it's made us stronger."

Stob has two nephews and a stepbrother in the business as well, and he says the company has hired a family business consultant to help in the coordination of the company's management now and for future generations. "One reason a lot of family businesses fail is that they haven't planned for the next generation of leadership," Stob says. "We've always worked hard at that. We considered what the executive profile would look like for the third generation. Now, we're working on the fourth."

Recently, Speedway lost a large residential account, the town of Geneva, Ill., to a lower bid. While many companies might panic at the thought of losing an account held for 30 years, Speedway did not, and for very good reasons. It continues to serve 10,000 residents in unincorporated areas and has several bids out for service to communities within a 10-mile radius. It also recently secured a contract to service Plato township's 1,000 residences.

"That's about a seventh of what we had with Geneva, but it puts us back in the running," Folkerts says.

Also bolstering the company's outlook is the fact that it gained nearly 100 commercial accounts during March - one of which was an apartment cooperative with 68 units. "It was a very good month for us," says Cookie Steen, a sales representative.

In approaching the apartment cooperative, Speedway touted its conscientious service approach. "There were service problems with the previous provider," Steen says. "Most of the problems were things like not closing the lids, having ratty containers or the roll around containers would be left out in the parking lot. Of course, price also was a factor. We committed to providing better service at a slightly lower price."

Speedway is located near a fast-growing, industrial corridor along Interstate 88, a main traffic artery connecting Chicago to several western suburbs. The prime location causes Speedway's executive team to believe the company will double in size in the next five years.

"In the last 15 years, this area has experienced much more growth," says Stob, surveying the landscape that was once farmland and is now teaming with construction crews and massive earth moving equipment. "We've kept an eye open for businesses moving into the area. I'll see a building going up, and see a sign for a utility company. I'll give a call, and we'll do the sales pitch.

"We get a lot of accounts, and I think it's because companies are tired of dealing with outfits where they have a hard time getting a response."

According to Steen, the sales office now makes use of inside sales personnel to maintain accounts while other sales representatives work in the field. "Last year, we didn't see the need to do this," she says. "This should tell you things are moving here."

Speedway's approach to new commercial accounts is to offer roll-off containers for construction sites, then try to sell its more conventional collection and recycling services. Speedway recycles mostly cardboard and paper for its commercial and residential accounts.

The materials are sorted at the company's 100-ton-per-day capacity materials recovery facility in Geneva that yields about 40 tons of newspaper, 40 tons of mixed paper and 60 tons of corrugated cardboard per week. The facility also handles plastics, tin and aluminum collected from residential accounts and materials from other waste haulers.

Stob points out that the facility operated closer to full capacity when Speedway handled Geneva's residential business, but he anticipates that the freed-up capacity will allow for growth of commercial accounts.

"We built the facility when we were doing a lot of residential business," Stob says, "but municipalities now are looking for the cheapest vendor. Since many things like this are cyclical, we trust that this will turn around. In the meantime, we're pursuing other avenues of business."

Keeping the Competitive Edge Key to Speedway maintaining its competitive edge is found in its collection equipment, including 40 trucks. Two features Speedway considers important for its trucks are on-board scales and rear mounted cameras on its front-loaders.

On-board truck scales help drivers maximize their load while insuring that the vehicles maintain legal weight limits to avoid costly fines. The cameras reduce chances for property damage, accidents and insurance claims. Both are seen by the company as cost-saving devices.

Achieving operating efficiencies is critical for any family-owned business that must compete against larger companies that enjoy more plentiful capital resources. But Stob points out there's something beyond this that makes Speedway special.

Some employees have remained with the company for several decades. Folkerts joined the company in 1972, and a couple of drivers have remained there for more than 30 years. Even newer drivers appreciate a sense of belonging and ownership.

For example, Kenny Schumacher has worked for Speedway for the last three years. "Ever since I've worked here, I've never experienced a closed-door policy," he says. "They will face a problem and take care of it. I feel they've really taken a liking to me, and they show me a lot of respect."

In the past year, Speedway issued uniforms - dark gray pants, light gray shirts and green T-shirts with the Speedway logo - to its drivers to reinforce a professional image. The company also started a newsletter for customers and invested $100,000 in a new Compaq computer system and Soft-Pac software.

But even more importantly, it has begun to challenge employees' assumptions about doing business. "The idea is to get everyone thinking about how we can improve the way we do business, and to think differently about what we're doing each day," Stob says.

For example, when customers call for disposal services not offered by Speedway, such as the collection of appliances, tires, chemical or medical waste, salespeople simply don't dismiss the request. They recommend companies and provide their phone numbers.

They've also discovered that going an extra step can mean a lot to a customer. For example, Bright orange plastic bags issued to residents for collecting household batteries are a special touch that has helped land business for the company.

"People love these," Folkerts says. "This tells them that we care about the environment, and that we are providing them with a way to do their part to help."

Speedway packs the household batteries in 55-gallon drums and sends them to a battery recycling operation in Michigan. The customers even seem interested in hearing about the process, he says.

"Again, it's the small surprises, the special touches that enable us to cultivate customer intimacy," Stob says. "When you have that, you can continue to grow and feel good about what you do. We're not the cheapest, nor are we the most expensive. We keep a close eye on costs, and we don't raise our rates two or three times a year. People like that."

Stob says Speedway has been approached several times by larger competitors, but it has chosen to remain independent. "Generally, I think the biggest reason is we don't want to work for anyone else."

Trucks: 11 rear loaders, Mack chassis with Leach Bodies; 14 Mack roll-offs with Galbreath bodies; 10 Mack front loaders, all Mack chassis with McNelius, Pak Mor and EZ Pack bodies; 5 Lodal side loaders, 4 Lodal recyclers, 3 Lodal combo units; 3 GMC Top Kick container trucks

Front Load Containers: 2-, 4-, 6- and 8-yard, manufactured by Dymar Industries and D&B Fabricators

Rear Load Containers: 1-, 111/42-, 2-, 4-, 6-, 8- and 10-yard manufactured by Perkins Manufacturing, Dymar Industries and D&B Fabricators

Roll Off/Open Boxes: 10-, 15-, 20-, 30- and 40-yard manufactured by Dymar Industries, D&B Fabricators and Poynette Iron Works

Roll Off/Compactor Boxes: 28-, 33- and 42-yard manufactured by Dymar Industries, D&B Fabricators and Poynette Iron Works

Home Containers: 90-gallon cart, 90-gallon recycling bin by Rehrig-Pacific

Customers: 12,000 residential, 4,000 commercial (not including transfer/recycling center) Employees: 82 Service Area: N.W. side of Chicago, N.W. and Western suburbs. Services: residential garbage and recycling collection, recycling, construction and demolition debris removal and recycling, business and industry collection. Local tipping fees: $36 per ton

Solid Waste Processing Plant Processing Equipment: Balemaster EO-1850 with Auto-Ty baler; Karl Schmidt fluffer, Bobcat 953 loader; Volvo BM L 90C loader; Mayfran and Portez conveyer; Eriez magnet. Refuse processed: 350 tons per day (500 tons per day capacity) Employees: 1 foreman, 2 loaders, 5 sorters, 1 clean up worker Service area: Kane, Durage and Cook Counties.

Local tipping fees: $36 per ton versus $36 per ton at other area sites.

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