The History of H&R
It’s been a long and exciting journey from a 4-person company operating out of a small warehouse to one of the largest heavy equipment dismantlers in the country. This little company was able to overcome the difficulties associated with any new business, and built a company that became a standard within its industry. H&R Construction Parts and Equipment has been a company in transition since its inception in 1984.
Founders Stephen Hansen and Marvin Ruch worked together at a Dresser dealer in Buffalo, NY in the early 80's. During this time, both Stephen and Marvin noticed that there were very few avenues for customers to go to get parts for their equipment other than the OEM dealer. Seeing an opportunity, the two decided to go out on their own and build a company that would offer equipment owners a quality alternative to OEM parts at a reduced cost.
That was the beginning of H&R Construction Equipment Parts.
The two purchased a property on Buffalo’s east side, hired two employees and started to dismantle Dresser, Komatsu and Payhauler machines and sell their parts. With quality and customer service central to every decision, customers noticed and the company was quickly making its mark on the industry. Things were taking off and growth was on the horizon. Sales reached $1 million in 1985, and that growth meant more employees and a larger building were to follow. The next year, H&R Construction Parts moved to its current location a mile away from where it was founded where they shared a 110,000 sq. ft. building with another company. But the growth continued and the company took over the entire complex, along with the 7.5 acres of land for outside storage.
Stephen and Marvin realized that in order to assure customers the highest quality parts possible, they had to work to increase the useful life of the parts they were selling. To do this, the two built a new shop to recondition components. The components processed in the new shop included engines, transmissions, differentials, final drives and more. The company could now offer its customers an extended lifetime of the parts they were selling, helping customers keep expenses down while helping to assure their machine would be available when they needed it most.
H&R reached a major milestone in 1992. The company dismantled its 1,000th machine at its lone Buffalo location. The need for space increased and the company added 22 acres of outside storage on former railyards adjacent to their facility. This allowed them to bring in more machines and branch out its offerings.
Like most other companies at the time, H&R's business model was a “pull-and-check” system. When a customer called for a part, the salesperson would see what parts were left on the machines stored in the yard. If the part was available, a mechanic would remove it directly from the machine and bring it into the warehouse to be processed. This took an excessive amount of time and the quality of the part was not known until it was able to be processed. The system was not efficient and the salesforce could not guarantee a customer a part was available immediately. Realizing that the process had to change, the company changed its business model from the "pull-and-check" model to a "ready-to-ship" model. This was a monumental and risky change for the company, but one that proved to be correct, producing great dividends and helping the company improve quality and customer service.
The "ready-to-ship" model became known internally as the Upfront Process. Machines were identified as "high demand" machines and brought into the Teardown Department to be completely dismantled. Its parts are identified, inspected, and those parts that pass inspection are sent to be processed. Processing includes being cleaned, inspected again and either put on the shelf for sale, or sent to the Recondition Shop. There, the parts are inspected and tagged to be reconditioned or rebuilt. The mechanic will recondition or rebuild the part, then tested to make sure it functions within or above manufacturers specifications. The part is ready to be placed on the shelf and available for sale. Upon a sale, the part makes its way to the shipping department to be inspected for the final time and prepared for shipping. This Upfront Process had effectively streamlined parts processing, increased the quality of the parts sold, and improved customer service by significantly decreasing or eliminating the lead time for parts by creating ready-to-ship parts.
This shift in processing models lead to the company's increased sales and demand for its products. H&R Construction Parts dismantled their 2,000th machine coincidentally in the year 2000. Demand continued to rise, and so did the demand for new parts. In 2002, H&R Construction Parts introduced new aftermarket final drives to their portfolio and further increased their expertise in final drives and other new aftermarket parts in 2005 by acquiring Contractors Services Company out of Riverside, CA.
H&R Construction Parts caught the attention of the Sumitomo Corporation in 2007 and through SMS Construction and Mining Services, formed a strategic partnership increasing the strength of the company and helping to propel it forward. Shortly after the new partnership, the company opened its second location in Ocala, FL and third location in Edmonton, Canada. It finished up a very busy 2007 by dismantling its 3,000th machine.
In an effort to better serve its Southern customers, H&R Construction Parts purchased Crawler Equipment out of Lawrenceville, GA in 2012 and closed its sales office in Ocala, effectively adding full-service operations in the South out of a single location. The company now had 4 warehouses strategically located throughout North America, positioning itself as a dominant force in the market.
The Great Recession hit the construction industry hard, but H&R Construction Parts navigated its way through and emerged strong. The company celebrated its 4,000th dismantled machine in 2014. But, it wasn't yet done with its transition into the company it is today.
In 2015, H&R Construction Parts was a company that could boast of having one of the largest inventories of new and used construction equipment parts in North America. It's 4 locations and over 70 employees worked together to provide a level of service and quality it could be proud of. But, they recognized that there was still more they could do.
A decision was made to split the company up into two divisions, the Classic Parts Division and the New Parts Division. The purpose of the split was to allow for each division to focus on developing their specific product portfolio and respond to the needs of the customer quicker and in a more precise manner. The Buffalo branch is the hub of the Classic Parts Division, with Lawrenceville and Edmonton as support branches. All used and surplus parts are processed through these branches and machines are being dismantled in both the Buffalo and Lawrenceville branches. The Classic Parts Division boasts an inventory of over 140,000 parts and supports the major manufacturers of excavators, wheel loaders, dozers and articulated trucks, supported by 12 salespeople throughout the 3 branches.
Alternatively, the Riverside branch was designated as the hub of the New Parts Division and charged with expanding the aftermarket parts offerings. It is also the home of the Final Drive Center which is the official distributor of FDC parts in North and South America. The Final Drive Center supports over 5,100 models of excavators for their final drive line and 700 excavator models for their swing bearing lines. Other product lines include cooling fans, gear pumps, hydraulic oil coolers, main hydraulic pumps, pump couplings, stepping motors, swing drives and gearboxes, as well as track spring assemblies. The New Parts Division is supported by 3 salespeople exclusively focused on new parts.
The transition of H&R Construction Parts and Equipment from a small company making its way in a young industry, to a leader in the since developed market has been one of growth, a focus on the customer and a desire to produce the best product available. H&R Construction Parts is poised to build upon its history and redefine an industry.