Medical Distribution Hall of Fame
He’s not above any task
If there’s a flannel shirt in your closet, there’s a good chance you would enjoy working for Roger Benz, a founder of Seneca Medical in Tiffin, Ohio, and soon-to-be retired co-CEO of Concordance Healthcare Solutions.
Located about 50 miles southeast of Toledo, Tiffin has a population of about 18,000. It has 12 one-way streets, 22 beautiful parks and 65 miles of sewer pipe. It is a city of hay balers, says Benz, who is being inducted into the Medical Distribution Hall of Fame. And Concordance is a company full of them.
Benz can talk about hay balers, because he was one, as a kid on the family farm in central Ohio. “We baled a lot of hay because that’s what grew on our land.” And he’s proud of it.
“You look around here, and you see that this Midwest agricultural, rural workforce knows how to work: They grew up baling hay for the old man. A lot of our success is due to a bunch of great people who work their butts off. They don’t do it because they’re paid to do it or to get recognized. They do it because it needs to be done.”
Opportunity knocks
Benz was a 32-year-old controller at Greene Memorial Hospital in Xenia, Ohio, in 1989 when he and his wife, Deb, and their two kids (one and four years old at the time) drove to Tiffin for a Memorial Day visit with Deb’s brother, Bill Schultz, and family. On Sunday morning, Schultz asked Benz to go for a ride with him.
At the time, Schultz was finance officer for Alco Health Services in Tiffin, a med/surg distributor and drug wholesaler, which was founded in 1937 as Meyers & Co.
Alco was selling its non-core assets, including its med/surg business, explains Benz. “Bill said, ‘I’d like to consider buying it. Would you be interested?’
“You rarely hear opportunity knock,” says Benz. “I said, ‘Sure, let’s try it.’”
On the ride back home, Benz told his wife what he and Schultz had talked about. “I’m in,” she said, with little hesitation. “We decided, if we lose it all, we could start over,” he recalls. “At 32, you’re young enough to roll the dice.”
Tiffin, like many Midwestern towns, had lost industry and jobs during the 1970s and ’80s. “We were one of the few people moving there for a job,” he says. But move they did, in December 1989. In February 1990, Alco transferred the med/surg assets of its business to the new company, Seneca Medical.
Nine months later, on a Friday afternoon, Benz asked Schultz in a quiet moment, “Why did you ask me to do this? You’re in the industry and I’m a controller at a hospital. What brings me to this table?”
“I didn’t know who else to ask,” responded Schultz. (Later, Schultz admitted it was much more than that, namely, the fact that he and Benz shared similar attitudes about how to work with people.)
Swimming upstream
“I thought we had a chance,” says Benz, speaking about Seneca. “Did we foresee this being hugely successful? No. But we knew we would have to work hard as hell to make it work.” In other words, bale a lot of hay. And they would ask their employees – many of whom came over from Alco – to do the same.
The landscape at the time didn’t bode well for small distributors. Consolidation was well under way in 1990. “We would be swimming upstream as a little guy.”
Warehouse space was short in Tiffin, so Schultz and Benz rented space in a 300,000-square-foot foundry in the middle of a cornfield. The building had at one time housed Hays-Albion, which manufactured castings for the automotive industry. Some foundry work was still being done there.
“It was a 45,000-square-foot room, which had become an internal junkyard for the foundry,” he says. The room was littered with debris, including an International Harvester dump truck, all covered in black soot. Upon seeing the space, one of Seneca’s new employees is said to have gone home and told his wife, “I think I just threw away my career.”
At any rate, the room was cleared and swept – many times – so as to house inventory. Sterile items were stored in a clean room, but most of the boxes and cases lay on pallets or on the floor. Boards were laid over big circular sinks where foundry workers had once washed their hands, forming desks for the accounts payable team. Because the foundry was still operating, a faint haze descended on the warehouse every day, necessitating a daily dusting.
Eight months later, Seneca moved into a newly built, 68,000-square-foot warehouse. (Today, it stands at 310,000 square feet.)
Strategy
Alco had been in multiple markets – retail pharmacy, doctors, hospitals. The company even had a sports medicine piece, which, in Tiffin and surrounding counties, really meant furnishing high school football teams.
“On Day 1, we sat down and asked ourselves, ‘What’s our strategy? What should we focus on?’” says Benz. “We decided we couldn’t afford to get out of any of those markets. We either had to grow this thing or die.”
So, the corporate goal became growth, and it pretty much remained that way for the next seven to 10 years. (Ultimately, however, the acute-market came to dominate the company’s business. In fact, at the time of the merger of Seneca, Kreisers and MMS—A Medical Supply Company in 2016 to form Concordance, more than 90 percent of Seneca’s sales were in acute care.)
It was Schultz’s idea to create a profit-sharing program for Seneca employees, to help them feel a sense of ownership in their new company. About nine months after the program began, employees received their first profit-sharing check – about nine bucks. But those checks grew in size from there. Later, in 1998, Seneca Medical instituted an employee stock ownership plan, or ESOP, “so our people weren’t just sharing in the profits, but in ownership of the company,” says Benz. He credits both programs with helping Seneca Medical enlist its employees’ loyalty and hard work through leaner times.
In 2001, opportunity knocked again, when AmeriSource Medical Supply (which had acquired Alco in the early 1990s) sold its med/surg business to Seneca Medical, including two warehouses – in Knoxville, Tennessee, and Ripley, West Virginia. At the time, Seneca was a $140 million company. The AmeriSource acquisition pushed it over $200 million.
After that, the company grew organically rather than by acquisition, opening warehouses in Shelbyville, Indiana, in 2005, and Kalamazoo, Michigan, five years later. (Ironically, Seneca inhabited an old foundry in Kalamazoo, as it had in Tiffin, while a new building was being constructed.) In 2011, the company opened up operations in Mocksville, North Carolina.
Still, Benz believed Seneca needed to stretch even farther geographically, and he discussed merger opportunities with several regional distributors. In 2014, he and Tom Harris, CEO of MMS, began serious discussions. Dave Larson of Kreisers Inc. in Sioux Falls, South Dakota, joined, and the three announced the formation of Concordance Healthcare Solutions in late 2015. They closed the deal in March 2016.
“The synergies of these three companies were perfect,” says Benz.
Bill Schultz retired in 2001, but Benz still sees him from time to time in Tiffin. “He’s probably the most humble human being I have ever met,” says Benz. “He believes in people, he believes in honesty, he knows how to motivate people. He’s a great leader. I just admire that.
“He showed me that when you hire someone, you give them the tools they need to do the job and let them go.”
No better way to handle a hay baler.
Speaking of Roger Benz
Dave Myers, president and chief operations officer, Concordance Healthcare Solutions
“Roger is an entrepreneur. Nothing can’t be done. He helped start Seneca Medical, now Concordance, and that took a ton of moxie. He understands the ‘risk-reward’ equation, and he’s willing to ‘let it all ride’ if the odds are in his/our favor or even if it’s just his gut supporting a decision. His role in supply chain? I’d say it’s being a leader who’s willing to take on the big players in the industry, to fight hard for what’s right, and to not be greedy along the way. He likes to call himself a bean counter, because he’s a hell of an accountant and did grow up around bean fields, but he’s willing to give away part of the farm in a customer negotiation…always listening to what the customer or marketplace is asking, and then doing it.”
Lisa Hohman, CEO, Concordance Healthcare Solutions
“Roger has always believed that he is not above doing any task. I was working late one night, trying to get a bid completed. I was in the conference room collating the bid, and he walked by on his way out and asked if I needed help. I had been with the company only a year or so, and couldn’t believe the CFO was asking if he could stay late and help. Even though I reassured him that I was fine and that he didn’t need to stay, he sat down on the floor and started placing the bid into binders. This is classic Roger.”
Mike Carver, corporate accounts director for medical distribution, GOJO Industries
“Roger is a very transparent leader. He wants the first words out of his mouth to be ‘Yes, let’s try it.’ He not only thinks outside the box, he implements ‘outside the box.’ He is extremely loyal, not only to his team, but also to his partners in the industry who work with him. Two characteristics that you will never see out of Roger Benz: arrogance and greed.”
Tom Harris, CEO emeritus, Concordance Healthcare Solutions
“We had recently completed the merger [to create Concordance], and Roger was asked to appear on a distributor panel at HIDA. The Big 3 proceeded to describe their long legacies in serving the healthcare industry. Very impressive stories. When it was Roger’s turn to describe the newly formed Concordance Healthcare Solutions, he proceeded to say, ‘We are like teenagers, with pimples and braces, and you better watch out because you just don’t know what we are going to do next.’ It brought the house down.”