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Distribution Solutions International, Inc.
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DSi Takes Another Step Up

Northwest Michigan Business News
November 2003
By John Dew

Traverse City, MI, November 2003 - Distribution Solutions International (DSi) is a ray of sunshine through the economic dark clouds of the past two years. In March 2002 the company moved to custom-designed, distinguished new offices encompassing much of the first floor and the entire second floor of the Harbour View Centre in Traverse City.

By mid-November they will add the fourth floor, as well. That will bring their total at Harbour View to over 30,000 square feet. The fourth floor space will contain executive offices along with sales and marketing, air freight and a newly-formed digital media production center. Originally designed to accommodate condos, the fourth floor features soaring windows, high ceilings and large balconies with dramatic bay views.

Last December, DSi also expanded their services with the addition of a state-of-the-art distribution center comprising five million cubic feet of climate-controlled space centrally located in Memphis, Tenn. The facility adds yet another dimension as DSi now can receive, store and assemble merchandise shipments for their clients. In the process, DSi increased its Traverse City employees from 38 to 63 employees, and another 27 in Memphis.

The company was founded in 1990 by David Mathia, along with his wife Faye, as an innovative option to meet the national distribution needs of corporations. Today they handle distribution for five of the leading pharmaceutical companies in the world.

Beginning in 1997, DSi branched out to offer management and coordination of delivering separated luggage for airlines. With the recent addition of United and America West, they now handle nine of the world's leading airlines. If you arrive at the airport but your luggage doesn't, chances are that DSi will be arranging to have it delivered promptly to your door.

With a roster of billion-dollar corporations like Merck and Pfizer, one might wonder why these companies find it more advantageous to work with DSi rather than handling distribution in-house.

David Mathia, CEO, pointed to three distinctive advantages: focus, economies of scale and detailed information systems through a proprietary software program, developed by DSi, called LogiTRACK Information Systems.

"Coordinating shipping and delivery is not the core business for these companies, whereas it is our entire focus," Mathia said. "Furthermore, we have the advantage of maintaining regular relationships with our vendor delivery network everywhere." Dennis Garrow, Chief Marketing Officer of DSi, pointed out that DSi can negotiate with vendors by representing not just one company, but on behalf of dozens of the Fortune 500 members.

"As a result, we can usually provide our services for no more-and often less-than they could do it themselves," he said. "And we save them space, supplies and personnel in the process.

Marketing Director Pat Lott said several more major clients are on the verge of committing to DSi. Mathia envisions the company to grow to four times its size in the next three years.

"We are proud of the fact that DSi is completely debt-free," Mathia said. "But continued growth is important for security and survival. DSi will continue to be the leader.

"With the rapid growth of the company, it becomes difficult to maintain the same culture as when a company is very small and intimate.

DSi has a reputation of being one of the best companies to work for in northern Michigan. Much of this stemmed from a "family" culture espoused by the Mathias and the executive team led by Shannon Core, president of DSi.

Core acknowledges the challenges, but feels DSi can continue to attract and keep the cream of the personnel because of the caliber and philosophy of the department management leaders.

"We believe that there are three components to our success: our clients, our vendors and our employees. All are critical and all three are treated with equal importance and priority," she explained.

When it comes to selecting new employees, attitude is favored over skills. Mathia believes skills can be taught, but a self-managed person with a positive, supportive, team attitude is much more difficult to find. The company fosters an open environment that encourages employees to grow and feel they are directly contributing.

Recently they held an annual meeting of all employees at the Great Wolf Lodge. Families were invited to join in the fun following the meeting. In 1999 DSi started a new annual tradition by bringing clients, vendors and employees together in Traverse City. Last year, well over 200 top executives and representatives came to the Grand Traverse Resort in June for a series of workshops, discussions and meetings.

Also unique is a "phantom stock" plan at DSi where all employees share in year-end dividends based on the company's growth and profit during the year.

The philosophy is apparently working, as there is little employee turnover. DSi vendors have long-established relationships and when it comes to DSi's relationship with their customers, it just doesn't get much better.

"We have never lost a client," Mathia said.

BN Article originally printed in the November 2003 edition of The Business News.

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