Mr. Scott Puhalsky
Vice President of Sales for Cleveland Electric Laboratories
Scott, I have been looking forward to talking to you and learning more about Cleveland Electric but first I want to ask how you are doing these days? How has COVID affected you and your family?
“It has certainly been an interesting year for us all. Each of us has handled things differently; I tend to immerse myself in work as a general distraction for outside noise in my life. That is not always easy. My wife and I are learning to work with potential home schooling for our youngest, and our two college kids that may or may not make it through a full semester. We have older parents that are concerned. In general, we are missing life as it was. But with change comes opportunity. For me, that means coming out of this better and stronger. I have enjoyed time with family so much more, from walks and talks to just re-connecting with each other. At work I have also been reminded of the daily value in each of our employees — their presence and input and passion.”
“Cleveland Electric Laboratories was established in Cleveland, Ohio in 1920. At that time, the primary focus was to service and repair electric meters for railroads and local Cleveland industries. Over time, field service became a more prevalent part of our business. At the request of customers, as well as our own requirements for higher quality thermocouples in our service work, CEL began to design and build thermocouples. Eventually the business model shifted exclusively to thermocouples as we began selling to a wide range of industries. What started as a small service and repair business has grown to be the global leader in industrial thermocouples and home to over 100 employees.”
I understand you have two locations, the one in Twinsburg, Ohio and a second, Advanced Technologies Group, in Tempe, Arizona-what is the story behind the Arizona location?
“CEL was looking to expand our physical footprint, create duplicity in manufacturing capability, and complement our existing product offering to our primary customer base, so in 2004 we opened our Advanced Technologies Group in Tempe, Arizona. Realizing that turbine engine manufacturers for both aerospace and power generation perform extensive testing for new designs and are constantly in search of greater efficiencies for existing models, CEL wanted to position itself to support these testing initiatives. Cleveland Electric Labs began fabricating specialty temperature and pressure probes, in addition to performing modification machining of customer components and offering engineering and installation of temperature, pressure and strain gauges on engine components.”
Our focus at “The Monty” as you know is the heat treatment industry, so this question is specifically dedicated to the heat treatment industry. What products do you offer to captive and commercial heat treaters and industry suppliers such as furnace builders?
“Cleveland Electric Labs is proud of its history and relationship in the heat treatment industry. Since our company is rooted in the service industry, we continually focus on how the customer uses our product, and how we can partner with them to meet or exceed expectations that are critical to them. We consider raw materials, accuracy, drift, response time, longevity, lead times and pricing. We work with significant industrial furnace manufacturers to understand form, fit, and function. In short, if it is an industrial thermocouple, then we make it, but our expertise has moved towards high temperature (control or high limit sensors) and critical–to–quality builds.”
How do you sell your products? Direct salespeople? Manufacturers reps? Distributors?
“Our sales strategy is clean and simple – CEL sells direct. All the staff operates as a team and is salary based. The group all has the same goal: to diligently serve our customers, having their best interests in mind. If we can move a customer from a type ‘S’ to type ‘K’ for their application, I do not want our staff to ever think about how a decrease is sales dollars may affect their overall compensation. For that reason, any potential commission structure is removed from consideration. Our group is measured based on the longevity of our relationships, and the ability to retain, foster and grow them.”
At this point I want to mention that the company is celebrating a very impressive anniversary this year, one which only a handful of companies in this industry can match-please tell us about it.
“A century of business is certainly a milestone that we do not take lightly. Under the leadership of Fred Lieske, who became President in 1954, followed by his son Jack Lieske in 1981, then the appointment of Alan Seymour in 2019, the business was built on a foundation of faith, family, and service. Our customers are truly considered partners, and our employees are CEL family. We have extremely high employee retention, which offers us a continuity in knowledge and customer familiarity that is invaluable in today’s uncertain conditions.”
Scott I am going to play Devil’s advocate for a moment and make a rather provocative statement, isn’t a thermocouple a thermocouple? Now before you get annoyed at me let me rephrase this a bit, how much difference can there be between a thermocouple made by Company X as opposed to one made by Company Z-what sets yours apart from others?
“It is fair to question if a difference exists between manufacturers, especially if a thermocouple is classified as MRO and is not considered critical–to–quality. It is important to realize that the ramifications of a “bad” thermocouple can be catastrophic. A customer selects a supplier based on price, quality, and delivery. These buying criteria are unique to everyone, and as a manufacturer of custom products we must balance the significance of each. For CEL, quality takes precedent over all else, as much of our business requires elevated standards. We also have a constant eye toward reduction in “Per Heat Cost”—how we extend the service life of our thermocouple while maximizing performance. This is generally achieved through thoughtful collaboration and by carefully listening to our customers’ needs.”
What is a typical order for you Scott? For instance, are your customers buying a few small items from you at a time or is it more typical that a customer will place an order for their thermocouple requirements for the next year? This question leads to another one, are you mainly dealing with end users, captives and commercials or is more of your business with furnace builders and industry suppliers?
“Cleveland Electric Labs sells thousands of line items to a wide range of industries. We support long-term agreements, blanket orders, and spot buys for customers. Our relationships are not overly selective or targeted, as diversification across industries is something we value, especially in today’s market. CEL targets end users, captive and commercial heat treat, and furnace builders. Our business model supports a direct relationship as much as possible, reducing the risk of misinformation and increasing our ability to give the customer exactly what they want—from performance and certification to packaging, product identification, serialization and more.”
Has the technology behind thermocouples changed much over the years? This of course leads to the next question which is; do you see any changes on the horizon when it comes to measuring temperatures in furnaces? Anything exciting which you can share with us?
“The technology behind thermocouples is nearly 200 years old, with CEL existing for over half of that timespan. The general purpose of simply achieving a temperature reading has elevated to the adherence to strict quality standards, both internally and industry/customer mandated. There is a constant effort to raise temperatures, increase longevity, reduce diameter, and improve accuracy. The industry is trending, as it should, towards value-added relationships. We believe that there are many suppliers that can give a customer what they ask for. We make it our business to give them what they need. We make the effort to understand our customers business as if it is our own.”
I owe you a bit of an apology here Scott, I didn’t ask the most important question of all; what is your background and how did you end up as VP of Sales for Cleveland Electric Laboratories?
“The short answer: family. I grew up with Cleveland Electric Labs. My father, Ron Puhalsky, was with CEL for over forty years. I spent time as a teenager at CEL, learning the product before going to college. I worked as a financial analyst for a short time before I realized that I did not want a desk job, and I was fortunate to have General Electric in Cleveland offer me a position in sales, managing a distribution channel with Grainger. Both companies taught me a lot, but I eventually moved into medical sales. Opportunities for advancement in that field required relocation, and that was not attractive to my young family. I joined the sales team at CEL again in 2007. CEL was good for my father and has been great for my family as well.”
Our final question has to do with the state of the industry. This have been a very upsetting and disappointing year for just about everyone and we all have been forced to change the way we do business. What changes have you made to sell, market, and produce your products?
“This year has been a challenge for both employers and employees alike. All of us have been tasked with navigating constant uncertainty and the toll that takes has been significant. For CEL, 2019 was a record year, and the first quarter of 2020 was even better. The economy was strong and our customers were challenged to keep up with demand. Investments were made in new employees, furnaces, buildings, and the like. No industry was fully prepared for this, but we are doing our best to overcome each challenge as it comes. We are finding new business and working to create diversification without moving too far from our core. We have reduced lead times, increased inventory, and stayed strong. We are optimistic about our business and our industry, as well as our next century of service.”
Scott I very much appreciate the time and I look forward to the time when we can get together in person again, shake hands and do things the way we use to.