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April 2011
Driving Efficiency
By Mary Storms

     To see what could be versus what is.” That’s the vision Clifton Vann III and Clifton Vann IV have had for Charlotte-based Livingston & Haven (“L&H”) since Vann III bought the company in 1980.

     It’s an unexpected vision for a 64-year-old regional, family-owned motion-control engineering company with its roots in the plain vanilla petroleum handling equipment business. But then, lots of things about L&H are unexpected.

 

A Lean Strategy

     First, the basics: What does L&H do? It’s a $70 million engineering company that specializes in motion control—that is, automating pneumatics and hydraulics for manufacturing companies. Motion control plays a critical role in robotics and sophisticated machine tools, using devices such as hydraulic pumps and electric motors to control a machine’s position and/or velocity.

     However, L&H is not a manufacturer. It is a problem-solving company that helps manufacturers work smarter. With some of the highest fabrication capabilities in the country, its engineering solutions can look more like artwork than industrial tools.

     “The common theme in our solutions,” says L&H President Vann IV, “is that we provide an off-balance-sheet engineering resource for our clients without them having to bear that cost.”

     L&H is a distributor for more than 100 vendors for manufacturers in six southeastern states: Georgia, North and South Carolina, Tennessee, West Virginia, and Virginia, including three express stores selling industrial accessories. “We have about 6,000 customers in the Southeast U.S., from Nucor Corporation to small garage businesses,” says Van IV.

     L&H is also a design/build engineering firm whose mission includes helping its clients see beyond what is.

     Says Vann IV, “We help solve their problems and even help articulate what they are. More than ever, our manufacturing clients want to do something they’ve never done before and they don’t know where to start. We’re willing to take them from the napkin drawing to the end.

     “Our real value is in sharing our experience. We’ve processed chicken. We’ve made aircraft carriers. The breadth makes us uniquely qualified to help. My grandfather used to play the Concentration game with us: Where have I seen that card before? That’s like our business: Where have we seen that problem before?” continues Vann IV.

     L&H’s tagline, Driving Efficiency, speaks to their problem-solving approach for customers and themselves. “That tagline is reminds us to open our own minds and not be isolated in our own worlds,” Vann IV explains. After struggling with profitability in the early 2000s, L&H decided to implement a strict “lean” manufacturing mentality inside and out—from processing orders to helping customers package products more efficiently.

     “Because we’re not really a manufacturer, lean is the big answer for us internally. We use lean as the overarching value for driving waste out of our internal structure,” says Vann IV.

     Vann IV uses the same lean mentality for his customers, from processing orders, to running the plant or packaging the product more efficiently. He gives an example of helping a customer rebuild a machine that makes bottle sleeves. For L&H’s client to meet its customer’s needs, the machine had to run twice as fast, producing 100 sleeved bottles per minute, rather than 50.

     In the Genesis Group, L&H’s R&D facility, L&H solved the bottle problem with no upfront costs to its client, just a promise of royalties. “This creative financing and manufacturing approach opens up new markets for our customers because they can sell to bigger companies, says Vann IV. “We took on the risks and parlayed that into better opportunities for them and for us.”

 

Men with a Vision

     Vann IV’s vision, like his father’s, looks beyond L&H and U.S. manufacturing. He sees today a nation that has forsaken the manufacturing economy for services, and he’s on a mission to change that in Charlotte, in North Carolina, and across the U.S.A.

     In 2006, the national Progressive Manufacturing Awards recognized L&H as the company doing the most to increase awareness of the importance of preserving American manufacturing. “No one was more surprised than us, since we were up against the likes of GE and IBM,” Vann IV admits.

     “Our goal is to preserve manufacturing in the U.S. through the use of the technologies we sell,” Vann IV emphasizes. “John Q. Public needs to know the value of building things for today and for generations to come. We can’t count on other countries to provide the critical industrial products our nation needs.”

     To further this goal, Vann IV started his own video blog, TheHomeForInnovation.com. It emphasizes that America will create stable jobs and long-term wealth by retaining its manufacturing base: “Real wealth equals manufacturing. Manufacturing equals real wealth.” In other words: Stop outsourcing manufacturing to other countries.

     In his blog, Vann IV talks about rebuilding the future of American manufacturing for his three boys and generations beyond them: “My oldest boy is interested in science and is frustrated because his friends aren’t usually interested. Is that because they’re not interested or not exposed?”

     Using online video to build a national platform isn’t Vann IV’s only push-the-envelope idea. L&H’s culture of seeing what could be is infused in everything the company does. In fact, in 2008, L&H won the Progressive Manufacturing Awards’ Innovation Mastery Award.

     “The Mastery Award was for a specific technology: the KD-RIG, designed to optimize suspension systems for NASCAR teams,” Vann IV explains, “where making a difference as minute as milliseconds means the difference between coming in first and coming in 42nd.” It has become standard race-team equipment.

     In July 2008, L&H completed a 60,000-square-foot corporate headquarters across from its original offices on Wilmar Boulevard in southwest Charlotte. It includes a warehouse with $5.5 million of just-in-time inventory, and an 8,500-square-foot R&D wing for the Genesis Group. Genesis serves as “an area and a state of mind for creating and trying out new ideas,” Vann IV explains. Many of L&H’s 155 employees annually participate in 100 or more hours of Genesis’ creative education.

     L&H’s vision for what could be extends beyond its staff and clients to vendor-partners. The new headquarters houses its Institute of Applied Technology, open to employees and partners, and offers a vendor-partner certification program.

     Vann IV defines innovation as, “Any kind of creative thinking that solves a problem. Innovative solutions come from all over our company. The key is to constantly keep your eyes open.”

 

All in the Family

     L&H began in Charleston in 1947 as a petroleum-handling equipment company. In 1980, Clifton Vann III bought it.

     Livingston and Haven were the founders of the company. “Mr. Livingston, I never knew. Mr. Haven, however, was very influential in the company and lived until 1993 when he was 93. He fought in WWI and WWII and was friends with Erwin Rommel.”

     According to Vann IV, Haven was “the dictionary definition of entrepreneur. He was learning to speak Chinese in his later years, and was mad when the mortgage company wouldn’t give him a 30-year mortgage.”

     The Vanns were drawn into the L&H picture in 1966 when Clifton III started working for then-President John Flint in Charleston. Flint was impressed and made Vann III an offer he could refuse—but didn’t. Vann took the job at half the income he was making at a large paper mill. That was the same year Vann IV was born.

     “It seemed a little crazy,” said Vann IV. But that wasn’t the last crazy thing his father did. “In 1973, my family moved here from Charleston to start the Charlotte branch. My dad ended up trading a commission check for equity in the company. That vision has been a part of our family and company culture since the very beginning. To see what could be versus what is.”

     The younger Clifton started working at L&H 27 years ago. By age 13, he was a regular fixture, sweeping warehouses and packing boxes every summer while he attended Charlotte Country Day, then N.C. State, where he earned a B.A. in business management.

     “Then I came back to the school of hard knocks to finish my education,” laughs Vann IV. At L&H he had held “just about every position in the company” on his way to becoming president in 1998 at age 32, earning the respect of a team who remembered him as a 13-year-old floor sweeper.

     Although, from time to time, other family members have spent time in the business, today it’s just Vann III and Vann IV. “We had two captains of the ship for a while,” Vann IV says. “We worked on that over time and today, it’s as good as it’s ever been in terms of relationship and having clarity in our roles.”

     Vann IV notes that succession is one of the greatest threats for a family business. Only 30 percent of them survive through the second generation and only 3 percent survive beyond that. Part of his vision is for L&H to survive the failure rate. His advice for family businesses: “Treat the family members no different than anyone else. Ask can they do the job, and are they committed? It’s a tough conversation.”

 

Keeping It in Harmony

     The elder Vann is still active at L&H. Says his son, “He doesn’t work on Fridays and works less in good weather. He sits at the highest place in the boat, seeing things that we don’t see from down on the deck. That’s incredibly beneficial.”

     The previous president also leads one of L&H’s visions for the future, MROstop.com, “an Internet business selling the same products worldwide that we sell as a distributor,” Vann IV explains. “Tomorrow is the Internet. Dad doesn’t understand all the bits and bytes, but he understands the importance.”

     As a sideline for the last 10 years, the younger Vann has been guitarist and back-up singer in the non-profit rock band “Charity Case” with Ace, of Ace & TJ, a syndicated morning radio show on Kiss 95.1 FM. Charity Case events have raised over $750,000 for Ace & TJ’s Grin Kids, a non-profit foundation that benefits disabled and terminally ill children, showing them what could be on a trip to Disney World each year.

     But most of the time, L&H’s lead guitarist focuses on identifying his business’ next long-term gig because the rhythms of business change so rapidly. “The automation that exists today didn’t exist in 1985,” says Vann IV.

     “We were mostly a hydraulics company. In 2010, for the first time, our company sold more automation than hydraulics. It’s all motion control. We can do that through the use of air (pneumatics), oil (hydraulics) or electromechanical solutions,” he continues.

     Vann IV lauds the L&H team and credits its constant communications with keeping all the company’s parts in harmony, from RECON, with its focus on green manufacturing, to MROstop.com, using the Internet to broadcast its offerings worldwide. Teamwork has helped raise the revenues of this Charlotte-based engineering firm from $43 million in 2004 to its current $70 million.

     In contrast to the rock band Charity Case, L&H won’t be looking backward, singing other people’s music. Vann and his team are writing new material, bringing in more business “by being creative, not just hoping to do more of the same.”

     Their plan for what should be? Increasing the hum of high-end manufacturing in Charlotte and across the U.S.A.

 

Mary Storms is a Charlotte based freelance writer.
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