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Johnie Schulte:

Pioneered a hub-and-spoke approach to manufacturing and cultivated thriving company culture

Posted 11/1/2016

2016 Metal Construction Hall of Fame

Schulte pioneered a hub-and-spoke approach to manufacturing metal buildings and cultivated a thriving company culture.Johnie Schulte shaped the metal construction industry by establishing a new manufacturing method for metal buildings and proving metal building companies could sell metal building components and multiple brands of products in a single market. But perhaps Schulte's greatest contributions were the legacy of creating and supporting thousands of employment opportunities for workers and growing a company culture that recognized all the people in an organization, from the lowest paid workers to the top executives, and fostered strong relationships with customers, vendors and others in the industry.


Company Culture

Schulte fostered a culture at his companies throughout his entire career, from founding Houston-based Mid- West Steel Building Co. in 1970 to his work at Hockley, Texas-based Schulte Building Systems Inc. in the 2000s that developed loyalty among employees, customers and vendors to the company and himself. He did this, in part, with an annual bonus program for employees, by giving supervisors control of their departments, giving managers opportunities to share in the growth of the company by purchasing stock, offering a 401(k) savings plan to employees and other ways.

During interviews for promotional literature at Schulte Building Systems, Schulte said, "People are really how you get the job done. Our success is from the people we bring together. We were profitable from day one-even when we took over companies that were losing money. There is only one answer, and it's people. If we continue to find and nurture the right people in our operation, we will continue to be successful."

 

"People are really how you get the job done. Our success is from the people we bring together. We were profitable from day one-even when we took over companies that were losing money. There is only one answer, and it's people. If we continue to find and nurture the right people in our operation, we will continue to be successful."

--Johnie Schulte, founder and CEO of Schulte Building Systems Inc.

 

Karen Rosales, Schulte's daughter and partner at Schulte Building Systems, says her father was always looking for ways to include people in the success of businesses. "He was all about, look, a lot of people can build metal buildings, but to make it successful, you've got to be good to your people and you've got to be good to your customers; you've got to be good to your vendors-it's all about the relationship," she says.

Rosales says her father's first job was on the machine shop floor at Houston-based Metallic Building Co. "The cool thing about [Schulte] was he always remembered where he started no matter how successful he became, and I think the fact that he knew the business from the ground up and all the workings of it made him such a great leader and such a great manager," she says. "He knew what was needed and what to expect from people and he knew how to encourage them to do those things because he'd done them himself."

Rosales worked in NCI Building Systems' human resources department in Houston during the 1990s. Her father was CEO at the company at the time. "We were really growing by then, and so there was a lot of adding on benefits and profit-sharing plans and 401(k) plans," she says. "Every time we added something, dad's position was, if it doesn't benefit every single person, even the guy that sweeps the floors, we're not going to do it. It was always about looking at the big picture and how does this benefit help every single person, not just the executives and not just the managers."

Rosales says her father's bright, positive personality helped him made loyal bonds with those around him. "He was really good at giving people credit when they did good work and putting them in the front, and being able to praise them and pump them up because it wasn't about him, it was about letting everyone else succeed and help," she says.


Offering Components

Schulte founded Houston-based National Components Inc. 1984 and pioneered the concept that a metal building company could also become a major marketer of components after it purchased Mid-West Steel Building and Metallic Building in 1989. He led this new company to rapid growth from $50 million to more than $1 billion in sales and began a cycle of private to public ownership,.

Koetting says Schulte challenged the status quo at the time that a metal building system manufacturer should not sell parts to smaller regional companies that would in turn compete with your company on metal buildings.

"The idea of a metal building company that would also become a major marketer of components was pioneered at National Components by [Schulte]," he says. "[Schulte's] point was that if he has the inventory, equipment and people to make parts for a building, why not roll a few more and utilize assets more? If they buy from us and we make money doing it, we shouldn't have a problem competing against them."


Hub-and-Spoke Approach

Schulte proved hub-and-spoke manufacturing was an effective method to produce metal buildings when he worked at National Components at its Fairview plant in Houston from 1989 to 2003. One large plant with the majority of personnel and assets built frames and supplied smaller rollforming facilities. This controlled costs and provided a market presence in the smaller plant's region.

Schulte hired Koetting as vice president of business development at NCI Building Systems in 1994 (National Components was reincorporated as NCI Building Systems, a publically owned company, in 1991) and is CEO at Schulte Building Systems. "[Hub-and-spoke manufacturing] also gives you a market presence in the area of your smaller plant and customer confidence that support is nearby," Koetting says.


Multiple Brands

Schulte proved multi-brand marketing, selling two or more brands of metal building products in one market, was an effective business model at NCI Building Systems after it purchased Caryville, Tenn.-based A&S Building Systems in 1992 and Irving, Texas-based Mesco Building Solutions in 1998. The practice was unheard of at the time, Koetting says. "Now everyone does it; thank you Johnie Schulte," he says.


Employment Opportunities

Schulte created and supported thousands of employment opportunities for workers throughout his career as he oversaw the founding, acquiring, merging and turning around of numerous companies. Schulte grew his companies, beginning at Mid-West Steel Building in 1970 with a small number of employees. When he retired from NCI Building Systems in 2003, the company employed 2,500 employees and operated more than 15 production plants.

Schulte led Mid-West Steel Building to double its business volume every two years during the first 10 years of its existence, 1970 to 1980, so it reached $32 million in sales in 1980, when it was purchased by London-based Cronus Industries Ltd.

NCI Building Systems purchased A&S Building Systems in 1992, which led to $134 million in sales in 1993. NCI Building Systems also purchased Houston-based DBCI, Mesco Building Solutions and Houston-based MBCI, growing sales to more than $1 billion.

In 2005, Schulte came out of retirement and founded Schulte Building Systems. By the time he passed away in 2009, Schulte's company had grown to employ more than 250 people and generated more than $100 million in annual sales.

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