University of Michigan Business School - Entertainment, Media & Sports
Club
Getting
Started
The
Process
About
A
Michigan Manufacturer of Sensors
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.
But intense overseas competition, industry
consolidation, and the introduction of a new-technology sensor left
company trailing competitors.
Market was becoming ever-increasingly price-sensitive,
which hurt firm sales.
The company was forced to reduce its workforce
by more than 20% in 2000.
Firm
still financially sound, but old business model clearly unsustainable.
Approach
Because promptly sought assistance, the
firm had time to make major changes.
But needed data and decision-support to
set long-term strategic direction.
Also needed to become more efficient and
cost-competitive, while at the same time expanding product offerings.
GLTAAC
helped the company develop a recovery plan that addresses all of
these issues. It includes projects in marketing, strategic planning,
process improvement, new product development and support systems.
Actions
The plan was approved by the Commerce Department
in November 2001.
Lean manufacturing project done first to
cut costs and help improve competitiveness - reduced inventories,
material handling, and COGS.
Strategic planning, market research, and
sales projects have improved day-to-day management and facilitated
the evolution of a new business model.
The
firm has also upgraded its website with the help of the program,
while developing several new products using just 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 old products.
Firm stabilized - profitable, with sales
and workforce growing again.
Should complete program this year; last
domestic manufacturer in industry.
Company
faces many challenges ahead, but also has many opportunities - it
is well positioned for success in the coming years.
