GLTAAC Case Study: Yoder Lumber’s success in the TAAF Program
Another GLTAAC client just completed the TAAF program. Yoder Lumber Company is a major sawmill and lumber reseller located in northeast Ohio. They used their $75,000 of program co-funding over three years (firms in the program have up to 5 years to use the funding). Here is a brief summary of their experiences and success with the program.
About Yoder and its TAAF Plan
Founded in 1944, Yoder Lumber grew steadily, leading it to begin construction of a new and significantly modernized mill in the fall of 2008, just before the Great Recession hit. In early 2012, the company found itself struggling to serve a stagnant market, positioned in an equally struggling industry.
Yoder Lumber entered the TAAF program in late 2011 and GLTAAC delivered their adjustment plan in early 2012. From that time until July 2015, Yoder spent their TAAF program funding in the areas of ERP Implementation, Marketing Planning, Lean Six Sigma (LSS) training, and Customer Relationship Management (CRM) implementation.
The company could not be happier with its results. Sales in 2014 were up 51% over 2011 (and employment was up 23%). Growth has continued thru 2015. This success was due to more than just the TAAF program, of course, but GLTAAC’s involvement was a key factor – both the funding and the assessment and planning process.
In the words of Robert (Bob) Mapes, Yoder Lumber President, “Your organization should be quite proud of the product you deliver. We saw your assessment and we literally laid it down beside the special study our accounting firm had done for us and you hit every point they hit. The main difference was that they gave us a skeleton, but you gave us a whole complete body and what to do with it and how to do it. And then you also provided the one thing no one else could provide and that was the funding.”
First Step – Improve Efficiency
Initially, Yoder identified that it needed to improve efficiencies and internal processes before working to increase sales. TAAF funding was used to implement an upgrade to its ERP system, followed by LSS training. Bob explains, “The LSS project was a key item. It really is a tremendous morale builder. If done right, it is phenomenal. It taught both our labor force and our management team that, if we did things and collaborated together we could do things better, simpler and with a whole lot less stress. We have a shop supervisor with a cup of coffee in his hand watching what is happening. Before, he was jumping in and substituting as an employee. He is now able to truly supervise – because we no longer have a fire drill out here every day.”
He further elaborates, “We now have more capacity than before and it is due to our improved efficiencies. Through Lean Six Sigma, and some other things, we were able to reduce our hours from 50 to 45 ½ hours/week.” This was done with a morale boost, as employees recognized it as a work/life benefit to have more time with their families.
One of the internal initiatives GLTAAC recommended (no TAAF funding used) was to improve collections efforts. Yoder devoted a concerted effort to improve collections, a difficult and complex process. This is what financed the increase in business. Sales are up, and receivables are actually lower than they were before. Bob offers, “For the first 9 months, we met every week on receivables and we did something every week. We worked on them, we called people, we turned them over to collections, and we converted receivables to notes – all those business things. Now, we meet every two weeks in our ‘A/R Thrashing’ meeting and go thru every salesman, every customer.”
All of these efforts paid off when Yoder got a natural boost from the economy as housing starts began to pick up and there was a substantial decline in competitors due to many going out of business. Bob summarizes, “Our sales increased because we had additional capacity. That was a key element, we added capacity through efficiencies.”
Next Step – Focus on Marketing
While Yoder was busy improving efficiencies, it also began the marketing initiatives recommended by GLTAAC – development of a marketing plan and implementation of a CRM system. Yoder had never before had a marketing plan and needed help knowing where to begin. GLTAAC furnished some consultant names and helped write the RFP. The firm that Yoder selected in late 2013 performed market research, developed a comprehensive marketing plan and is helping Yoder implement that plan.
This summer, the company rolled out its new logos and branding, along with its new website. The website won accolades from Woodworking Network, a lumber industry online journal. Yoder’s new CRM system was also chosen by the same process with GLTAAC support.
With the final marketing pieces coming into position so recently, it is too early to know how much of an additional boost they will be to sales, but Bob is “looking forward to what more good marketing will do for us.”