By Rick Spence
Growth Curve: Algood Casters president Craig Guttmann is proving that old-fashioned metal-bashing can still be a growth industry in Canada
You probably don’t give much thought to casters: the swivelling wheels that make your office chair roll and heavy equipment easy to move. At best you’d probably consider this a commodity item, a product left behind innovation, the sort of thing we don’t make in Canada anymore. But you’d be wrong.
Tucked away in a gritty industrial street in northwest Toronto, Algood Casters is a surprisingly nimble manufacturer of an ever-growning line of casters for home, retail, and industrial use.
Maybe you won’t be surprised it has a product catalogue 188 pages thick. Maybe you’ll yawn at the fact its 80,000-sq-ft factory does its own product design, metal stamping and injection moulding. Maybe exporting to 18 countries and supplying the global data centres of some of the world’s largest tech firms doesn’t impress you. But President Craig Guttmann is proving old-fashioned metalbashing can still be a growth industry in Canada – if managment can meet customers’ increasing demands for innovation and quality while keeping costs in check.
Guttmann decided to tell his story after hearing the lamentations over Heinz’ closure of a tomato-processing plant in Leamington, Ontario (Another company agreed to take over the plant, but more than 500 jobs will be lost.) “The only time a business makes the news is when you put people out of work,” he fumes. “Nobody cares I’ve been around 45 years and have 70 empolyees. They just hear about you when you close.”
Here’s why you should care: It makes casters cool Algood, Canada’s largest caster producer, was the first company to put hubcaps on casters. They serve very little purpose. But mobile platforms, toolcarts, and trash bins have never looked more wicked. It’s the type of design innovation that made firms such as Braun and Apple famous.
It produces heavy industrial casters with disc brakes Also hand brakes and disc brakes, and even casters with scales that let operators weigh their cargoes to avoid overload. “We patented that one,” says Guttmann. “I could patent something new here almost every day.”
It proves innovators can still compete on price Recently, a $3-billion global client that supplies server racks to top technology companies, including Facebook, gave Algood an award for cost management — a year after naming the company its most innovative supplier. “This is a European company that recognizes a small Canadian manufacturer out of hundreds of suppliers around the world,” Guttmann says.
Algood was founded in 1968 by Craig’s father Max — a Hungarian tool and die maker who came to Canada in 1951 and worked for Massey Ferguson — and Keith Alexander. The company name is a combination of their surnames. Founded as a general tool-maker, Max steered the company into the furniture business.
When Craig joined as the firm’s first salesman in 1987, he recognized it was too dependent on a sunset industry. He pushed the company into more than 30 new markets, including mobile toolboxes, servers and store fixtures.
Appointed president in 1993, Guttman says he never saw a down year until 2008. In response to the financial crisis, he called on his team to rethink everything. “We had been so busy making money we never stopped to look at what we were doing and what we could do better,” he says. “We had to learn to innovate again: not just to make product cheaper, but make it better, and get it to the customer quicker.”
After weighing the pros and cons of opening a factory in China, he says, “I decided to put my efforts into this plant, to re-imagine what we do here. It took a lot of blood and sweat.” (Today the company’s exports to China exceed $1-million.)
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 had long production runs, but not anymore. You need flexibility,” Guttmann says. “We can now take bigger orders from customers, and smaller orders. That’s how you compete globally now.”
The evolution is still not finished; Algood is implementing a new CRM system, and next month it moves into a new plant in Brampton, Ont. With improved “from scratch” production flow, Guttmann is looking to reduce turnaround time for standard products from five days to three. And he wants to reduce turnaround for custom products, currently three to four weeks, by at least a week.
He says one of his best innovations was to schedule regular weekly customer-service meetings (Monday morning) and engineering meetings (Wednesday afternoon). Sounds easy, but for years those meetings were held only sporadically. Getting all departments together makes for an expensive meeting, he says, but helps create a shared, client-first culture. “The goal is 100% quality.”
When you can boast a customer-complaint rate that’s a fraction of 1%, he says, you’re no longer a commodity producer. Clients forget about your price and recognize the lifetime value you create.
Algood is back into double-digit annual growth. Guttman says his success demonstrates that innovation and quality aren’t expensive: they’re cheap. “It takes years to get a customer, and just a second to lose one,” he says. “There is nothing more expensive than an unsatisfied customer.”