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Manufacturer of Precision Mechanical Products
Background
The firm is a manufacturer of precision mechanical products used in the
computer, automotive, imaging, and office equipment industries. At
certification, the firm had 92 employees and annual sales of approximately $8.9
million.
The firm is a "world class" parts supplier that designs and builds tooling for
major high technology OEM corporations. The firm's primary manufacturing
strength is its engineering and precision tool making ability in conjunction
with exceptional quality levels, which is also its primary marketing advantage.
The firm has Computer-Aided Design and Computer Aided Manufacturing capabilities
(CAD/CAM) and recently instituted statistical process control (SPC). (SPC gives
the operator the responsibility to measure and certify quality.)
Although the firm has all the attributes to remain successful in the tooling and
machining industry, it was experiencing increased competition by foreign
suppliers. For example, the firm submitted a proposal to provide gage tolerance
components to be used in OEM copy machines. The contract, valued at over $4
million, was awarded to an offshore supplier. As both domestic and foreign
competition increase, the firm must have the management team and appropriate
systems in place to effectively compete.
Assistance Provided
To strengthen its short-term business position, the firm intended to continue
the successful implementation of a recently completed marketing plan that
identified the medical products industry as a potential market.
This required the development of a new corporate sales brochure targeted to new
customers in the medical products industry, at a cost of $30,000. The firm's long-term strategy was for expansion. The foundation for
this long-term strategy was the successful implementation of the marketing plan.
The corporate brochure development project would further assist the firm in its
long-term expansion strategy by expanding its customer base.
Project Results
Six additional direct labor positions were
created and filled, contributing over $150,000 to the local economy. Sales in
the medical products sector now account for 12 percent of sales, making the firm
less reliant on one sector of the market. The firm has recorded a profit each
month and expected to earn approximately $300,000 the first year after
implementation of the recovery strategy. The firm's bank, which had been
concerned about the lack of direction and net losses, now views the firm as a
viable, financially healthy concern.
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