Competing with Overseas Outsourcing

How Craftsman Custom Metals uses customer focus to remain competitive.

No matter what your company produces, you can't meet your sales goals and objectives unless every single employee -- including the guy who sweeps the floor -- is focused on the customer. I was able to reengineer Craftsman Custom Metals (CCM) from a high-volume supplier to low-volume, high mix stamping and fabricating company by finding a customer service niche by providing our customers with direct access to decision makers, quick response and the flexibility to make changes.

The company began its transition to cellular manufacturing in the late '90s when I was director of engineering. When I purchased it in 2001, I knew we had to concentrate on differentiating ourselves if we were going to survive the outsourcing movement to Mexico and China. We chose to focus on what we could do best -- manufacture highly engineered flexible volume products -- and moved the company focus to cellular manufacturing teams with dedicated equipment and personnel.

I believe if we had not transitioned to cellular manufacturing, we would not be in business today. Because the cell teams work on a product from start to finish, there is a feeling of pride and ownership in the work that translates into a higher quality product. In addition, because of their familiarity with the products, the teams provide insights that can lead to product or process improvements. The employees have enabled our company to compete in a rapidly shrinking U.S. manufacturing environment by producing highly engineered products with tight tolerances.

Every Employee Knows the Customer

Each CCM employee is dedicated to gaining an intimate knowledge of customer needs. Our cellular manufacturing processes combined with our quick turnaround prototype capabilities provide great value to clients where speed to market is vital, such as telecommunications, medical instrumentation and computer manufacturers. We have the capability to fulfill smaller runs, assemble non- sheet-metal components, test final products and ship to the end user.

We were able to move to a more labor-intensive manufacturing process with a decrease in actual labor costs. In order to change the paradigm, all team metrics were geared towards satisfying the customer.

If you walk through the manufacturing facility, you'll see that each cell has a production scoreboard that measures:

  • On-time delivery
  • Quality of the finished product
  • Safety/health of the work environment
  • Productivity
  • Satisfaction level of the customer

Transitioning to a New Environment

It took almost 18 months for all of our employees to feel comfortable in the new manufacturing environment. We held regular meetings and classes to teach new processes and expectations, and I moderated monthly town hall meetings to showcase new equipment and answer employee questions. During the transition to cellular manufacturing, I am proud to say that our employees grew to levels we had not anticipated. We found that employees who could not perform to the standards that were established by fellow team members left on their own. It was amazing to see how this worked.

The new environment forced micro-managers to share accountability with lower-level employees. The scoreboard allows everyone to see what the customer goals are and how they are being met. As a result, our employees have a great feeling of accomplishment and sense of pride. Working is more about making a difference for the customer by being more productive than just collecting a paycheck. In addition, our employees are continually fine-tuning our production processes to make them more effective.

We were able to reorganize our business model and manufacturing process because our employees saw the benefits. Our employee dedication has enabled us to develop a Start-Point CCM program to assist customers in proving product design and ensure manufacturability in a compressed timeframe. The New Product Introduction (NPI) cell, with dedicated equipment and personnel, does not have to depend on anyone else, which helps cut lead time for part development and production. Also, we have taken on additional risk from the design perspective by analyzing potential manufacturing failures before we complete the first production run.

We recently worked with a telecommunications firm to quickly design and produce a large chassis comprising more than 160 components. Within 21 days we had five prototypes of a complete chassis that the customer could test. By using our laser cutter we didn't have to set up turret presses with punches or wait for tools required for special shapes. A project like this would have taken weeks longer without a dedicated cell.

Lessons Learned

The most effective business practices we learned during the transition from high-volume metal stamping to low-volume, high mix could be applied to any industry. When evaluating your business model, consider the following:

  • Focus on customer needs and expectations.
  • Establish customer-oriented goals and metrics; communicate those to the employees on the shop floor and reward performance against those metrics.
  • Develop a culture of ownership.
  • Adopt and support a culture of empowerment and find employees who will thrive in that environment.
  • Delegate the decision making ability to key employees.
  • Refine your processes.
  • Stay current on the latest technologies.
  • Have fun. If it isn't fun, you won't succeed.

With an emphasis on cellular manufacturing, dedicated employees who intimately understand the customer's needs and the additional capabilities, I now oversee a growing 90-employee company with $13 million in sales last year. By focusing on the strengths of your organization and building the right team, you can deliver customer service and compete with overseas outsourcing.

Craftsman Custom Metals (CCM) is a design, prototyping and manufacturer of precision integrated sheet metal components and products located in Schiller Park, Ill. The company is fully equipped to produce quick turnaround prototypes and short-run orders as well as large volumes of quality goods such as encasements, chassis and other structural components. For more information contact: (847) 655-0040 or [email protected].

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