Lots of dealers say that safety is an important thing. But to L&W Supply’s Rob Waterhouse, it’s the No. 1 thing—both for his employees’ welfare and his company’s sales figures.

Rob Waterhouse, head of L&W Supply

“The most important thing we do is safety,” Waterhouse, who took over as general manager and senior vice president of L&W on Jan. 1, told ProSales in a late February interview. Commercial construction is L&W’s principal market, he said, and contractors in that sector have intense delivery requirements, so accidents that lead to shutdowns at a jobsite can siphon profits. When it’s a dealer delivery that causes a shutdown, a cost-conscious builder might look elsewhere next time. Thus, L&W strives to keep itself as a builder favorite by tracking and sharing its safety ratings.

Concern for workers also comes easily to a man who has been with L&W since 2010 and with its corporate parent, USG Corp., for nearly 29 years. L&W has more than 2,200 employees at 146 branches in 36 states, and Waterhouse believes that the long tenures of many L&W workers have helped win over builders.

“We look at our business as an extension of the customer’s business,” he said. “Our customers trust our people and our process, ... We’re making sure with our customers that we are there on time, with the quantities and materials specified by the contractor. If we stock accurately and are safe, we allow contractors to do what they do best.”

What L&W stocks has evolved. Today, it has seven core products: drywall, steel studs, suspended ceilings, joint compound, insulation, EIFS, and fasteners. “And we’re continuing to add more and more, like power tools,” Waterhouse said. “We’re adding products that our customers want to buy.”

Waterhouse named five metrics he uses regularly. No. 1 is the Experience Modification Rate (EMR), a calculation of workers’ compensation claims over a three-year period. The lower the EMR, the better. Average is 1.0; L&W’s for 2014 was 0.47.

Waterhouse’s second key metric is costs. “We are results oriented, so the work we do must end up on the bottom line,” he said. “Stockholders expect a return.” L&W’s operating profit nearly tripled to $18 million in 2014 from $6 million in 2013 on an 8% rise in revenue to $1.35 billion.

The third metric is how L&W performs, while the fourth “is how are we doing implementing our goals regionally,” he said. “Our tagline is ‘Nationwide Strength, Local Commitment.’ We have three divisions and 21 regions. The 21 regions have profit and loss accountability, and we give them a playbook and ask them to implement those plays. They then write a plan.”

“The fifth priority is how well we are at being proactive rather than reactive,” Waterhouse concluded. “We all do both, but if you spend the whole week being reactive, that’s a problem. You have to be proactive to customers’ needs.”