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Successful Businesses Require Courageous Decisions

Updated: Sep 1, 2023

Hello Everyone,

It’s newsletter time again. As usual, it is very busy at Lone Star these days. Some highlights for the month include kicking off our Lean initiative on Monday of this week and we hit the ground running. Duggan Associates and Robert McAleer are partnering with us and he will be training Lone Star employees so we will be empowered to continue improving any/all aspects of the company using the Lean technics.

Alairo Validation

Alairo is dominating our R & D and Professional Services efforts. I am convinced this new product will keep Lone Star top of mind in the hospital environment and allow our team to get into hospitals with something in addition to nursecall solutions. It’s proving to be the right product at the right time. We are learning that it appeals to hospital staff because it can analyze what is happening in the hospital environment, predict fall risk features, and centralized code blue. All of these features are in the base offering of Alairo, and it feels like we are on the right track with what hospitals need and want.

We have identified three sites where we will be installing the system, each with a different initiative to track so we can get three specific features of the system proven in live environments, each in a different hospital. This is an exciting time for Alairo. We designed this system to fit most hospitals' needs and, in every place, we have discussed or talked about the system, Alairo has created a lot of excitement and interest. With these initial installations, we will have the opportunity to prove what we have theorized in R & D. This product compliments Rauland nursecall in every way and uses nursecall data for some of the reports. We hope Alairo will be a product other Rauland distributors will find valuable in addition to all their Rauland nursecall installations giving Lone Star another income stream. We are working with the SD6 partners to make sure Alairo fits all markets.

Supply Chain

We are still struggling with supply chain shortages on some projects. Our main supplier, Rauland, tells us their supply of chips is improving, but they are still on allocation with some items that have impacted some deliveries. The improvement is slight at this point but should get better over the next few months. Some of the chips from Intel, for instance, that had an 83% allocation, have improved to 52% allocation. This allowed Rauland to build some products in higher quantities and even contract to build some items in other Ametek plants to attempt to catch up with demand when they have the components. They need to build an item like a corridor light for instance. Rauland management still feels it will be the end of the year before they get caught up and the first quarter of next year to have stock on all items. Our purchasing and operation folks are working with Rauland to identify what items we need each month to attempt to ensure we have what we need to finish projects that must be completed to make promise dates and fit with construction schedules. This is causing Lone Star a lot of extra work to manage these projects to this level, but that is the market these days. Hopefully, over the next few months, Rauland and other suppliers will get caught up on product deliveries and we can finish some projects that have lingered on too long. We are doing everything we can to keep our customers informed and satisfied with Lone Star in these trying times. We appreciate what you are doing to keep our customers informed.

Selling Our Fire/Sprinkler/Inspection & Access Business

The other big news this month was the sale of our fire/sprinkler/inspection and access part of the business in the Arkansas market to State Systems based in Memphis. State Systems is a company that was started by Bob McGrath and his father in the mid-’80s and has grown to become a dominant player in the Tennessee and Arkansas markets. State Systems has about the same number of employees and revenues as Lone Star Communications. They are a quality organization that is well-organized and well-run. As I mentioned in my notice of sale earlier in the month, State Systems is as dedicated to the fire and sprinkler market as Lone Star Communications is to the healthcare market. Their commitment to their customers and their employees is second to none. This is a great place for the Lone Star employees that were transferred to go and a great place to continue their careers. Bob McGrath has been very fair to all issues that have arisen before the transfer and just after the sale. So far, the transition has been smooth. Lone Star and State Systems share offices in the Little Rock and the Springdale markets so that we can ensure a smooth transition of customers and ongoing projects. We are sharing technicians when needed to make sure no customer misses any service and all jobs are completed as agreed. Though it is difficult to see our employee friends move, I know State Systems is allowing this talented group to continue to advance their careers in this field, an opportunity they would have missed at Lone Star as we shift our focus to healthcare. Let’s all wish our fellow employees joining State Systems the best of luck now and in the future. They will be missed.

Well, that’s all for this month. There are a couple of additional articles in this month's newsletter on the Lean project and the Alairo product, so check them out for more detailed information. Thanks, everyone for what you do for Lone Star Communications. We appreciate each and every Lone Star employee, and we know that each of you makes Lone Star a better company.

Thanks for being here!

- Ray, President



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