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Manufacturer of Textured Metal Components
Background
The firm is a manufacturer of textured metal products. At
certification the firm had 42 employees and annual sales of approximately
$7.8
million.
This niche producer of textured metal products got its first big boost when the
Unisphere, constructed for the 1964 New York World’s Fair, had the firm’s
textured metal products representing each continent’s land mass.
As the demand for textured metals increased, the firm kept pace by accelerating
its growth both in facilities and jobs, and as the business grew so did
competition, which spurred the firm to focus on niche markets. That focus
continued the firm’s growth and expansion until the late '90s when the market
started to soften. By that time, many more foreign competitors were entering the
textured metals market creating a significant increase in imports and resulting
in a significant decline in margins for the firm.
Niche marketing has created a new need for the firm for which management
realized they do not have the internal expertise. So they sought help from the
New York State Trade Adjustment Assistance Center (NYS TAAC).
A review of the complete operations of the firm revealed that although the
market for the firm’s capabilities was growing and manufacturing was adequate
for the output of the business, sales representation was weak. Other problems
brought to light were the firm’s limited marketing expertise and the lack of
internal systems.
Assistance Provided
The recovery strategy embraced by management would provide the firm with
specific strategic market/business planning, focused on market identity, tools
development, and sales growth. To support the anticipated increase in sales,
manufacturing had to improve and expand. The recovery strategy also emphasized
the need for the firm to engage in an evaluation and implementation of a
complete integrated management information system (MIS) that would support the growth of the organization.
The first project addressed the specific systems’ requirements, with the outcome
of a precise system recommended and implemented. This system has streamlined the
workflow, providing everyone with accurate and timely information such as order
status, customer profiles, and a paperless credit procedure.
The strategy for short- and long-term
viability articulated the need for a formal, structured, comprehensive marketing
plan that would include a mission statement, evaluation of current market focus,
characteristics of potential new customers, and short- and long-range sales goals
and alternative strategies. The marketing plan would also include
information from past and present customers and a random sample of
non-customers, as well as focus on product development.
Project Results
The owner stated both projects are a success. The integrated MIS provides timely and accurate financial reports. Both
technical and sales information is used to support the new business
development efforts. Now accurate information is immediately accessible.
The owner and his management team have also gained a number of benefits from the
extremely successful sales and marketing project. First and foremost, the
project provided a sound and precise road map for the owner and his management
team to follow. The plan has given the team confidence and control that had
never before been part of the decision making process. Customer feedback was
enlightening and transformational for the firm. Pricing, an area thought to be
well within industry guidelines, appeared to be a major issue with the firm's
present and past customers. Armed with this information, a new emphasis was
placed on pricing and the different components of this aspect of business. The
project additionally established a key account marketing strategy including
customer communications--sales and marketing tools, including an updated web
site and the creation of a company video and a new sales structure to support
this approach.
Early results have shown improved backlog to over a month compared to just one
week on shipping an average 900,000 tons/month, an increase of 20 percent from
one year ago. Moreover, gross margin has improved more than 3 percent.
A non-tangible benefit of the successful projects is improved employee
morale. The shop is operating more smoothly, there is an increase in
productivity, and less scrap is produced, which translates to improvement in the
bottom line.
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