COSH Seeks a Competitive Edge

Edition: July 2002 - Vol 10 Number 07
Article#: 1284
Author: Repertoire

Ron Shinault and his wife, Karen, aren't afraid to do what it takes to gain a competitive edge. For the past 14 years, the Shinaults have worked hard to build COSH into a small but successful minority-owned distributor in Tucker, GA, a suburb of Atlanta. They've built a niche serving governmental entities as well as academic research centers, including those which conduct research on animals, such as primates.


Starting his business without any sales experience, Ron Shinault has exploited his expertise in transportation, logistics and procurement to build an efficient distribution company, offering med/surg, lab and scientific products and equipment to customers in nine Southeast and Mid-Atlantic states.

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''The Internet is a fabulous equalizer.''
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Logistics Expertise
Originally from Yonkers, NY, Ron came to Chicago in 1975 to take a distribution/transportation position with Johnson & Johnson. When it became clear that success within J&J would probably mean relocating to the company's New Jersey headquarters some day, he began looking for jobs in Chicago. In 1977, he took a position with Baxter, in logistics and transportation management. Several years later, he and Karen moved to Memphis, so Ron could become traffic manager of the distribution facility there. After two and a half years, they returned to Chicago, where Ron became transportation manager. Later, he joined the corporate purchasing department and ultimately, became purchasing manager of the company's nutritional home care division (later named Caremark).


“I always wanted to be an entrepreneur,” says Ron. While working for Baxter, he met a young college intern from Atlanta's Morehouse College who had an entrepreneurial urge too. After a year of kicking around the idea, the two launched COSH Healthcare in the Atlanta area in 1988. (The “CO” comes from the first two letters of his partner's name, Marlin Cousins, and the “SH” from “Shinault.”) Ron, Karen and their two young children stayed in Chicago while Cousins ran the business in Atlanta. But things quickly changed.


Nine months into the venture, Cousins decided to take a full-time job in industry. “We were stuck with a choice,” recalls Shinault. “We either had to come down here and go full-bore with the business, or cut our losses and get out.” So, in July 1989, with their first- and fifth-grade children in tow, the family relocated to the South. Ron's mom quit her job in New York and came to Atlanta, in order to manage the new business's finances. And Karen put to work her sales and marketing background to get the business off the ground.


Gotcha Covered

In 1988, when COSH got started, the industry was in the throes of a glove shortage sparked by a sudden awareness of the dangers of bloodborne diseases. Sensing an opportunity, Shinault stocked plenty of gloves, then pounded the pavement, trying to pick up customers among Atlanta-area hospitals.


Soon, he landed Emory University's School of Medicine animal research department. “The thing that made that relationship [with Emory] grow was their need for med/surg supplies and equipment as well as scientific supplies,” says Shinault. That meant that in addition to med/surg and diagnostic supplies, COSH offered lab-related items as well, such as freezers, ovens, instrumentation and lab disposables.


“We positioned ourselves as a one-stop shop, broader than a traditional med/surg distributor or a scientific lab distributor,” he says. “We really created a niche, which we rolled out to other academic research departments.”


Working in COSH's favor is the fact that many academic research operations rely on federal funds, and hence are required to conduct a certain percentage of their business with small or minority-owned businesses. COSH qualifies as both. The state of Maryland has a particularly strong Women/Minority Business Enterprise programs, says Shinault, who used those programs to build relationships with the University of Maryland and, more recently, Johns Hopkins.


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''Our customers are enthusiastic about identifying small businesses with a proven track record and competency.''

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Another opportunity for COSH has been the consolidation among lab and scientific distributors. “[Our customers] are enthusiastic about identifying small businesses with a proven track record and competency,” says Shinault.


Smooth Operation
Shinault's logistics and transportation expertise has served the company well. For example, COSH supplies its broad array of products and supplies from a 5,000-square-foot warehouse, with inventory turns ranging from 18 to 20 a year, sometimes more. Shinault relies on manufacturers to stock and ship equipment on an as-needed basis. “We position ourselves with our customers so that we know what their expectations are in terms of delivery times,” he says.


“Our biggest challenge is to know what our customers need,” he continues. “We identify those things where we can use our sourcing expertise to their advantage. By locating hard-to-find items for them, we take away their procurement and product specification responsibilities and give them the value of our expertise.”


COSH has found the Internet to be “a fabulous equalizer,” he adds. It helps the company source supplies and equipment, and to be more efficient in processing orders with its suppliers. “It has helped us compete as effectively as the big guys,” he says.


In some cases, COSH has transformed its small-business and minority-business status into business opportunities with the big guys. Many Fortune 500 companies are seeking small and minority-owned business partners in order to work with government and academic entities, says Shinault. In April, COSH kicked off a program with Allegiance Scientific Products. Among other things, it allows customers to place orders with COSH over the Allegiance website.


“It's a mentor/protégé relationship,” says Shinault. “Allegiance will provide us the technical expertise to help us grow our business and provide our customers with the exact same things that an Allegiance lab rep would provide.”


Future
At $1.2 million in sales, COSH has some room to grow. In fact, Shinault would like to see the company exceed $5 million within several years. But while trying to grow, COSH will hold onto its status as a small business, which Shinault views as an advantage in the market.


“Everybody can relate to the fact that small businesses are the engine of the country,” he says. “When we promote ourselves as a small business, we gain access, because people like the competition and they like to facilitate small businesses servicing their needs.


“Constantly, we get the opportunity to clean up situations that large businesses have created because of lack of attention paid to the customer. Large companies can work hard to get a contract, but not to service it. They may have exceptional pricing, but their service deteriorates.


“The marketplace is beginning to understand that competition is great. It puts the customer in the best position, because they have people vying for their business.”


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Association Promotes Supply-Chain Opportunities for Minority Companies
COSH Healthcare COO Ron Shinault also serves as the current president of the National Minority Medical Suppliers Association, a nonprofit organization comprised of 16 minority-owned medical supply companies across the country.


Affiliated with the Health Industry Distributors Association, NMMSA was founded in 1993 during two Department of Veterans Affairs symposiums held in Chicago. The organization promotes equitable inclusion of minority-owned medical manufacturing and distribution businesses by public agencies, and seeks to promote meaningful dialogue among minority-owned medical manufacturing services and distribution firms, and large manufacturers, distributors, and providers.


Since its inception, NMMSA has worked with manufacturers, the Department of Veterans Affairs and the Department of Defense to draft recommendations for the inclusion of minority-owned medical suppliers in the federal procurement process. NMMSA recommends including 8(a) and non-8(a) companies as prime contractors, or in teaming or partnering arrangements.


Shinault has been involved with NMMSA for eight years. “Since I first became aware of the organization, I have shared its objectives – to create a voice focused on the fair and equitable opportunity of minority-owned businesses to participate in the health care distribution supply chain,” he says.


NMMSA has two business meetings a year. Its next annual meeting will coincide with the HIDA Annual Conference in October in Chicago.


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