A Michigan Manufacturer of Sensors

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Company

  • Small company; less than $10 million in sales; second-generation leadership; significant employee ownership via ESOP.
  • Niche manufacturer; produces thermal sensors and detectors for the electronics industry.

Situation

  • Potential applications and markets for sensors growing.
  • Intense overseas competition, industry consolidation, and the introduction of a new-technology sensor left company trailing competitors.
  • Market was becoming increasingly price-sensitive, which hurt firm sales.
  • The company was forced to reduce its workforce by more than 20% the year before it entered the program.
  • Firm still financially sound, but old business model clearly unsustainable.

Approach

  • Make long-term changes to strategic direction with data and outside expertise to help with decision support.
  • Become more efficient and cost-competitive, while at the same time expanding product offerings.
  • GLTAAC helped the company develop a recovery plan that addressed all of these issues. It included projects in marketing, strategic planning, process improvement, new product development and support systems.

Actions

  • Lean manufacturing project done first to cut costs and help improve competitiveness. This reduced inventories, material handling, and COGS.
  • Strategic planning, market research, and sales projects improved day-to-day management and facilitated the evolution of a new business model.
  • The firm upgraded its website with the help of the program, while developing several new products using its own resources.

Results

  • The company has moved up-market. Though still making sensors, it is now also focused on developing new end-products that incorporate its traditional products.
  • Firm stabilized – profitable, with sales and workforce growing again.
  • Last domestic manufacturer in its industry niche.
  • Company faces many challenges ahead, but also has many opportunities – it is well positioned for success.