Prioritized Growth Strategy Brings New Life to Southwestern Illinois Manufacturer
After losing two of its largest customers to off-shoring in 2004, times only got tougher for Roesch, Inc., a leading manufacturer of component parts for OEMs in the HVAC, white goods, fireplace and barbeque industries. Continued downward pressure on sales, increased material costs and reduced shop-floor productivity had the 95-year-old company struggling to define its identity and its future. Enter IMEC.
Roesch’s relationship with IMEC began in the late 1990s with a successful ISO registration and continued over the years with a variety of quality, information technology and workforce training initiatives. So when IMEC approached Executive Vice President Debbie Voges-Schneider with a proposal to help the company create a prioritized strategy for growth, she was receptive.
“I used to view IMEC as a technical resource,” she says. “But after working together on this latest effort, I realize they are a true business growth and development resource as well.”
To kick off the initiative, IMEC conducted a detailed assessment that included interviews with a number of key customers, suppliers and employees, then put together a comprehensive plan to help the company execute improvements in everything from raw material ordering, equipment set-up and tooling to competitive messaging, sales planning and workforce training. These changes are helping Roesch eliminate unnecessary operating steps, take costs out of its processes, reach more prospects and offer customers more competitive pricing.
As a result, sales are up—significantly. Voges-Schneider reports that booked orders increased 15 percent in the first five months of 2011 compared to the previous year, and she’s hopeful for an overall sales increase of 50 percent over two years. Inventory costs are trending downward, and the company expects to see a decrease of as much as $1 million in this area, along with significant reductions in capital spending. Plus, lean manufacturing activities are improving shop-floor productivity.
“We’re seeing better efficiency and freeing up production capacity,” Voges-Schneider says. “Margins are improving even when sales are not. Increased productivity has opened up opportunities for growth.”
One area of the business that’s seeing that growth is ice. Roesch is a full-service supplier of Ice Maid® equipment and supplies to the packaged ice industry, and IMEC helped the company develop and implement a comprehensive marketing strategy for this product line that included a professional catalog, interactive website with 24/7 online ordering, and targeted print and electronic mailings.
“IMEC helped us determine which marketing and prospecting activities to outsource, so we could free up salesperson time for what they do best—interacting one-on-one with our customers,” Voges-Schneider says. “Now, we’re in the process of further segmenting our marketing campaigns to reach different customer niches and better penetrate existing markets.”
Roesch’s goal is to grow Ice Maid sales by 25 percent over two years, and Voges-Schneider reports that booked orders are already up 17 percent since January. And as the company converts more of its customers to the online catalog, she expects to save $15,000 in printing costs annually.
Still, the project’s biggest impact on Roesch may be cultural. “This is a systematic cultural change for our organization, and IMEC has given us the tools to communicate that to our employees—to show everyone that this will make our jobs easier,” Voges-Schneider says. She also indicates that the IMEC team’s experience on the shop floor went a long way toward helping employees feel comfortable with the changes. “IMEC’s people are seasoned professionals with technical know-how and real-world experience. They speak our language. They give practical advice. They spend time on the shop floor.”
Company:
•Roesch, Inc. – Belleville & Evansville
• www.roeschinc.com
• 56 employees
• Manufacturer of component parts for leading OEMs in HVAC, white goods, fireplace and barbeque markets and full-service supplier of Ice Maid® equipment and supplies to the packaged ice industry
Situation:
After losing two of its largest customers to off-shoring in 2004, times only got tougher for Roesch. Continued downward pressure on sales, increased material costs and reduced shop-floor productivity had the 95-year-old company struggling to define its identity and its future.
IMEC Solution:
To create a prioritized strategy for growth, IMEC conducted a detailed assessment that included interviews with Roesch’s key customers, suppliers and employees, then put together a comprehensive plan to help the company execute improvements in everything from raw material ordering, equipment set-up and tooling to competitive messaging, sales planning and workforce training. These changes are helping Roesch eliminate unnecessary operating steps, take costs out of its processes, reach more prospects and offer customers more competitive pricing. For the Ice Maid business line, IMEC helped Roesch develop and implement a comprehensive marketing strategy that included a professional catalog, interactive website with 24/7 online ordering, targeted print and electronic mailings, and market segmentation plans.
Results:
• Booked orders up 15% in first 5 months of 2011
• Overall sales increase of 50% anticipated over two years
• Inventory cost reductions of $1 million expected
• Significant reductions in capital spending anticipated
• Shop-floor productivity, efficiency and capacity improved
“I used to view IMEC as a technical resource. But after working together on this latest effort, I realize they are a true business growth and development resource as well.” – Debbie Voges-Schneider, Executive Vice President
