The firm is a manufacturer of small wooden kazoos, tops, and whistles. At time of certification, the firm had 12 employees and annual sales of approximately $638 thousand.
As a producer of all wood kazoos, tops, and whistles, the firm was import impacted by penetration of domestic markets by overseas manufacturers, and the inroads of alternative fabricated materials used to produce these products.
The firm had begun addressing the materials issue by experimenting with various types of fabricated materials, while maintaining an active presence in the market by attending trade shows and investigating niche markets that still sell only all wood toys.
Diversification into new markets that would capitalize on the strengths of the firm's current products was the firm's primary strategic objective. The action necessary to achieve this objective encompassed a planned yet action-packed marketing effort that targeted new business from current and potential customers.
To succeed in new markets, three critical functions required attention. The firm, with TAAC assistance, needed to develop a plan to build an organized marketing function and evaluate opportunities for new business. This project took into consideration the firm's current activities in marketing and then developed the structure and tools needed for obtaining new business. The project cost approximately $20,000.
A second project addressed management's need to operate and understand the techniques and procedural aspects of its automated equipment. This project would address how to design and operate the automated equipment to benefit from the machine's vast capabilities. This project would cost $10,000.
A third project would assess the firm's needs and capabilities as related to its information system requirements. Based on the analysis, the consultant evaluated the current implementation of the "Prosper" package. Recommendations were made, along with a plan of action to integrate the selected solution. The project cost was estimated at $25,000.
With two of the three projects completed, the firm was experiencing a lot of new interest by customers. Existing customers are pleased with the new aggressive stance to sales and many new, prospective customers are just now finding out about the firm.
The firm is a manufacturer of precision sheet metal components used in the computer industry. At certification, the firm had 20 employees and annual sales of approximately $2.8 million.
Increased foreign competition and the firm’s reliance on one customer for 90 percent of sales resulted in shrinking sales and yearly net losses from operations. To regain profitability, the firm needed to address two areas to replace lost sales-- technology and marketing.
To strengthen its short-term position, the firm wanted to transform the operations into a "paperless manufacturing" environment and leverage this strength with the development of a formal marketing plan that would focus on industry diversification.
To assist the firm on its mission to achieve "paperless manufacturing," the manual Statistical Process Control (SPC) function needed to be replaced with an electronic substitute, and the CAD function needed to be upgraded. It was estimated the firm could incorporate a totally electronic SPC system on its present computer platform for $30,000 to $35,000. Additionally, it was estimated the CAD system could be upgraded for $40,000.
The marketing component would tie all pieces together into a master plan that would lead to much larger sales volume. Before increased foreign competition eroded the firm's sales, a formal marketing plan didn't seem to be a critical need, but the firm's current business climate made it a necessity.
The firm is very pleased with the results. Sales appear to be the best in the history of the firm, with revenues exceeding $5 million. The firm is respected within the industry for its level of quality and technology. It was asked to partner in a national program sponsored by major OEMs to showcase the talents of the firm, as well as serve as an example to other small manufacturers that high technology is within reach for manufacturers of all sizes.
The firm was founded 115 years ago in Chicago, Illinois, when two brothers from Canada started the business in an eight-foot-square, unheated room located in the rear of a boarding house.
In the early years, one brother designed the tools while the other built the tools. Various devices and tools were perfected, mainly of and related to the bench lathe line. Even though a number of products were built and sold, it was the cataract line of bench lathes and attachments that was instrumental in making the firm what it is today.
A totally separate set of events that took place during the First World War would also shape the firm’s future. A small machining company located in Rochester, New York, started manufacturing collets and feed fingers. This company also was experiencing rapid growth and was soon seeking additional space. The search ended when a much larger shop was found and opened in Elmira, New York.
Around that same time, the firm was experiencing growing pains, which precipitated its relocation to Elmira, New York from Chicago in 1931, and on January 1, 1938, both firms merged and continued expanding by adding to both the facility and the family of products.
Management realizes that to remain competitive they needed to continually improve the firm’s presence in the rapidly growing and demanding industry the firm serves by way of new products and accompanying machine tools. Thus, they developed steps to strategically transform the firm into a stronger, more flexible global manufacturing company. Many of these steps have led to mergers and joint ventures with companies of complimenting products.
In the recent past, the firm has experienced declining sales each year, worldwide. Domestic sales are off 50 percent; European sales have declined close to 30 percent; and the Asian market is currently being fueled by China, whose national economic plan is to develop its own local machine tool manufacturers, making it more difficult to import machines if a similar machine is available from a local Chinese manufacturer. At certification the firm employed almost 1,200 and reported sales of $170 million.
The TAAC performed a diagnostic of the firm’s operations, which concluded the firm must develop ways to improve in the areas of marketing/sales communications and new product development in order to compete more aggressively against its larger competitors.
The recovery strategy would address the firm's need for a structured, all-encompassing marketing communications program. This program would combine the firm’s entire product offering (which is now scattered), into one corporate identity; providing similar logos, product messages, and printed material. Moreover, it would align the firm’s core products with a customer base more appropriate for the equipment’s capability.
The second part of the strategy included new product development. The firm has been facing competitors who offer on-line user friendly machine software. Today’s customers are expecting more and getting more from their machines, and one way of accomplishing that is through easier yet more sophisticated software to run the machines at improved productivity.
Both projects have been successful. The marketing communications project, the first to be addressed, refocused and organized the firm's scattered marketing efforts. This project assessed the equipment-machine market by researching the background of the industry and conducting a competitive audit with an understanding of the overall strategy of the firm’s desired direction. The outcome was a clear direction for the firm’s market position; a unique high-impact corporate identity that will communicate a clear value proposition to the selected target audience; plus, a well defined tool kit that will be instrumental in reaching the firm’s targeted audience.
The success of this project can be measured by the increase of $10 million dollars in sales inquiries shortly after the plan had been implemented.
The firm is a manufacturer of industrial grade vacuum pumps, located in Brooklyn, NY. In recent years, foreign manufacturers have become major competitors in the firm's markets, and in some instances, have gained disproportionate shares of the market segment. Basic reasons for the wide acceptance of imported vacuum pumps include a smaller physical size and lower price with higher speed designs.
The TAAC completed a diagnostic review for the firm that concluded the danger from imports was indeed real and becoming more intense. An adjustment proposal was developed to address areas of weakness for the firm in competing with foreign manufacturers.
New product development was the strategy chosen to help the firm recover from the adverse effects of lost market share. A scope of work was developed to assist the firm in the development of a new state-of-the-art vacuum pump line. The project addressed all issues from preliminary engineering specifications - through prototypes and debugging - up to and including a supplier list for required parts. A qualified industrial engineering consultant was selected and the project proceeded smoothly.
The firm has successfully fabricated and tested the new vacuum pump. The new pump has all the advantages of the imports, smaller in size and with higher speeds, but adds designed in durability which is lacking in most imported products. This new pump will allow the firm to again compete in market segments that were previously lost.
An upstate New York tannery operation became a TAAC client due to the effects of increased competition of imported products in the leather industry. The firm also struggled with the promulgation of stringent USEPA, NYSDEC and local government wastewater effluents standards, due to the capital, operation, and maintenance costs involved with maintaining acceptable wastewater contaminant levels.
The TAAC working with the firm identified wastewater effluent costs as an area offering potential savings because of possible inefficiencies resulting in increased wastewater flow and loss of recyclable process water constituents. This situation was then confirmed by three independent experts in the field of wastewater management.
The TAAC and the firm selected and contracted with a consultant who developed pretreatment alternatives and designed a new system of liquid treatment and solids disposal. The results of the completed project is a cost saving solution that assures adherence to all local, state and federal regulations.
The firm, located in Utica, NY, began operations in 1936, producing cloth roll towel cabinets and towel processing equipment for the industrial laundry and linen supply markets.
After WWII, paper towels began replacing cloth towels for hand drying in the United States. This loss of market share continued year after year up to the 1990s. However, the past seven years has shown an increased demand for more environmentally friendly products such as reusable cloth over waste producing paper. The increased cost of waste disposal is another factor that is casting a more favorable light on cloth towels. In the late 1980s, the firm replaced its old metal cabinet with a new plastic dispenser, which represented the first design change in well over 30 years. At certification the firm had 22 employees and sales of $2 million.
The TAAC completed a diagnostic review and an adjustment proposal that identified the need for improvement to the firm's computerized manufacturing and accounting systems. Sales revenue expansion had already been addressed in earlier technical assistance. The TAAC and the firm hired a consultant to develop an integrated Management Information System (MIS) that would run over a local area network.
The first phase of the project involved the evaluation and review of current systems and future needs. The consultant was then able to identify required hardware and software based on these findings. Both the firm and the TAAC agreed this phase was very successful. The consultant was able to lead management to purchase the exact needs at minimal cost.
Once the firm purchased the recommended hardware and standard software, the consultant spent his time on the complete implementation, installation, modification/customization, and training of essential personnel. The important component of this phase was the custom modification and enhancements. To reduce the up-front cost of software, a minimal system (including source code) was selected that met the core requirements of the firm. Extensive modifications and enhancements were then completed to ensure a successful implementation. All source code was then made available to the firm in the event modifications are needed in the future.
In less than six months the firm has a system that is exactly designed for its business; and, with minimal training, personnel are able to understand and use the system. This project, along with a completed marketing project, has given the firm the necessary tools to be competitive in the existing marketplace.
The firm is a manufacturer of zinc die cast components. At certification, the firm had 5 employees and annual sales of approximately $218 thousand.
In the early 1990s the bottom dropped out of the firm's belt buckle business. Product from the Orient began flooding the market at unheard of prices. The firm could not compete, and the owner had to start the long process of searching for new customers to replace lost sales. While searching for new business opportunities, the owner discovered the Trade Adjustment Assistance Program and decided the program could be an excellent vehicle to assist the firm in recovering from it's sales decline.
The business was analyzed for development of an appropriate recovery strategy. Manufacturing was found to be efficient and up-to-date for the firm's current level of sales. Financially, the business was sound, but declining sales threatened the firm's long-term viability.
In the machine tool trade, die casting is considered an art and often not easily perfected. This became the focal point for the recovery strategy. Over the years, the owner had been approached by various manufacturers to design and cast a number of different types of parts. Some were successful, some not. Once he was approached to design and cast a part that could only be successful on the market if it was produced in one step. Sounded easy, but the catch was the part had internal threads, which always require a costly secondary operation.
The recovery strategy focused on hiring a consultant to provide management with the training and education needed for the various techniques of one-step internal threading processes, combined with die cast mold making, at the same time building a prototype model that would produce wing nuts with internal threads and requiring no secondary operations.
The prototype machine was successfully built to cast and internally thread six wing nuts at a time. This prototype model was designed with the latest hydraulic, water cooled techniques. It’s designed to have all six nuts cast, threaded, and ejected at the same time, providing consistent quality throughout the entire process.
Management was excited by the future prospect of many opportunities for the firm’s newly acquired expertise. Opportunities that would provide exciting challenges for the firm to design and build parts for new customers who in the past had to be turned away because the firm lacked the expertise.
The firm is a manufacturer of costume jewelry. At certification, the firm had 14 employees and annual sales of approximately $2.5 million.
Competitors, mainly from the Orient, produce product at such low prices that the firm was being squeezed out of the market. In the first six months of 1998, the amount of jewelry produced by the firm was cut in half due to its customers buying imported product.
The recovery strategy pinpointed product design as the area most needing assistance. The firm lacked the skills to take a concept design and construct working models that would be used to build master molds. To correct this lack of capability, the project would require an external model/mold consultant to analyze current products and develop prototype products that were in line with the corporate strategy. The project was designed to be market driven, and to transfer this skill to the firm upon completion.
The four major components of this strategy were:
- Identify the specific requirements in order to determine the steps needed to build the prototype models and molds.
- Prepare drawings for the master models' components to assure uniform quality.
- Design and build the prototype models, and produce specifications for master molds.
- • Teach management the techniques of model/mold making.
Management learned to produce product that is market driven and produced in a very timely manner. New and fresh product is arriving in the marketplace when the demand is highest. In many instances, the firm is able to beat the imports by weeks.
The sales manager presented a pilot program to principals of a large theme park conglomerate whereby, he proposed to place product in four of the theme parks. The conglomerate agreed to the pilot program with evaluation the program after one year. The results were sales of more than $80,000. Since then the theme park conglomerate has offered the firm access to 26 of their theme parks in the United States and three theme parks in Europe. This new relationship required additional workers to be hired by the firm and has management very optimistic for the future. A year after completion of the project net sales topped $4.2 million, up from a low of less than $1 million in 1998.
The firm produces high-end, high performance audio/video components for the consumer durables market. The problem the firm faces is competition from imported products from Pacific Rim countries that can sell their components at below cost because they employ cheap labor and use inexpensive materials. At certification, the firm had 17 employees and annual sales of approximately $1.7 million.
Because the firm cannot compete on price alone, management realized the need for a dynamic advertising/promotional campaign. The firm lacked the expertise to develop a campaign in house. Thus, every new technological development, cosmetic change, and/or product enhancement the firm made lacked promotion. As a result, the firm's market share was eroding.
The recovery strategy proposed developing a strong, action-oriented, advertising/promotional campaign. The campaign was based on the features and benefits of the firm's product line and developed to promote the firm's products to buyers of excellent quality, state-of-the-art equipment. The campaign was accomplished at a cost of $60,000.
Once the campaign was successfully underway, certain information began to flow into the firm, such as the public's response to the firm's product offerings. This information helped the firm evaluate the product line's cosmetic features in planning for next generation product. As a result, a second project, a new front panel design for the next generation of product, was implemented for a cost of $15,000.
After the firm had been introduced to the general public in a big way, and the cosmetic features of the product line had been changed, the need for UL/CSA certification was addressed. UL/CSA certification was completed at a cost of $10,000.
The results from the projects exceeded original expectations. During the first year after completion of the projects the firm nearly doubled sales to $3 million and increased employment by 28 workers. The firm also received its largest contract ever when it signed with a 40-store electronics chain to supply its complete product line. Management expects more of the same for the future, as brand name and product recognition continues to increase for the firm.