Persevering in the face of hard timesPersevering in the face of hard times

When you’re up against the ropes you have two choices: fight back or throw in the towel. For custom injection molder CD Concept and moldmaker Industrial Mold, each of which recently fell on some hard times, the choice was clear—fight. To survive, the companies were forced to discover the discipline and focus needed to pull themselves back into the game. In the end, as the following case studies show, the keys to their success included a commitment to their customers, teamwork, employee empowerment, sound business and financial practices, and strong management.

New Management Builds Success

Just two years ago in July 1997, CD Concept (Elgin, IL) was close to bankruptcy. Then a group of investors took a chance and purchased the company. One of those investors, Thomas P. Thomas, was appointed executive vp, and immediately set out to turn the company around.

Prior to the purchase, according to Thomas, CD Concept had about $1.7 million in sales and about $300,000 in accounts payable. Several major raw materials suppliers had the company on C.O.D. And, if all that wasn’t bad enough, customers were beginning to call to pull work.

To earn a new lease on life for the company, Thomas and his team had to overcome CD Concept’s lack of financial discipline and business strategy. Here, Thomas’ background came into play. Although he had no specific plastics experience, he did bring an extensive business history, including a Masters degree in International Management, an MBA, and several years in management positions for AT&T in India.

Earning Customer Commitment

Like many small molding companies that find themselves on the ropes, CD Concept didn’t lack customers, says Thomas. It simply lacked the ability to serve them effectively. Part of Thomas’ strategy included visiting every customer and explaining the new ownership and their plans for turning the company around. “Customers are very rational,” says Thomas. “They’re very patient and they’re willing to give us a chance as long as we’re sincere about wanting them to succeed. I visited all the customers, told them what my game plan was, and explained that I would be in the factory from seven in the morning until seven or eight at night to make myself available to them,” he adds.

Because Thomas didn’t know anything about injection molding, his next step was to assemble a team of experienced people with the technical know-how to run production. General manager Dale Harrison, for example, has 30 years of molding experience, and played a big role in helping CD Concept become profitable, says Thomas.

The next step was to get the company’s finances in order. Payment plans were worked out with suppliers in an effort to reestablish the company’s credit rating. And based on the management skills of the investors, a new bank was willing to buy CD Concept’s loan and give the company new capital.

Today, with a renewed commitment to teamwork, sound management, and customer service, CD Concept has grown to $3.5 million in annual sales. A new, 20,000-sq-ft building complete with moldmaking and secondary operations houses the company’s 11 presses (100 to 500 tons) and 36 employees. A new 750-ton press was recently purchased.

Thomas says that success in the custom molding business is not difficult as long as a company has the fundamentals of good business principles and a strategy to guide its direction. He emphasizes the importance of planning. “If you have 10 hours to cut a log,” he says, “you need to plan for 8 hours and cut for 2.” The three keys to good business operations, according to Thomas, include having sound financial knowledge, knowing the people that work for you, and knowing your customers.

All of these same principles came into play at Industrial Mold Inc. (Twinsburg, OH) when the company hit a bump in the road in 1995. Although it was busy, the end of the year reflected a substantial loss. That’s when David Kuhary, who founded the company in 1988, decided it was time for a change.

Assessing his core competencies, Kuhary hired a financial consultant to help him implement sound financial practices, cut expenses, and develop a budget. He then reorganized the shop to do the work differently, using specialty machinists in a production assembly line, like a job shop.

Next, a quality procedure process manual was developed. With this in place, each mold is followed through the various phases of machining and assembly to ensure that the job is done correctly the first time—crucial to profitability in moldbuilding.

Growth by Teamwork

Kuhary’s plan worked, and at the end of 1996 the company showed a substantial profit. From that year forward, Industrial Mold has controlled and carefully monitored its growth. Originally founded as a source for CNC programming and machine work, Industrial Mold is now a full-service moldmaker. To add capabilities and expertise to the company’s management team, Kuhary brought in three new partners—John Ferkul, Bud Sidaway, and, most recently, Tom Nahodil.

Nahodil joined in 1998 as a partner and to serve as president of Industrial Mold. A journeyman moldmaker/designer by trade, Nahodil had spent the previous nine years as president of another mold shop, growing that company from 50 to 100 employees. With the help of his partners, he hopes to achieve the same kind of growth for Industrial Mold.

One key to the company’s continued growth will certainly be its employee empowerment program. Industrial Mold gives its 27 employees input and responsibility for their specific areas, making them their own profit centers, says Nahodil. So far, the plan has been working well, he adds.

Nahodil also attributes the company’s consistent annual growth to its sound financial procedures, including the development of a budget and the discipline to stick to it. The company puts budget figures in place based on specific sales goals for the month and year.

“Certainly there are ups and downs,” says Nahodil. “We have to adjust the budget quarterly. We’re constantly reviewing those figures and making decisions based on the changes.”

Staying Competitive Through Quality

Both Kuhary and Nahodil acknowledge that it’s an increasingly competitive market for moldmakers. For long-term survival in such a market, Industrial Mold is relying on state-of-the-art equipment and computer support, along with a highly motivated work force to guarantee its customers value through quality service with quick turnaround times.

Checking and rechecking mold components as they go through the various stages of machining and assembly is a priority. Though it’s a lot of extra work, it pays off in the end, comments Nahodil. “You only get the money to do things once,” he says. “If you’re doing things two or three times you’re not going to get much business in today’s world. Our goal is to have [molds] go out and not come back.”

Perseverance Award

For their efforts, both CD Concept and Industrial Mold were recently awarded Blue Chip Awards in the 1999 Blue Chip Enterprises Initiative. The annual award is sponsored by life-insurance firm MassMutual, the U.S. Chamber of Commerce, and Nation’s Business magazine. It is given to companies that have faced and overcome adversity. This year, 177 awards were handed out nationwide.