Steve Yelland is the president of J.F. Rohrbaugh Co., a manufacturer of industrial wood products that serves the Mid-Atlantic region.
Pallet Enterprise: What is the best part of working in this industry?
A: I like that it’s an environmentally friendly business. We’re taking a natural resource and using it to ship goods all over the world. When a pallet reaches the end of its useful life, it makes its way back to a pallet recycler where it is repaired or ground up into some kind of wood fiber and used as a mulch product, animal bedding or fuel for energy. So a pallet is really a recyclable and environmentally friendly product. I think that’s a really cool story – one we don’t always tell really well – but it’s a good story that we need to tell.
Pallet Enterprise: Have economic changes over the past few years changed the way you manage your company? If so, how?
A: There’s a lot of regulatory issues and you have to be more cognizant of keeping up with those regulations. We have to dedicate resources to stay in compliance and all of that comes with a cost. We have to take a step back to be able to deal with OSHA, tax, environmental or health care compliance.
It’s more important to work on your company too. Through consolidation you’re dealing with bigger companies; you’re not dealing with small companies like you may have in the past. So you’re going to talk a lot more about strategy, operational plans and budgets.
Pallet Enterprise: What performance indicators do you track to measure how your company is doing?
A: We have a strategic plan and every year we review that plan and develop annual objectives. Some years those goals carry over from year to year and others we may have a new one. Along with those goals we have several metrics that we look at such as on-time delivery which is a good indicator of how we’re doing and what our customers think of us. We look at labor productivity, which is our sales revenue divided by our labor hours, and we share that with our employees to show them where we need to be and where we are. We look at our DART rate for safety. Financial metrics include gross profit, revenue performance compared to budget and performance compared to the prior year revenue. Some years we may have an initiative, such as maintenance, so we would look at our preventative maintenance completion rate and time spent on emergency versus planned maintenance.
Pallet Enterprise: What is the best piece of business advice that you have ever received?
A: My grandfather, who was very successful in business, told me that a lot of times we focus on growth and get a little too wrapped up in the income statement. At the end of the day, you have to have enough cash to fund your business. So we can talk about growth and how well you’re doing on your income statement, but cash is king at the end of the day. It really comes down to how much cash you have and keeping a positive cash flow.
