TOOL AND DIE MANUFACTURING
A tool and die manufacturing firm based in Connecticut had recently purchased new equipment during an expansion project. However, there was a significant decrease in their business because of their customer base outsourcing to machine shops in China, Brazil, and Mexico. The firm had a unique, low-cost process and new equipment, but they did not have the resources and know-how to break out of their regional box. As a result, their customers were leaving them for foreign competition that offered lower prices. Once the company realized its limitations, it decided to seek help.
The company contacted IntellaCore and requested a Basic Assessment in order to gain an understanding of how the global Internet economy was relevant to them as a company, their goals, and their objectives.
Right away, IntellaCore’s CorePath research team began examining the manufacturer’s position in the domestic machine tooling market and within the global marketplace. The team also analyzed the firm’s operations and developed several strategies for the company to develop.
The CorePath team’s discoveries included:
- The manufacturer had poor regional and national distribution systems
- Conditions in the tool and die industry throughout the world are similar to those in the U.S.
- A shortage of skilled workers
- Manufacturing is not appreciated
- Profits are down
- Fierce competition from China
The CorePath team recommended that the tool and die company:
- Focus on expanding to NAFTA countries
- Increasing domestic sales in the process
- Position its products as high quality, American made goods
- Develop a web presence
The tool and die maker and IntellaCore are now working together on a strategic Action Plan to address the areas of weakness and take advantage of opportunities.
Additionally, more IntellaCore resources are helping this company.
The CoreSource team, and its easy-to-us online purchasing/supply chain platform will help the manufacturer to streamline their purchasing process, saving at least 5% on purchasing costs.
The CoreConnect team will help them connect to the right people domestically and internationally to diversify suppliers while finding new distributors and agents.
The CoreNet team will work with the manufacturer to help them develop an effective business presence on the Internet to extend their business and its ability to engage and relate to buyers and sellers. CoreNet also performed a technology assessment of the company and is now provisioning better IT services while also reducing expenses on communications and IT.
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KNOWLEDGE BASED BUSINESS
A knowledge-based business, providing information, training, and advice was having trouble reaching consumers. They were a tradition business based on book sales and other advising and training services. The principal needed to travel all the time to present their services, and the organization had to work through the logistics of selling and shipping their paper-based products. By 2004 they were so busy in the daily hustle of the business and traveling that they did not understand the shape of the marketplace and how national or international factors were creating threats, but also opportunities, as the Internet changed everything.
CorePath helps the owner to understand how he was trapped by limited geography, and being too busy to adapt, not using the Internet to his advantage. Along with the CoreNet team, the focus really became an emphasis on how an Internet based strategy for marketing, and how the smart use of Internet services could reinvent this business. The key was not to think of this as coaching a business within regional borders, but to consider just what was going on in the industry nationally and internationally. CorePath identified important trends that fit their strengths, and what technology and services could do this for the company. A roadmap was now in place with milestones on how to reach the goal for the business.
A professional team of CorePath and CoreNet staff then worked to implement the roadmap. The company’s knowledge and expertise was crafted into good products that could be marketed and sold anywhere. The use of Internet collaboration tools, meeting and presentation tools, and the website, allow them to travel much less… but to contact and work with many more people.
The results have been noticeable in terms of revenue growth combined with cost reductions. As an organization they have been able to reorganize themselves to be efficient and effective. Revenues have increased 150% while costs have decreased 45% with less travel. More energy and better focus means the executives are working on their business; they are not trapped in their business, on an airplane, or a hotel room.
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HOW TECHNOLOGY SAVED BIG MONEY ON COST
A manufacturing company had been growing steady for 10 years. The two owners ran their company and 50+ employees well. People were busy and capacity was highly utilized. In fact, that was the problem. People were too busy. The owners really did not have time to focus on an important financial consideration to the business—COSTS.
Costs seemed to be growing and they could not get their arms around them. Several employees purchased supplies and materials, and everyone had their way of doing it. Purchasing was one aspect of their jobs, and not the main responsibility… but it seemed to take up a lot of their time with phone calls, faxes, and a lot of back and forth. The company did not really know, truly, if they had the best suppliers and the best pricing, and no one could look at the overall picture and put a game plan in play.
The CoreSource Group changed everything. Implementing a simple, online system, the company went from over five people purchasing materials to two. These staff members picked up the system in an hour of training. The CoreSource Group helped them talk to their suppliers and explained how purchasing through this system would make their lives easier, allowing everyone to communicate better, understand what was being asked for, and what was being quoted.
In 30 days all RFQ processes and bids were going over a simple system that kept track of all interactions and allowed staff to easily compare the bids. It was possible for quick and easy responses to clarify the bids, and to allow the bidders to work better to win the business.
The negotiation and agreement areas assured both sides that they were agreeing to the same terms and conditions.
The company realized an 8.5% savings in purchasing costs within 60 days.
The CoreSource Group was also engaged to reach out and find new suppliers in three critical areas. Several suppliers from elsewhere in the US, and four foreign suppliers were identified. CoreSource did due diligence on them, helped the company make initial contact with them, and worked to get them into the CoreSource platform. Now with a click of a button the company could add these suppliers to RFQ requests. This has led to a better supply chain, more diverse supplier options, and an improvement in the quality of some materials.
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SMALL COMPANY BECOMES GLOBALLY COMPETITIVE
A small company in the Midwest made pasta and jams and sold them locally. Overtime, the company was slowly tiring out, losing sales, and basically going downhill. Pessimism set in because the perspective was, “how could a small family business sell these kinds of products and compete with national chains and international alternatives?”
A CorePath assessment first reviewed the company’s strengths and weaknesses. Surprisingly for the owners, many strengths were found. A new marketing strategy was developed around the Amish background of the family, and a natural foods approach. Some of their products were very good so the focus was on these products. Simple, but effective marketing research was done identifying market opportunities… regionally, nationally, and internationally.
Costs were reviewed and it was determined that sourcing supplies from more diversified suppliers, nationally and internationally, would reduce costs. CoreNet identified these suppliers so that the owners could contact them.
Their use of the Internet was reviewed by the CoreNet Group and it was determined that the right kind of website was needed. With the website and the use of simply communications tools, they could work with suppliers and buyers much more effectively. Most importantly they could do business further than a convenient car ride from their location.
With the right information, and a good plan in place, action was taken. Using CoreSource, new suppliers were added and an easy, online, system to use suppliers and reduce their costs was used. Now, they did not need to deal with maintenance or complicated computer issues.
The website became the basis for effective marketing of the brand and for engaging suppliers and buyers. Sales expanded through a distribution strategy as well through meeting the right kind of people to distribute their products nationally. The website started taking international inquiries and the online store took orders from anywhere.
Now the owner can come in and look at his computer to see how people from around the world are hitting his site and buying his product.
The company is growing and doing well. The owners are reinvigorated, optimistic, and planning for future growth.
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