Reinventing yourself for your customers

Imperial Custom Molding, a 25-year-old custom molder in Rogers, MN, was doing everything right. The 80-press facility produced good-quality parts on time and at a competitive price. So why wasn't the company growing? And how could it differentiate itself from the 200-plus other molders in the Twin Cities area?

According to Steve Jenkins, vp of new business development, the company had developed "an arrogance about ourselves and we had positioned ourselves with our Tier One customers in a way that was not desirable from a marketing and sales standpoint."

The company's dedication to operational excellence was good from an accounting standpoint, but it was evident when sales showed a significant drop that in spite of excellence in one area, some barriers had been erected in others.

When management decided a change was in order, it found that the biggest stumbling block to this change was the five-member team ICM had in place, "myself included," adds Jenkins.

At that point, ICM's president decided to retire and the company brought in Bill Hassell, whose management experience came from his years of service at Hewlett-Packard. Taking a lesson from that company's playbook, one of the first things Hassell did was disband the team of senior management and bring in midmanagers. This structure created one level of management. Production workers were also included in this new system so that they could participate at a higher level in the new team-oriented culture; this formed the basis for ICM's Customer Intimacy program.

This program reversed ICM's focus from an internal, operations-centered one to an external, customer-oriented one. ICM calls this its Marketing Value transition because as the company positions itself as a partner to its customers, it provides greater value to them, which in turn enables greater growth and profitability.

With the help of Denita Palmer, the company's newly appointed Marketing Lead, ICM implemented an Ambassador program. The company sent some of its production personnel to the plants of its Tier One customers, and those customers sent personnel to ICM's facility. Jenkins says this exchange greatly increased the level of understanding and trust between ICM and its primary customers.

"One of the advantages we have is that we have people on both sides of the fence," notes President Bill Hassell. "We're a full-service provider, not just a custom molder. Clearly the difference is to offer in a small-company environment big-company support and vision, and to do that with the speed and agility of a small company."

Additionally, ICM has taken over the purchasing activities of its Tier One customers. "We acquired their software so that we're able to look at their requirements and do their ordering," explains Jenkins. "We've also placed an engineer at their plants to help them design for manufacturability and to help them get to market faster with their products."

Image Makeover
"Denita Palmer was instrumental in changing our image approach from that of a molder to a product fulfillment company—our term for a contract manufacturer," says Jenkins.

Palmer notes that "by focusing on our customers' goals and objectives, we position ourselves as their partner. We manage their manufacturing requirements, and through the process, we grow with them."

ICM operates 50 injection molding presses, 29 thermoset presses, and four blowmolding machines. Jenkins says the company is seeing equal growth with each process.

"Because we focus on product fulfillment, we're able to add more value through secondary operations and unique niches," says Jenkins. "This also has helped ICM stabilize profit margins, which are typically being eroded in custom molding. We're seeing higher overall margins while passing along cost savings to our customers," he adds. "That's also very instrumental to our growth, particularly in thermoset sales, where we've focused on some new technology and new niches in the fuel cell industry."

Everyone thinks thermoset molding is a dying industry, but Jenkins says that's not true. "There's not a lot of competition and most aren't investing in technology or people, but it represents an excellent marketing value opportunity for us." Jenkins adds that of the $2.6 million the company invested last year, $1.8 million of that was on the thermoset side. "Our customers are realizing the value of a high-performance thermoset molder," Jenkins says.

Results
Sales at the time ICM decided it needed to do something different had fallen from $20 million to $16 million in just more than two years. Four customers represented 80 percent of ICM's business, which isn't a good position for a custom molder to be in, notes Jenkins. When Hassell came aboard, the reinvention started.

"We looked at our customer base, targeted new customers, and implemented our Customer Intimacy program," says Jenkins. "Through all the changes, we went from $16 million to $22.3 million in sales last year. We closed [the fiscal year] in June at $29 million and we're projecting $40 million in sales next year."

The Future
Reinventing itself as a product fulfillment company has paid off in other opportunities as well. Jenkins notes that three key customers have identified ICM as a "manufacturing management" company.

"We're focused on that now and are in the process of final negotiations with one customer for which we'll provide the management team. We'll also manage the materials and manufacturing in molding, secondary operations, and machine automation for which we'll receive a manufacturing management fee," says Jenkins of the new venture. "Our customer will purchase the building and equipment and hire the production employees. After five years it will take over the operations."

Hassell says he believes that manufacturing management services will be key for Imperial. He points to other large molders forming strategic alliances and partnerships to leverage technology.

"We have a core competency in things that are critical to the success of our customers' products," says Hassell. "They need the ICMs of the world to partner with them so they can focus on their core competency, which is the design, development, marketing, and sales of new products."