Category: President’s Blog

Lately, I’ve been thinking a lot about Aretha Franklin’s classic hit Respect. That’s not just because I’m an R&B fan, but because I’ve been on the road talking to customers and if there’s one thing they’re not getting from so many other caster manufacturers, it’s respect.

Our customers, like most buyers of casters and wheels, often find themselves in the middle. Distributors are sandwiched between meeting the needs of their customers and negotiating with manufacturers. Corporate buyers are trying to meet the competing demands of finding the right caster product to satisfy the engineering team, while negotiating delivery dates to keep production on target and getting pricing that will make the finance department happy. And all of that’s not easy.

Against that backdrop I can’t believe some of the horror stories I’ve heard in the past few months. Customers are promised delivery on a particular date and make commitments to their own customers or internal departments based on that promise. And then, lo and behold, the product arrives weeks late, in many cases with no advance notice. Some times hidden delays are revealed with amazing excuses. “Well, you know those casters need lathing and our CNC equipment broke down, so we can’t possibly deliver on time.”

From what I heard, it’s common for shipments to arrive with product that doesn’t meet the spec provided or that is obviously sub-standard. And, if you’re in the middle, now what do you do? It seems that the corporate caster consortiums don’t want to respond to complaints. So you have to scramble to find other solutions –fast.

Customers – whether distributors or corporate buyers – don’t need that kind of aggravation and they shouldn’t have to put up with it. Doing business with suppliers shouldn’t be a guessing game. And what’s really incredible is that in many instances customers have been using these suppliers for decades, having given them tens of thousands of dollars in business.

So much of this is a result of offshore manufacturing. The necessary lead times are enormous and quality often suffers. I’ve seen first-hand the production standards of most offshore suppliers and its not pretty. On top of that, local suppliers often need to finish goods that arrive from offshore producers. That just magnifies the delays.

What bothers me most about all this is that it’s exactly the opposite of the way my father – and my mentor – taught me to do business and the way we conduct ourselves at Algood. We don’t want to be adversaries with our customers, lying and making excuses. We want to help them serve their many masters by ensuring they meet their deadlines. We’re not looking to make a quick buck. Rather, we want to establish relationships.

But we’re also not looking for an easy ride. We want to be challenged. Our fully integrated manufacturing facility provides us with great capabilities but sometimes we have to be tested to know what we really can do. We have just received two orders to produce over 20,000 casters in less than two weeks. It’s far from beyond our ability but we can only prove that to our customers – and ourselves – when being asked to stretch. What’s for sure is that you have to be a genuine North American manufacturer to get that done.

Ultimately, we want to earn the trust – and business – of our customers. We want to be there front and centre, helping our customers to be more successful and seeing their businesses grow.

Aretha said, “R-E-S-P-E-C-T, find out what it means to me.” We know what it means to respect our customers and we’re proving it every day.

As a huge NBA fan, this is an exciting time of year for me. The NBA Finals are an opportunity to see the best of the best and even if the last two teams standing was a foregone conclusion, we are still being treated to some amazing basketball. The lessons to be learned from basketball extend well beyond the court and are a guide to how we make decisions at Algood. Here are three examples.

1. Strategy in basketball has taken a major shift in the past few years. Having analyzed data, teams determined that the three point shot was a highly effective and under-utilized offensive strategy. Three point shots create the potential for 50% more points on every play. To exploit that potential, many teams began looking for players who could make a higher percentage of three point shots and re-training existing players to do the same. Along the way, some teams (like my home team Toronto Raptors) have not adapted and are unable to reach that elite level.

The dangers of not innovating are just as prevalent in the caster industry. After the economic downturn in 2008, we recognized that one of the keys to thriving in manufacturing was that we had to make new product development a priority. R&D became a strong focus. Now, we are introducing multiple new products as well as product enhancements every year. That, along with some amazing new products that will be unveiled shortly, is ensuring that we have a leg up on our competition but more importantly, we are better able to anticipate and respond to the needs of our customers.

2. Inasmuch as three pointers are creating more potent offenses, the Warriors are beating the Cavaliers just as much because of their defense. The lesson is clear. To win, teams need to be outstanding on both sides of the court.

The way I see it, Algood’s offense is our front line – our outstanding sales representatives and customer service team. These are knowledgeable and experienced men and women who are bringing our extensive product line to our customers and helping them find the ideal caster and wheel solutions. And they do a great job. But at the same time we need an outstanding defense to guarantee the effectiveness of our sales and support efforts. Our design, engineering and quality control teams ensure that we have the right product for the right challenge, that it will work flawlessly and that it is delivered as ordered and on time. That combination of offense and defense is generating more and more wins for us at Algood.

3. For teams to adapt to the changing game while being equally effective on offense and defense, they need the right players. While last year’s Warriors team was stellar, the addition of Kevin Durrant has made them virtually unbeatable, within one game of going without a loss in the playoffs. And while Lebron is always the focus of the Cavs, there is no question that without his teammates like Irving and Love, they wouldn’t be as good as they are. Both the Cavs and the Warriors have devoted a huge amount of thought and resources in assembling the ideal roster.

One of the enduring lessons I learned from my father is that our staff is our greatest asset – more valuable than any piece of equipment or machinery. We make sure that we have the right people in the right roles. That means holding out for the perfect fit when hiring, being prepared to move people into positions that are better suited to their talents, and investing in training to add or enhance skills. Our employees are truly a team. They depend on each other and value each other. Each of them contributes importantly to our success and is deserving of our respect and appreciation. There is no doubt in my mind that the Algood team is the greatest reason for our success.

So while I’m glued to the TV, watching to see whether the Warriors can complete the sweep, I’ll be thinking about how Algood can continue to be an elite team of castersmiths, providing unbeatable service to our customers and becoming the champions in North American caster manufacturing.

We recently added a 1,000-ton Cincinnati injection moulding machine to the equipment in our manufacturing plant. While this fits nicely into our new “Think Big” mantra and will have a significantly positive impact on our capacity, it came with a six-figure price tag. That’s certainly an amount that makes you think before you buy. The interesting question is do you make a decision like that based on data or on intuition?

The numbers certainly played a huge part in this major capital investment. Our capacity utilization rate was running high. In other words, were coming close to maxing out on our production capability. A good rate is 75-80% and even though we are running on a 24/5 production schedule, our rate was higher than what’s optimal. In a way that’s good thing because it means we are manufacturing lots of casters and wheels but we didn’t want to jeopardize our proven ability to deliver high-quality product on time.

This new injection moulding equipment will allow us to produce wheels and caster components 20% faster and will increase our productivity by 15-20%. In addition, we will be able to manufacture bigger wheels faster – like our RollX™ wheels with 3” tread widths.

Another advantage to the new machinery is that it now gives us more options in terms of the production equipment we use for any particular project. That, in turn, allows us to find the plant-wide equipment usage plan that will guarantee deadlines and product standards.

So those are the measurable components in the decision-making and honestly that got me about 75% of the way to yes. The other 25% was intuition. I’ve often said that business is, in many ways, legalized gambling based on hunches or best guesses.

In this case, part of that was listening to what our customers had to say about their experience with us – and our competitors. I spend many weeks every year on the road meeting face to face with customers and I continue to hear their frustration at dealing with offshore suppliers. My sense was that enhancing our North American manufacturing capability would better satisfy customers.

Through my meetings with our salespeople and my first-hand interactions, we were getting very positive feedback to our casters and wheels. The fact that customers were increasingly happy with Algood product led me to believe that we would make use of the increased production capacity this new equipment would bring.

In addition, I am optimistic about the economy and the continued demand for product manufactured on this side of the ocean. The political climate and relate considerations also factor into the decision.

So, how will we measure the ROI on this new equipment? How will we know if the investment is leading to success? Our capacity utilization and productivity rates will be good indicators. Increases in the number of moulds that we have on hand as well as the amount of injection moulding material we use will also be good determinants of success. Overall sales growth is always a healthy sign. Aside from all the usual metrics, for me the greatest measure of success will be if we need to buy yet another machine to continue to meet demand.

As a business owner, investments in equipment that come with price tags in the hundreds of thousands of dollars are enough to keep me awake at night. Inasmuch as we all like to believe that we would make these kinds of difficult decisions with perfect logic, the reality is that the best decisions are made on the basis of both numbers and gut.

For the first time in almost 20 years, Algood is returning to the Promat trade show in Chicago this year. It’s a huge show with over 700 exhibitors in the material handling, supply chain and logistics business. There are two reasons we’re coming back. One is that we have more confidence than ever in both what our company has to offer and in the future of the industry. The second reason is that trends have shifted and these large expositions have returned to being more about the trade and less about the show.

Exhibiting at a show like Promat represents a very significant investment. There are lots of materials and presentations to be prepared. But more than that, the man-hours required both in advance and at the show come with a hefty price tag. That’s money that could be spent on product development. So you can bet that we want to be very sure that this will be a good use of our time and money.

Why? Because we have a story to tell. We want current and prospective customers to see the breadth of our product line and have the opportunity to interact with our people. Our “Think Algood. Think Big” slogan is as much about our large, high capacity, heavy duty casters as it is about our ability to help customers see the big picture and seize opportunity. Websites and catalogues display product but  when people hold and feel an Algood caster or wheel, they really see the quality and workmanship that are built into it. We are confident that as Castersmiths – true masters of the caster industry –– we will demonstrate our knowledge, capability, ingenuity and dedication to our customers.

Let’s face it. There’s also a bottom line to an investment in a trade show. We take a no-nonsense approach to ROI for a show like this. While its great to promote awareness and enthusiasm, they don’t pay bills. We believe that we can generate significant business by converting introductions into meetings and meetings into sales.

We are also confident about the industry. More and more often, we are hearing about the frustrations of dealing with offshore producers both in terms of product reliability and meeting delivery times. North American producers are upping their game, becoming more sophisticated and adding resources. As one of a small number of true manufacturers on the continent, we are optimistic about the growth potential and are witnessing many customers turning away from offshore suppliers.

We stayed away from Promat and other large shows for years because, in my opinion, many of them had become more about the show and less about the trade. There were glitzy booths; lots of small talk, handshaking and backslapping; and of course, the required amount of drinking. But there was very little to be found in terms of innovation, product development and a commitment to better serve the industry. The result was visitors did a lot of tire kicking but found little to attract their attention.

Times have changed. Companies sending employees to visit a show are demanding more accountability. They want them to go with goals and come back with the product ideas and solutions that will ensure those goals are realized. In part, that explains why exhibitors have raised the bar on what they are offering. They are also looking for measurable results. So, you’ll see more innovation, more commitment to meeting customer needs, more steak and less sizzle. In a word, it’s the value that being sought by both exhibitors and visitors that is driving changes in trade shows.

Algood’s tremendous growth in capability and confidence combined with the changing nature of these huge expositions have created the opportunity for more trade and less show. And that’s why we’re back!

Our weekly engineering meeting may be the most expensive meeting that we hold but it’s also the most valuable – to us – and to our customers.

This regular meeting was our response to the economic downturn in 2008. At the time we had to make a choice. We could lay-off, cut back and retreat. Or, we could figure out how to be more efficient, how to be a better supplier, a better caster manufacturer and ultimately a better company. We chose the latter and have never looked back. As one of the first measures in this new approach, we took what had been an occasional ad hoc meeting and made it part of the weekly schedule.  Gathering our best minds – from sales, production, design, manufacturing, engineering and management – we started plotting the future of Algood.

Now, six years later, this weekly multi-disciplinary meeting is reaping important benefits for Algood and for our customers. Here’s how:

Comprehensive Customer Care
We begin every meeting with an update on customer concerns and product requests. We take customer feedback very seriously. Issues range from component malfunctions to the boxes we use for shipping. The resolution can involve anything from an improved production process to additional quality control measures to the design of new machinery. Because every department is represented, there’s no such thing as a superficial Band Aid fix. We develop lasting solutions that meet both the current and future needs of our customers.

Integrated Problem Solving
The inter-departmental representation at these meetings mimics Algood’s vertically integrated manufacturing environment that includes in house tool & die, injection molding, metal stamping and engineering departments. It means that there is no finger pointing and there is open communication between all departments. Nothing is swept under the carpet. Items requiring attention are given target resolution dates and stay on the agenda until they have been dealt with successfully. Participants at the meeting take collective responsibility for the success or failure of initiatives.

Innovation
There is no such thing as a bad idea at these meetings. The out-of-the box thinking has resulted in most of the product innovations for which Algood is known. In the last two years, Algood has introduced almost two dozen new products to the marketplace and we are developing our own proprietary production equipment. While other caster companies have turned to offshore solutions, we are investing in North American manufacturing. With shorter lead times and outstanding product quality, Algood is being recognized globally for its innovation and commitment to customer care.

The commitment to re-imagining the future of Algood with the goal of ultimate customer satisfaction is what earned us recognition as a “custom-product powerhouse” in a recent Financial Post article. What’s even more impressive is we achieved this on the strength of the traditional values that come from being a family-owned business. As multi-nationals and investment-firm-backed competitors turn to offshore supply chains, I am proud of our ongoing commitment to being a leader in North American caster manufacturing. Our weekly engineering meetings were the key to turning the corner last decade and our powering Algood into the future. The price tag associate with the meeting may be high but it’s an investment that will pay dividends for many years to come.

There’s no question that if you’re an Algood customer you benefit from the diligence we use in selecting suppliers. Our commitment to quality and service can only be maintained with a superior vendor network.

So, how do we pick those great sellers? For starters, we look at all of the obvious criteria. We check to make sure that the people in charge of the operation are well qualified. What’s their reputation in the marketplace? We conduct a site visit and make sure that the work environment is safe and clean. We look carefully at the testing facility and apparatus being used. Our engineering department reviews testing reports and ISO qualifications. We ensure that early production runs match the samples we were given.

The next level involves discovering how they have innovated. Can they be responsive to the very particular customer requirements that we routinely meet? We need suppliers that can be as creative and solution focused as we are.  And can they keep their costs in line so that we can meet our pricing commitments?

But here’s the thing. There are companies that meet all those standards that I still wouldn’t want to do business with. I’ve met lots of people who were well qualified on paper but really didn’t know what they were talking about. Ultimately, I want suppliers that are going to take care of me the same way we take care of our customers. I want to know that my business means something to them. Because that way I’ll get top of the line service, an outstanding product and tack-sharp pricing  – and I will pass every one of those benefits on to my customers.

Finding those special suppliers comes from the gut – and sometimes takes guts. More than once, I have given business to a vendor who lacked experience but had the drive, the passion, the raw ability and the high regard for quality that would make him successful. We will take the time to “train” a supplier that has the right kind of potential. I have to be personally impressed to take that kind of chance but when I have been, it has almost always worked out well.

A big part of that approach comes from a lesson that I learned from my father. Everyone needs a break in business. At Algood, we owe some key successes to the right break. So, sometimes you end up with a great vendor by giving someone else a break. Business is built on breaks and with them come the trust and loyalty that are invaluable in setting up a high quality supply chain.

There’s nothing worse than being stuck with a supplier out of necessity. And there’s nothing better than having suppliers who are highly motivated and quality driven. It’s all about trust – implicitly trusting that a supplier will help us meet our customers’ needs. And trusting our gut in finding those suppliers.

Over the years we have found ourselves at Algood doing more business in the global marketplace. If you think that our success on other continents is based on some great international strategy, you’re wrong.

Here’s the secret. We treat our global customers with the same care and attention that we provide to everyone that buys our products. In fact, the lessons that we have learned in continuing to meet the needs of local and North American customers is what drives our offshore business. While we’re proud of the trust that has been placed in us by some pretty big European companies, it doesn’t go to our head. We know that we’re only as good as our last sale and while competing globally sounds exotic, it requires the same discipline and principles that we have been using for over 45 years. Here are some of them.

Engineering is everything. The products we sell must be manufactured to stand up to failure rates measured in incidents per million, not thousand. Product failure can happen anywhere in the world and those distances represent significant risk. The solution lies in the integrity of the engineering process and extensive testing – before, during and after production. And that testing has got to match the conditions in which the product is going to be used.

Never trade quality for price. In the global market, as in every market, the pressure to bring prices down is enormous. Procurement specialists and buyers are always looking for a better deal and its tempting to “look the other way” and reduce quality to bring pricing down. But I’ve learned that it’s not worth the risk. I’d rather lose a sale than be forced to provide product that is sub-standard.

Never get comfortable. When your reputation is both domestic and world wide, you have to be incredibly responsive. You have to react quickly and accurately with samples and prototypes. Delivery times can’t be educated guesses but have to be a matter of precision. You have to be accessible 24/7 because you’re dealing in many different time zones and the way you respond to customers is often your biggest competitive edge. That sometimes means arranging a trip on a moment’s notice and traveling to see a customer half way around the world.

Keep your eye on the supply chain. Your suppliers can help you be a great supplier to your customers – but not without diligence. Do your suppliers meet your quality assurance standards? Do they provide a safe working environment? If not, you may find that a fire or some other catastrophe has suddenly cut off your supply chain. On top of that, material specifications differ from country to country. For example, steel standards vary as do plating specifications. To eliminate foul ups, you have to make sure that your communication is in common terms.

It seems to me that what many business people don’t understand is that you can’t have one set of rules for European (or any other) customers and another set for those in North America. Being successfully globally is a matter of being customer driven and quality conscience with every account – no matter where they are. In the end, the big secret is that global success is based on the same principles and way of doing business that we use with every customer.

I’ve been travelling a lot lately. There was a trip to the Orient followed by two trips to Western Canada to spend time with customers, including many of our distributors. The air travel portion of these trips made me think a lot about customer service – or more accurately – how to get – and give – good customer service.

I’m a member of Air Canada’s Altitude million-mile program and as a result I get some special attention and great perks like express check in and no checked baggage fees. In this case it’s not membership, but rather loyalty that has its benefits. The truth is that there’s a snowball kind of effect to loyalty and benefits. Increased loyalty brings more benefits, which in turn makes me even more loyal. That’s one of the reasons I went from being an Elite to Super Elite. So, I’ve figured out that one of the ways to get great customer service is to be a very loyal customer.

Over many years of flying, I’ve also come to realize that the airlines that offer the best service are the ones that are hungriest for passengers. While Delta is probably the most successful major airline today, ten years ago they were hurting. During that rise to the top its seemed like they knew they had to work harder and when I flew Delta, I got better service. But once an airline reaches a certain measure of success, there’s a kind of complacency that settles in and you just can’t get the same kind of attention. While I understand why these things happen, it has always struck me as a less than perfect way of doing business. Outstanding customer service should be a core value of any business, whether they are number one or one hundred in their industry.

All of which brings me to our number one focus at Algood – Customer Service. While it is our pleasure to pay special attention to our best customers, we are always looking for ways to be better able to help all our customers succeed. We have been giving a great deal of thought to service lately and here’s what our customers can count on.

Outstanding Product Quality – Using the ISO methodology we have re-examined and in some cases enhanced many of our manufacturing processes. We track our performance diligently and we are proud to report that 99% of orders shipped meet the specifications provided and are delivered on time. That’s as close to perfect service as you can get.

New Product Releases – We have a number of new products or product updates that will be released over the next couple of months. Most of these have been developed in response to customer needs or requests. Look out for our new ProTech Sizes, Flat Free Wheels, Pneumatics with Precision Ball Bearings and Zero Gravity Spring Loaded.

Distributor Networks – As I said earlier, much of my travel has been to spend time with our distributors and see how we can help them be better suppliers and problem solvers. I spend most of my time asking questions and listening carefully. As a result, we’re introducing some new programs that will make it easier for distributors – and their salespeople – find the right products to meet their customer’s needs. If you want to know more about these programs or have an idea about how we can help you, please be in contact.

At Algood, we may not have a million caster program, but we do believe that continuously improving customer service – for our most loyal customers as well as our first timers – is the most direct path to future success.

Well, not at Algood anyway. Don’t get me wrong. The Ice Bucket Challenge is doing great things for a worthy cause. And last week, one of our distributors, Caster Connection, even used our Ice Wheels in their quirky take on the ALS Challenge. We are honoured to have our products being used for such a charitable purpose and proud to answer the challenge by donating $100 to The ALS Association. But at Algood, supporting the community and charitable causes is way more than this one campaign. It’s part of who we are and the way we do business.

A lesson that I learned from late father Max and from my Jewish upbringing is that we all have a responsibility to care for the community and the individuals within it. On this issue my father led by example by providing financial support to and involving himself in dozens of organizations. Corporate social responsibility (CSR) is a relatively new term that describes the impact that companies can have on the community. At Algood we’ve been practicing CSR for over 45 years.

For the past 16 years we have organized and been the lead supporter of a golf tournament that raises money for children with special educational needs. This is a cause that was very dear to my father and although none of his kids required any related services, he worked tirelessly and personally raised hundreds of thousands of dollars. We started the tournament both to pay tribute to my dad and to continue his amazing work. It’s not a high profile cause. Kids needing special education don’t look different than other kids. It’s tough to raise the money but we have done it to give back to the community and to invest in our children. Over the years the tournament has raised over a million dollars. And that’s not all that we do. We support a whole range of causes including hospitals, healthcare organizations and schools.

For us at Algood, success isn’t just measured by the bottom line. It’s what you do with that profit that defines you. We’re not a corporate subdivision. We’re a family company and our values and reputation are very important to us. Winston Churchill said, “We make a living by what we get, but we make a life by what we give.” I couldn’t agree more.

The Financial Post is one of Canada’s premiere business publications and is read throughout North America. So, it was quite an honour to be featured on the front page. The article followed an in depth interview and tour by writer Rick Spence who was extremely impressed with Algood. He compared Algood to some corporate giants when he said, “It’s the type of design innovation that made firms such as Braun and Apple famous.” Spence also noted Algood’s exemplary reaction to the economic downturn, writing, “By bringing sales, engineering, production and customer service together to eliminate roadblocks, install best practices and develop new materials and processes, Algood became a custom-product powerhouse.” We’re very proud to have received the attention and thought that our business associates might enjoy knowing what the gurus of business are saying about Algood.

You can read the Full Article: Growth Curve: Algood Casters president Craig Guttmann is proving that old-fashioned metal-bashing can still be a growth industry in Canada (Published Apr 07, 2014)