Background

This business began when a group of engineers, who would meet regularly to swap invention ideas, decided for protective measures to incorporate. On September 13, 1978 the group incorporated in New York State. However,
it wasn’t until 1982 that the firm hired its first full-time employees, as that was the year the four founders secured a significant amount of venture capital. It was also the year the firm developed and began marketing a microprocessor-based motion controller for controlling servomotors in automation applications for general purpose. The first products offered were single-axis motion controllers based on Intel microprocessors.

For the next 15 years, these Rochester-based engineers introduced new products as often as they could with very little competition. But by 1996, foreign competitors had invaded the market in grand fashion.

Over the next few years competitive pressures continued to mount, making every sale harder to win. European presence strengthened, and rapid advancement of technology was becoming more than the firm could handle. Another rapidly advancing development that is still powerful today, is one manufacturer being the prime producer and integrator of a project.

Management knew the firm must maintain a presence in the industry with product development a key priority, but they didn’t have the expertise to handle all of the challenges required to grow the business.

Assistance

The TAAC performed a diagnostic of the firm’s operations, which concluded the firm must develop ways to improve externally in order to compete more effectively.

The recovery strategy focused on the firm's ability to market and sell its products in different parts of the World that are closed to the firm because of the specific standards required by these countries; specifically CE designation. This strategy was selected because many macro forecasters and industry experts projected little-to-no relief from the litany of factors that have decimated the firm’s current domestic markets. Consequently, the firm looked to penetrate selected foreign (mainly European) markets initially for the incremental revenue to offset domestic losses. And for the long-term the firm looked to expand total sales revenue as domestic markets recover.

The strategy called for the firm’s products to be labeled with the CE Mark. The CE designation tells millions of European consumers the manufacturer, no matter the location, has subjected the product to a variety of tests and the product meets stringent health, safety, and environmental regulations

Results

The firm has gained a number of things from this successfully completed project. First and foremost, all products being offered now meet the stringent electrical and mechanical code and have passed rigid testing of the units. Now, anywhere in the world the firm is selling its units, the customer will have the assurance that it has been thoroughly assembled and tested meeting the CE requirements signified by the attached CE Mark.
European markets, once closed, are now open to the firm to sell its products. The firm has begun attending a number of key European trade shows to aggressively start the selling process. The outcome from these shows has been tremendous.

Additionally, the firm is in serious negotiations with two very large European firms, and if selected by these firms the orders would amount to well over 5 million dollars spread over the next seven years. Employment has remained steady, but if either one of these projects comes through, management is forecasting a number of new openings, and anticipates they could add between 5 and 10 new employees.

This is only the beginning for significant in-roads to overseas markets. If the interest generated by the trade shows is any indication, the firm will experience an increase in sales and employment. Management is pleased with the results thus far and encouraged to see what the near future will bring.

Background

The firm is a manufacturer of precision machined components used in the automotive, office equipment, and computer industries. At certification, the firm had 25 employees and annual sales of approximately $2 million.

During the early '90s, many of the firm's Fortune 500 customers embarked on a campaign designed to shrink their supplier base from thousands of vendors to a few hundred closely linked partners. The firm lost several contracts during this process, when imports were commanding a larger share of the market as the large OEMs formed strategic partnerships off shore. By the time of certification revenues were at a point that could no longer ensure the future operation of the business.

With the TAAC’s help, management identified areas that if improved would ensure the long-term viability of the business. These areas included a product line that was mature and, at best, stagnant; weak sales representation; and inefficient manufacturing processes.

Assistance

The recovery strategy recommended that the firm attain QS certification of its quality system to attract and retain customers and increase sales. To achieve this, the following assistance was provided as part of the project:

• Evaluate current quality systems for compliance with QS-9000 requirements
• Educate and train the firm’s staff to facilitate improvements
• Identify required documentation and prepare plan to address needs
• Prepare required documentation and appropriate chart required for QS-9000
• Train internal auditors for continuous support of the firm's QS-9000 program
• Assist with implementing a quality system compliant to the latest edition of QS-9000 requirements

Results

Even before final certification, a local automobile manufacturer had approached the firm for a possible partnering opportunity. The magnitude of this opportunity included a multi-year contract beginning with an order of 250,000 parts the first year, increasing yearly until output reached 1 million parts per year. Employment would increase 5-10 people the first two years with the potential of more in the future.

Within one year of achieving QS certification, net sales increased 60 percent and employment increased over 20 percent. New bids for additional automotive work are expected to grow sales by an additional 15 percent. The firm is now the largest supplier of precision-machined components for two of its OEM customers.