Our 50th year and we’re in overdrive
2019 will be 50 years since my father founded Algood and we’re marking this special year in a way that would make him most proud. Yes, of course we have our 50th anniversary logo ready to unveil and we‘ll have a special cover to our catalogue as well as other promotions and events. But what will be most impressive about 2019 is that we’re going into it with all engines firing. We are aggressively moving our business forward with four key areas in mind.
New product development. In the past few years we have introduced more new casters and product updates than we did in the decade before that. That pace will continue. We’ll address both sides of the size spectrum with more low profile offerings and the further expansion of our “Think Big” initiative that we started two years ago. You can also look out for more stainless options as well as some interesting innovations in polyurethanes.
Manufacturing and environmental efficiency. By reducing our carbon footprint we can make our whole operation more efficient, increase productivity and get orders out the door faster. A recent electricity-use audit allowed us to identify areas in our plant that were wasting energy and we are now monitoring our electricity use on an ongoing basis. That allows us to see when equipment isn’t operating at peak efficiency and make modifications to maintain or improve production schedules. In fact, we’re thinking about how we can reduce our overall energy consumption by 10% and would like others in the manufacturing sector to join us. In addition, all our injection moulding material is fully recyclable.
New capital investment. Last year we added to our capability with a new CNC lathe and an additional robotic welding station. Our capital investment strategy will continue into 2019 with some major equipment acquisitions.
Enhanced customer service. Our customers have always been at the centre of everything we do and in turn, when I’m out on the road, the comments I hear most often are about our wonderful customer service team. Keeping our CSRs well informed, knowledgeable and up to date on manufacturing as well as ordering systems takes hard work. In 2019 we will redouble our customer service efforts and take even better care of our customers, ensuring that they get there orders accurately and on time.
50 years is a major milestone for our company and we’re going into 2019 with our foot to the floor. We invite you to come along for the ride.
Forget AI. Give me a person!
I love technology. I am an Apple junkie with my iPad, iMac, iPhone and Apple Watch. I only read magazines using a device. My iPhone wakes me up in the morning and my watch tells me how well I slept. But despite my infatuation with the world of tech, I’m the first person to acknowledge that there are skills and knowledge that cannot be replaced by the microchip. No matter what advances are made in artificial intelligence, there are things that only I or another human being can do.
In my personal life, the limits of technology are also pretty clear. I haven’t found a computer yet that can figure out which way the wind is blowing and then hit a tee shot so that it lands in the centre of the fairway a hundred yards from the pin. Hell, I can barely do that. No technology will replace the thrill of attending a Raptors game or any other live sporting event. Even with my tech swag, I’m still taking out the garbage and walking the dog.
In the business of caster manufacturing we have automated huge parts of our production. As I have written about before, those advances didn’t eliminate jobs in our company. Rather, they changed what we need people to do. For example, while the new CNC lathe we purchased will expedite production, we had to hire someone to program it in the first place.
Personally I get involved in a guess-timating element of production planning and that cannot possibly be replaced by AI. We proactively anticipate customer requirements based on a combination of market trends, buying patterns, and personal interactions. And, we usually get it right so that we are almost always able to meet our customers’ needs.
In addition, there are functions that only a person can fulfill. When someone calls our customer service department, they want to speak to a person – someone who can provide solutions based on a unique set of requirements. In fact one of our distributors advised us not to include too much automation in the new website we will launch next year because, beyond a certain point, it will take a person to find the best caster or wheel to meet his needs.
That’s also the reason we have resisted having an automated attendant answer our phones. Despite the efficiency, we know that our customers enjoy talking to real, live, human beings.
The best quality assurance systems can’t replace what happens when someone looks at and touches a caster to make sure it’s what the customer ordered and has been manufactured to standards. And here’s one for you. Find me a computer that is going to load a truck so that it’s organized to match a delivery route.
It seems to me that the key to technological success is a combination of embracing what computers can do and, at the same time, recognizing their limitations. At the end of the day, there are some things I will never want an AI driven matrix of microchips to do for me. Sometimes, you just need a person.
Two takes on tariffs
It seems like every business conversation I have these days is somehow connected to tariffs. Whether it’s our customers, colleagues or our competitors, the current tariffs, and the looming 25% surcharge at the end of the year, are having a huge impact on the caster business. Many of the people I speak to are frustrated and see the tariffs as a kind of destructive doomsday. While I hear them and sympathize, there are clearly two sides to the tariff situation.
Let’s back up a step. Earlier this year, President Trump imposed a 10% tariff on imported goods from China including steel, casters and caster components. Subsequently he announced plans to increase those tariffs to 25% on January 1- and that’s what’s really got the industry in an uproar.
Importers are scrambling to get product landed by the end of the year. That means they are behind on completing orders. With transit time from the China of at least four weeks, we are about a month away from last day to produce goods that can be sold at the pre-tariff cost. That’s causing chaos. Beyond that, they must re-conceive post 2018 business models that will see a huge portion of their bottom line stripped away.
Suppliers that both import from overseas and manufacture in the U.S. are working furiously to re-align their operations and quickly increase their on-shore production capacity. That’s kind of like turning a cruise liner. It doesn’t happen fast and they are not able to respond to the demand. In addition, I hear that some manufacturers are having trouble finding qualified staff to support the intended production increases.
Distributors may no longer have stable supply chains. Their vendors are raising prices and restricting delivery. That’s not a good combination. Fabricators who use casters as part of a finished product are in an even more tenuous position. They have quoted and provided delivery dates on goods but with the chaos in the caster market, are at risk of being late and above budget. That’s also not a good combination.
While all of this is playing havoc with the industry and there will certainly be companies that become casualties, there is a clear upside to the situation. For years, the reshoring movement struggled to convince companies to bring manufacturing back to North America. But the unbelievably low prices on imported goods were irresistible to a competitive marketplace where small differences in price accounted for huge differences in sales and profit. The tariffs will do what moral and patriotic arguments could not. When the storm subsides, there will be more casters being manufactured in North America, which means more jobs, more investment and more growth. There will be lots of short term pain but it’s very possible – maybe even likely – that it will be overshadowed by the long term gain.
For us at Algood, there is a bit of a boon in all this. Our products are not subject to tariffs and we have a fully integrated manufacturing facility in Toronto. We can deliver product that meets very specific requirements at competitive prices and in very favourable timelines. That is making us an attractive option for distributors and fabricators. We’re getting new business and we’re not complaining.
It’s distressing to me when I talk to our distributors and other customers who feel trapped by the current state of affairs. As a business owner, I empathize with their frustration and deep concern for their businesses. Unquestionably this is a situation that sucks for many companies and many employees. I feel their pain.
And then there’s the other side. That’s the real possibility that all this will lead to a renewed, healthy and vibrant North American manufacturing sector and increased demand for casters and wheels produced on-shore.
I guess there really are two sides to the tariff tale.
Walking the Talk, Literally
I take a walk every morning that is absolutely critical but has nothing to do with exercise. My morning walkthrough of our manufacturing facility is the most important 20-25 minutes of my day. This is the walk that makes sure we’re walking the talk and fulfilling the commitments we make to our customers every day.
Our ability to deliver high quality casters & wheels on time is the lifeline of our business and the morning walk-through is my opportunity to get an unfiltered, first-hand look at how we’re doing. And because I take my walk with our VP of manufacturing, our plant manager and our quality control manager, key production decisions get made on the spot. No one can say, “I’ll get back to you on that” and there’s no room for procrastination.
The walk-through keeps me in touch with the heart of our business. It’s my summary of the day and it keeps me in touch with our production activity. The route I take through the plant is always the same.
The first stop is Injection Moulding where I check to see which moulds are running, spot check some of the wheels that are waiting for assembly and check cycle times.
The next stop is Welding – our two robotic stations and our hand-welding centre. There, I’m looking at changeovers, cycle times and taking a close look to make sure the quality of the hand welding is up to our standards.
After that comes Assembly where it’s just a matter of seeing what’s being finished and doing the occasional quality spot-check.
Testing is last. What’s on the machines? How are they measuring up? Are we using testing procedures that will provide the data to match up with customer requirements?
The walk-through has other benefits. We take a close look at equipment and machinery, making sure it’s operating properly and being maintained well. We make sure that employees are using safe practices with the right protection. Likewise, it’s a chance to make sure that there’s a safe working environment with clear aisles and clean floors. Although it sounds trivial, it’s an opportunity to say Good Morning to our staff and let them see that we take a personal interest in what they are doing and their well-being.
The point of the walk-through isn’t to micro-manage. It’s the way I fulfill my responsibility as an owner and the president of the company. An important part of what differentiates Algood in the marketplace is that we’re not owned by a corporate conglomerate and that our management is hands-on. Walking the talk every day is the way we maintain our commitment to our customers and has been a huge part of our success for almost 50 years.
Competition in the rear view mirror
At Algood our competition keeps us on our toes but over the years we have learned that the best way to compete is to do what we do best and the best way to view our competitors is in the rear view mirror. Here are six ways in which we think about competition.
- Competition can be a motivating factor.There are actually two ways in which competition can be a positive influence. On one hand, we will often combine competitive influences with our own capacity for innovation to create new products or improve existing ones. On the other hand, the practices of our competitors sometimes provide a guide in how not to do business. I am frequently shocked by the quality and deliverability standards of many of our competitors.
- I take no comfort in negative comments about our competitors.Increasingly I am hearing more negative comments about our competitors from both distributors and OEMs. In fact, there have been times when I have witnessed a caster company being totally trashed by a customer or prospective customer. Believe it or not, I take no satisfaction in hearing those comments. If anything I am saddened by them because, to some degree, a negative comment about one company is a statement about the whole industry.
- We have no desire to mimic our competition.We can learn from our competition. We are humble enough to understand that everyone is this business has the potential to teach us something. But we have to be true to our values and the high standards to which we are committed. For example, I would never ask our sales team to be like the salespeople of our competitors. We breed our representatives to be true castersmiths that combine rich knowledge with impeccable principles.
- Imitation is the greatest form of flattery.My father taught me that when another producer knocks off one of our products, to take it as a compliment. Frankly, it doesn’t bother me at all when we are copied. If anything it is validation that we are providing the right products to the marketplace.
- We understand the pressures of pricing.We understand that project budgets are critical and that cost-savings are a huge contributor to business success. We work closely with our customers to deliver the right product at the right price. However there are times when we are asked to match a competitor’s quote and our most responsible response is to pass. If matching a competitor’s price means putting our quality standards at risk or, in any way, not being able to deliver a product of which we are proud, it’s not worth it – no matter how much we want to help or how big the project.
- Achieving excellence is the most effective approach to competition.We can never stand still and never be complacent. If we focus on using our integrated manufacturing facility to always be innovating to truly meet the needs of our customers; if we dedicate ourselves to producing the highest quality product and delivering it on time; and if we bend over backwards to service our customers to death, we will always be in the driver’s seat – viewing our competition in the rear view mirror.
This is a dangerous business!
When I heard about the recent criminal conviction of a site manager whose negligence took the lives of three employees, it made the hair on the back of my neck stand up. I was incensed at the fact that someone in a management position would risk the lives of workers in order to save time or money. And I was reminded that manufacturing is a dangerous business that imposes an almost sacred responsibility on management for the safety of workers.
That may sound funny. People wouldn’t ordinarily view manufacturing casters as a dangerous occupation. The reality is that our employees work every day with all kinds of machinery that exerts huge amounts of force. If the equipment is mishandled or if a malfunction is not responded to properly, then injuries can happen. Believe me, I’ve seen my share of minor mishaps and even one or two serious incidents – and they are not pretty.
Safety is always top of mind for me. It’s always on my agenda and here’s what we are doing about protecting the safety of our staff.
Daily Walk-Through. Every day at 7:15 am, I’m accompanied by our VP of Manufacturing, our Plant Manager and our Quality Assurance Manager on a full walk through of the plant. While production is a large part of our focus, I am always watching out for matters of safety. Are employees wearing the correct safety gear? Are the exits clear? Are aisles uncluttered? Is machinery being used properly? If I see anything that is amiss, it gets dealt with immediately.
Health & Safety Committee. Just having such a committee isn’t a big deal but fully vesting it with independent authority is. The majority of our Health & Safety Committee members are employees, not management. And yet they have tremendous responsibility for the ongoing safety in our plant. They meet regularly, conduct their own frequent walkthroughs and create policy. I purposely stay at arms length from the Committee because even the tiniest possibility that safety would be sacrificed – or be perceived to have been sacrificed – for any financial purpose is reprehensible.
Incident Response. When something goes wrong, I want to understand what happened in complete detail. On occasion I have spent hours reviewing video from the plant floor in order to be fully understand the cause of – and the response to – a safety situation. Ultimately, it’s never just one factor that leads to an accident. There are always numerous cascading causes and being able to trace the root of the problem is critical.
Communicate. When it comes to safety there is a straight line from the factory floor to my office. I want to know about anything that is having an effect on the safety of our staff. When something goes wrong, I personally speak with the production team involved. The point of the conversation is not to criticize or berate but rather to determine the steps that will make sure the problem never re-occurs. At full staff gatherings, it’s important that I’m the one who speaks about the importance of safety so that our employees understand that it’s an absolute priority.
Whenever I hear about a worker that is seriously injured or God forbid dies on the job, I am mortified. Every one of those incidents is preventable and I often think that if company owners or managers had been less concerned with profit and more concerned with safety, the incident would never have occurred.
At Algood our greatest investment is our employees and we will do whatever it takes to keep that investment safe and secure.
You can’t replace face-to-face
I will travel across continents to see a customer. With so many modes of communication at my disposal it seems crazy. I could call, email, chat or even video-conference without leaving my office. On top of that business travel can be very challenging with all its lines, weather, flight and mechanical delays. Based on all that you might wonder why I would fly 3,000 miles for just one meeting. The answer is simple. You can’t replace face-to-face.
The truth is that I really enjoy personally meeting valued customers. It’s an opportunity to watch someone’s reaction as they handle a sample or sense their excitement as they talk about their business. It’s often a great way to help entrepreneurs see the potential that exists within their own customer relationships. Meeting someone face-to-face is doing business in real time and its very powerful.
At Algood, our casters are more than just a commodity. Every one of them includes the people that stand behind the product. When I meet with a customer, he or she is literally seeing the face of Algood. With every commitment that is made, I am putting my personal reputation on the line.
Increasingly, our customers are being confronted by the erosion of good vendors. Loyalty is being replaced by opportunism. Customer service can’t compete with corporate sustainability. Our customers are in the trenches, day in and day out – trying to develop, build, sell, and provide – and they need a supply partner they can trust, that has their back and will stand behind a product. When I take the time to travel to see a customer, the message is clearly that Algood is taking the long view. We want to build relationships and establish trust. We’re looking for CFL – Customers for Life.
Being on site provide unique opportunities. I can meet with a group of sales reps or product engineers or buyers and give them first-hand explanations of caster design and engineering – or introduce them to a new product line. While it may be expensive to bring all those people together, the benefit of the personal interaction outweighs the cost.
Often times, I’m able to accompany customers on a visit to their customer’s work site and see first-hand the conditions in which a caster has to perform. When I am able to personally see the environment in which casters are being operated and truly understand the objectives that are not being met, it makes all the difference in the world. I can personally guide the design and engineering of products that will better meet the end-user’s needs, which, in turn, establishes our customer as a trusted supplier.
My personal interaction proves that we understand that a customer is more than just specifications and requirements – more than just an order. My visits are an opportunity to learn more about the people, not the companies, who are our customers. It also demonstrates that Algood casters are more than just product. They are our craft and our livelihood and I am proud to sit with customers and talk about the casters and wheels we manufacture in North America.
There’s no better feeling than the one that comes from completing a sale in person. While there are dozens of ways to complete and execute agreements, there is something irreplaceable about shaking someone’s hand. It embodies the mutual trust that is part of our customer relationships and it represents the promise that we make when we provide our products.
Frankly, getting out on the road and meeting with customers is just good business. And it leads to more business because being there is no substitute for being face-to-face.
I’m always looking for opportunities to meet with customers. If you would like to have a personal meeting please feel free to contact me.
Nice guys finish … First
What does being the first to bring a product to market say about a company? Some might say it’s creative or innovative. Others might conclude it invests significantly in R&D. Still others might see that company as highly competitive. All of those things might be true, but from my perspective in the caster industry, being the first to introduce a new product means that you have powerful relationships with your customers – and that Leo Durocher was wrong when he said, “Nice guys finish last.”
All of the industry-firsts that we have developed were in response to customer requirements. For me, the most impressive example of that was when Algood was the first to put hub caps on casters.
At the time, thread guards were all the rage. Everyone was putting them on casters to protect them from dirt and debris. But they weren’t very attractive. We had a customer in the store fixture business that was working on a new display that needed to be totally outstanding. In fact, he told us he wanted a wheel on the casters that would make people say, “WOW!” So, we set out to satisfy our customer and break new ground.
The inspiration came, as it often does, in a very ordinary moment. I was in the car with one of our sales reps and noticed the great looking wheels on the car beside us. “That’s it!” I said. “We should we put hub caps on those casters and make them look as cool as that car.”
It had never been done before which meant we had to do tons of research. I went to the SEMA auto products show and came back with catalogues and magazines. Our design and engineering teams explored all the possibilities. We developed a number of designs and processes and worked with the customer to narrow choices. In the end, we came up with an industry-first, created a gorgeous caster and had a customer who was simply ecstatic.
The other great thing about this project was that it demonstrated how casters can contribute to the overall aesthetic of a product. So often casters are an afterthought. We’ve seen many situations where casters aren’t even included in the product specs. Then we get a panicked call from a buyer, engineer or product manager either needing casters in a real hurry or having to meet some unusual spec – or both. It was wonderful to work with a customer who saw the caster as an essential part of the product.
Of course, other caster producers tried to copy the WOW hub cap but none of them matched the quality and attention to detail. We are used to having our products copied. It goes with the territory. On more than one occasion, I’ve been in offshore manufacturing facilities and have seen exact replicas of one of our proprietary products being made. It’s frustrating for sure, but I prefer to see imitation as the highest form of flattery.
The truth is that, in some ways, we are always creating new products. With our integrated manufacturing facility we have almost unlimited resources at our disposal. We routinely modify existing products with new moulds, dies and stampings. Our 3D printing station allows us to go beyond visioning and be able to closely examine prototypes. Whether it’s custom stems, modified top plates or unique braking systems, we are always innovating. These products and components may not be as sexy as hub caps, but they are just as much a result of our dedication to meeting customer requirements.
Product innovation also makes our casters less of a commodity. It’s great for us to be able to quickly satisfy buyers with “off the shelf” products that can be delivered quickly. On the other hand, our customers know that we have the unique capability to create configurations that don’t exist in any company’s catalogue.
Ultimately being the first to market with a product is a result of putting your customers first. When you value your customers you’re prepared to innovate to meet their requirements. In turn, they value your commitment and creativity. When that happens you’re both number one.
The Law of Lebron
Watching this year’s NBA playoffs was disappointing (to say the least) as a Toronto Raptors fan, but ultimately there were lessons to be learned from watching all those games – not just in basketball, but in business as well. One of those is that you’ve always got to close the deal and the other is what I call the Law of LeBron. It’s always tempting to believe that one superstar player is going to single-handedly win the championship or that an incredibly talented individual or a sensational department is going to carry the whole company to success. But the Law of Lebron confirms those things aren’t true and that it takes a well balanced team or company to win the day.
Boston and Houston were each within a heartbeat of an appearance in the finals but they couldn’t close the deal. They each had a moment in game seven when they could have put the game and the series out of reach for the Cavaliers and the Warriors respectively. But they couldn’t finish.
There are so many times in business when you need the extra effort to perfect a design, to find a solution, to think out of the box, to deliver a little sooner or to make the sale. Take your foot off the pedal and you open the door to failure. There’s lots of stuff going on every day and it can be easy to lose focus or to be convinced that 80% is good enough. The caster business is incredibly competitive. Forget about having to beat one other team. There are many, many companies that would be only too happy to scoop up what we leave unfinished. Our success has been built on always going the extra mile for our customers. Whether that’s manufacturing and delivering 72,000 casters in 45 days or designing the caster that finally solves a nagging ergonomic problem, we are always finishing.
LeBron played brilliantly making highlight reel plays that were often unbelievable and setting playoff records in about a dozen categories. But clearly it wasn’t enough and this year’s playoffs demonstrated that one player, even the best player of a generation, doesn’t make a team and can’t deliver the ultimate win.
How many times have you seen the hotshot salesperson who is convinced that he alone is responsible for the company’s good fortunes and the people in planning, production and fulfillment don’t do anything special? What’s even worse is the opposite situation – a company that has pinned all its hopes on one person. What’s true of individuals is also true of departments. Apple’s design team may have basked in the limelight, but without engineering, production and marketing expertise, they would have had great looking technology that never got to market and didn’t work. At Algood, we have learned that it takes a well-balanced company with a team of contributors to achieve success.
The Law of LeBron also applies to the iron triangle of pricing, quality and timing that I wrote about last month. We are proud that our customers don’t have to sacrifice any one of those to get the other two but we also realize that each of those components contributes equally to our success. If you think that great pricing in the absence of a quality product is going to save your butt, think again. Many years ago I was at the Neocon furniture show and there was a vendor taking orders for office chairs at an advertised price that was a fraction of any other supplier. It turned out that he couldn’t deliver the chars at that price and what he was really doing is collecting business cards. He’s not in business today.
For us, one of the benefits of having an integrated manufacturing facility is that everyday we are reminded that every one of our teams contributes to our success. While it’s tempting for the engineers and designers or the guys in the tool and die area or the injection moulding operators or even me as the President, to think that our contribution is the greatest, it ‘s just not true.
The Law of LeBron proves that the recipe for success includes a large helping of humility and a holistic, balanced, team approach in order to guarantee success. Perhaps more than any of his contributions to basketball, what we should really be thanking LeBron for is an important business and life lesson.
Two Out of Three isn’t Good Enough
This also relates to the Iron Triangle, a concept that says there are three primary interrelated components to any project and, to maintain the triangle, you can change two but not all three. In sales terms this gets translated into this statement: “Price, quality, time – choose any two.” The inference is that to meet your budget and have outstanding quality, you’re going to have to settle for slower delivery times or to get quick delivery without blowing your budget, you will have to sacrifice quality. At Algood, we think that in today’s customer driven marketplace, the Iron Triangle (and Meatloaf’s formula) doesn’t cut it. To be a truly customer centered supplier, you have provide three out of three. That’s why we deliver outstanding quality in what are sometimes lightning-fast delivery times while remaining perfectly within budget. Here’s how we do it.
Believe it or not this is a story that starts ten years ago. In response to the economic downturn of 2008, we re-examined our business model and decided not to take the easy approach and slash costs, lay off employees and cut corners. Rather we took the path less traveled and decided we needed to become more efficient, more design focused and to better leverage the advantages of being a fully integrated manufacturer. We re-committed to putting our customers at the very centre of our operation.
That led to innovation in our production processes as well as in engineering and product design. Over the past ten years we have introduced more new product designs and improvements than we did in the preceding forty years. Many of those have been industry-firsts but all of them have been in response to the needs of customers.
We focused sharply on quality control and adopted strict ISO standards, examining processes and materials to ensure that every caster was perfect – before inspection. That, in turn, has led to NSF certification of many of our products and more impressively to a proven 99% quality completion rate.
We have become agile manufacturers using all the advantages of our in-house facilities – engineering & design, tool & die, robotic welding, stamping and injection moulding. As opposed to many corporately owned enterprises, we can turn on a dime to react to the marketplace. We are experts at creating custom solutions, from product design to the design of materials and processes and that makes us better able to react to the unique needs of our customers. We have more standard caster configurations than any other manufacturer. At a moment when the demands of time and the need for precision quality are leaving offshore suppliers at a competitive disadvantage, more of our customers are bringing us more business opportunities and we are converting more of them into sales.
That’s also because we spend a tremendous amount of time face to face with customers. I personally log thousands of miles, traveling to see our customers, and in the case of our distributors, often meeting with their customers. We educate and advise our customers, bringing them up to date on developments in the caster industry and frequently on ways they can improve their own productivity.
Getting back to the Iron Triangle concept, we are routinely delivering on quality, schedule and budget. Going from concept to drawings to tooling and final production can be done in six to eight weeks. We recently completed a custom order for 72,000 rigid and 72,000 swivel casters, going from concept to carton in 45 days. Every piece met our quality standards and our customer’s budget was left in tact. And that’s not a one-off. We are more frequently fulfilling those types of requirements.
It seems to me that in 2018, telling customers that we can only meet two of their three main requirements won’t work and isn’t the way we want to do business. Customers want it all – quality, schedule and budget – and we’re committed to giving it to them three out of three.