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Manufacturer of Precision Components
Background
Twenty years of preparation has afforded the firm a niche within one of
today's most demanding and volatile industries, the machine tool industry. Many
Fortune 500 companies, which once heavily relied on domestic suppliers for their
precision manufacturing abilities, have turned to foreign producers for their
needs.
The firm started as a traditional tool and die shop. Step by step,
management built the organization by adding machinery and employees, all
supported by growth from an expanding customer base.
In the late eighties, the firm’s sales eroded as many of its local customers
embarked on the latest trends sweeping the nation; internal and external
downsizing, minimizing the number of quality suppliers and requiring each to
provide more of the total product, as well as global sourcing. For a small firm
this was devastating, but firm persevered. At time of certification the
firm employed 35 people and had net sales of $2 million.
Assistance Provided
The recovery strategy focused on two areas of assistance;
management information systems (MIS) and strategic marketing.
The firm, not fully comprehending the extent of each project, or for that
matter, the final outcome, chose to undertake the MIS project first. The first
phase of the project was a needs analysis and recommendations for a new system.
The second phase, dependent on the clients agreement to the
recommendations of the first phase, was implementation of the new system.
Early on, during phase one, the consultant recommended the best strategy
would be to continue using its current management information system. The
analysis concluded the current software was better than other software packages
available on the market at the time. The problem was, that when the initial package was
purchased and installed, not all of the modules were made operational.
The project then became easier; do a complete set up of all modules and proceed
with the implementation and training. The project seemed to be on the road to
success, but was interrupted when the firm became too busy to participate in the
implementation. This created a problem. An agreement between the consultant and
the firm put the project temporarily on hold. Starting the project again was
difficult due to timing and scheduling problems, which resulted in a termination
of the project with the original consultant.
Once the firm was able to go forward with phase two of the project, the NYS TAAC
approached the developer of the software the firm was using and found they
offered training sessions. All parties agreed this was the best solution for the
firm, and a contract was executed with the developer of the software to provide
the implementation and training required.
This completed project has been very successful. The firm is able to track all
orders from the time they are entered in the system until the product is ready
to be shipped.
Once the information system was operating efficiently, the strategic marketing
project started. The consultant provided the firm with valuable information and
tools to be applied in business. The tools consisted of a mission and vision
statement, which provided an identity to the firm and identified the firm's key
players.
A SWOT analysis (strengths, weakness, opportunities and threats) was performed
to determine the strategies required to ensure the best alignment or fit between
external environmental opportunities and threats, and the internal strengths and
weaknesses of the organization. Helping to ensure that fit, an industry outlook
and key industrial groups were studied as potential avenues for the firm to
pursue.
A crucial element for the firm was the information gleaned from its customer’s
perception of the firm's products and abilities to perform. These findings were
used to develop the marketing communication program and to recommend marketing
tools.
Rounding out the project was a quarterly action plan, which detailed marketing
and sales milestones, as well as a seven-year directional objective plan.
The results of the strategic marketing project were hands-on tools and
techniques designed to guide the firm toward future growth and prosperity.
Project Results
Both projects have been successfully completed and implemented. The results have
been more than anticipated. Controls and efficiencies have reached an all time high for
shop orders and office paper flow. Problems with deliveries, parts shortages, and
quality, which at one point in the past three years hindered the firm from
growing, are now almost obsolete.
Targeted industries have been contacted, resulting in new business in new
markets, opening the door for the firm and easing its dependency on one
industry.
Currently the firm employs 56 (an increase of 60 percent since certification) and has net sales of
$4.75 million (an increase of over 110 percent since certification). The firm is also contemplating
adding a second and third shift to handle the influx of new business.
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