Giving back

FirstMerit Legacy Award

When A. Ray Dalton sold a minority interest in his company, PartsSource Inc., in 2008, he could have easily taken the proceeds and distributed them to the three partners. But Dalton, founder, president and CEO, knew the company’s success to that point and its plans to take PartsSource to the next level were all directly linked to his dedicated staff.

So when the deal was made with Polaris Venture Partners, Dalton made the decision to share 5 percent of the proceeds with his employees.

In efforts to distribute the compensation fairly, each of the company’s nearly 175 associates at the time received a portion of the proceeds from a formula based on tenure and earnings. Meaning lower-paid associates who might have worked at PartsSource for a longer period of time received as much or even more than higher-paid colleagues who were newer to the company.

In total, more than $7.5 million was distributed to employees. Dalton’s generosity and his compassion for his employees affected lives personally and professionally. And, in the end, his decision left a print on the local economy when that money funneled into the purchases of homes, investments in college educations and the like.

Dalton has dedicated his life to finding ways to reduce the cost of health care while creating economic opportunities for his employees and the community. Before PartsSource, it was OneSource Services, and before that, it was National Medical Diagnostics, both of which he sold to General Electric Co. Whether with Aurora-based PartsSource, a supplier of medical replacement parts, or any of the previous six companies he founded, Dalton’s commitment hasn’t wavered.

Dalton sold a minority interest in PartsSource to maximize the company’s corporate value. And, in doing so, he not only gave back to his employees, but he also positioned the company to grow, to find new ways to reduce health care costs and to add employees. All of which, ultimately, lead back to an economic contribution to the community. And, in recent years, PartsSource has accomplished every element on that list.

At a time when health care costs have skyrocketed and many companies within the medical realm have been in financial flux, PartsSource realized it needed to focus on customers by offering a new value proposition. That has meant the development of PartsSource eBusiness Solutions. The new strategic direction has required a substantial investment but has paid dividends as the company works with customers in Northeast Ohio and around the United States who are under enormous pressure to deliver quality health care and cut costs.

The Cleveland Clinic, a PartsSource customer, estimates the manpower savings of working with PartsSource is upward of an hour per order for each technician. With Dalton’s emphasis on quality and timely service, it’s easy to see how PartsSource has grown so rapidly.

Since Dalton founded the company in 2001, its list of customers has grown to more than 10,000 technicians who service more than 50 percent of the country’s 5,800 hospitals. PartsSource strives to provide individual service, even though it sources more than 1,000 parts each day.

Dalton expects that the need for cost-cutting in health care delivery will only be exacerbated in the next decade, leading to an increased demand for PartsSource services, including its eBusiness Solutions, and leading to the company’s continued growth. In the last four years, PartsSource saw an increase in sales of 197 percent.

PartsSource’s growth even through the depth of the recession is attributed to its ability to meet the needs of traditional clients and reach out to new clients with its eBusiness Solutions.

That growth has also meant a demand for new jobs. PartsSource increased its head count from 110 in 2006 to 201 in 2007. Today, the company employs more than 220 people. At a time when unemployment is high, Dalton has been able to increase his staff by 118 percent in the last four years. Four classes of new customer service representatives have already been trained or are scheduled to be trained in 2010.

As a person who has spent a lifetime establishing and growing businesses, Dalton sets high standards both professionally and personally and accepts nothing but excellence from himself and those around him. His ability to guide, empower and understand, both his employees and his customers, is what has led to so much of his and PartsSource’s success.

How to reach: PartsSource Inc., (877) 497-6412 or

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