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 is a family-owned and operated business that designs and manufactures coordinate measuring machines of a rigid, moving bridge type. These electrical/mechanical devices are controlled by proprietary computer software packages. Management believes the product line is the highest quality available. All products are covered with a complete three-year warranty when the industry norm is one-year. However, the software developed to operate the machinery is old, slow, and interpretive versus compiled. Today's market for measuring machines is driven by the software. All competitive foreign products use compile code due to the speed advantage over the old style interpretive programming.
The firm sells its products to both light and heavy industrial concerns from aerospace to the automotive industry. The primary customer area is western New York with a few large customers located in California. Half of the sales are the result of direct efforts of the owners of the firm and the other half are handled by manufacturer’s representatives. The firm has had some success in the export field selling a few machines in Europe. Average annual sales approximate $3 million.
After a diagnostic review the TAAC and firm determined the recovery strategy focus is on software. The principal reason for concentrating in this area is to recognize where the market is rapidly moving, and to allow the firm to continue to be a viable force in the coordinate measuring machine market. Without new software development the survival of the firm would be in jeopardy from competition from Japan and Western Europe.
The TAAC, with aid from the firm, developed a scope of work for the development of new software. Approximately 50,000 lines of code, over 700 routines, and 250 algorithms would be included in the final package. It was also determined the new software must be compatible with current PC performance.
The new system has been completely prototyped and tested under Microsoft Windows. The programming environment is Microsoft Visual C++. The system can be divided into inputs: screen; mouse; keyboard; and coordinate measuring machine; and outputs: screen; and printer.
The screen is divided into seven parts: the digital readout; a count down box; the results area; a graphics area; pop-up and pull-down menus; messages and prompts. The digital area displays the X, Y, and Z position of the CMM in real time. The count down box is a user aid that prompts for additional data points from the CMM. The results area contains the results of all the measurements taken by the operator. The graphics area is a complete CAD-type graphics display of the data with the ability to zoom, un-zoom, and fit. The menus are mostly pull-own with some secondary pop-ups. The messages and prompts are displayed across the bottom of the screen.
Development of this software assures the firm can offer its product with all the "bells and whistles" that today's customers expect. Initial reaction by current customers is very favorable and many have indicated to the firm their willingness to see a product demonstration.