KATHLEEN YANITY

Journal Staff Writer. Providence Journal . Providence, R.I.                                    Jun 10, 2004. pg. E.01

Copyright Providence Journal/Evening Bulletin Jun 10, 2004

Staying innovative has helped family owned GEM Plumbing & Heating grow.

Waiting in line at the plumbing supply house is a thing of the past for employees of GEM Plumbing & Heating Co. Instead, they go next door -- to a large parts warehouse attached to the company's new Lincoln headquarters.

But GEM doesn't own the inventory in the warehouse, nor pay the salaries of the half-dozen people who run it. And with the completion later this year of a wireless system for scanning bar codes, GEM won't even pay for any parts stocked on its more than 100 service vehicles until they are installed.

The innovative system has been set up by Ferguson Integrated Systems Division, a unit of the biggest U.S. plumbing parts company, which usually sets up turnkey supply chain operations for industrial giants such as General Electric or Motorola.

Bringing in Ferguson to buy from local vendors and distribute supplies not only streamlines operations, but releases capital GEM once devoted to inventory. It's just one of several new practices that the family owned GEM Plumbing has adopted in recent years to keep pace with a changing industry.

The new practices have resulted in strong growth.

According to figures released by the privately held company, sales of $14.5 million in 2000 more than doubled to $35 million by 2003. Employment has grown from 90 workers in 2000 to about 315 now. About two-thirds of them are plumbers.

The nonunion company serves about 40,000 customers in Rhode Island, Southeastern Massachusetts and eastern Connecticut.

Other innovations that have propelled GEM's growth include:

* On-site training facilities, dubbed "GEM University," where employees receive upward of 200 hours of instruction each year, both live and via the Internet, on both the technical and customer service aspects of their jobs.

* New operating and service delivery systems, such as a preventative truck maintenance, and a fleet utilization program for tracking costs.

* A computerized customer call and dispatch center, with 12-foot monitoring screens that feature satellite mapping to locate service vehicles and assess traffic conditions to better assign workers to pending jobs.

* An offbeat marketing campaign to increase brand awareness.

"I guess you could say that we have taken a company in a vanilla industry and made it unique," said Larry Gemma Jr., 46, GEM's operations chief and one of several siblings who run the company.

Eleuterio "Larry" Gemma and his wife, Gloria, ran a plumbing business and raised nine children in Providence's Mount Pleasant neighborhood, beginning in 1949.

As adults, Larry Jr. and twins Leonard and Edward Gemma, 43, joined the business as well as earning business degrees from the University of Rhode Island.

To supplement the plumbing income, the brothers bought and fixed up residential and commercial properties, and the company now has about 500 rental units in its real estate portfolio.

Over time, the plumbing business grew to include large commercial renovation and construction projects.

Leonard and Edward Gemma now run the construction unit. Anthony Gemma, 34, the youngest sibling and an attorney, is president of the service division. Two sisters, Maria Gemma Corcelli, 49, and Joan Gemma Petterutti, 48, run the real estate operations.

A sister-in-law, Elizabeth Gemma, a certified public accountant, oversees the finances. Their father, 76, is retired. Their mother died in 2002 at age 70.

As the company grew, the family members realized, "We had to run the business, not work for the business," said Larry Gemma. In the early 1990s, they began attending training sessions offered by vendors on the best operations and management practices in an industry with a large volume of customers.

By 2000, the focus turned to how the company interacts with its customers, said Anthony Gemma. Competition in the contracting business is growing from large entities such as Home Depot and Sears, national franchises and other companies created by industry consolidation, he said. To compete in the intense environment, the company four years ago began a complete overhaul, with assistance from the local chapter of the Center For Performance Excellence. The nonprofit group uses criteria established by the National Baldridge Quality Program to help companies identify goals and needs, reorganize operations, realign work forces and measure progress.

"The cultural change that has taken place here in the last three to four years has been tremendous," said Leonard Gemma.

The company now collects, analyzes and shares data on everything from what parts get used most often, to how long a telephone customer had to wait on hold for a dispatcher.

Employees, who as a group used to answer to one or two supervisors, are now managed in teams of 6 to 10 people, with one leader each. It's more like a military model that encourages communication, resourcefulness and group problem solving, said Leonard Gemma.

In addition to committing to continuous training, plumbers and other service workers have also made some style changes, such as keeping up their appearances, wearing clean, white shirts, putting down floor mats and covering work shoes when in a customer's home or business.

"We wanted to change the customers' perception of a plumber, make them see them as the professional technicians that they are," said Anthony Gemma. To distinguish GEM's plumbers further from the competition, it adopted its quirky, "smell-good" plumbers advertising campaign.

"We're doing it to get the public's attention. From the results so far, we have," he said.

Confident that it has enhanced its organization sufficiently to handle its plumbing, heating, cooling and fire-sprinkler work well, GEM is adding electrical contracting to its mix beginning this month.

Although there has been some bank financing and cash flow from the real estate operations, most of GEM's growth has been financed by reinvesting profits back into the business, said Larry Gemma. Family members receive salaries, but profits stay in the company rather than being distributed.

The Gemmas say they plan to keep operating as a family owned business, even as it grows on a regional or national level. It will try to stay a close-knit company, true to its service roots, said Larry Gemma.

"When people ask me what I do, I still tell them that I am a plumber," he explained.

* * *

* GEM Plumbing & Heating employees handle calls, while Anthony Gemma, left, and his brothers Larry and Leonard inspect an automatic cutting machine.

JOURNAL PHOTOS / ANDREW DICKERMAN

Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
People: Gemma, Larry Jr, Gemma, Anthony, Gemma, Leonard
Companies: GEM Plumbing & Heating, GEMs
Section: Business
Text Word Count 1061