During an economic downturn, many companies go into “turtle mode.” They pull in their heads and stop spending money on anything, least of all internal improvements. But smart businesses realize that when the going gets tough, the tough take a long, hard look in the mirror.
One such company is Michelman-Cancelliere Iron Works (MC Iron Works) of Bath, PA. Looking for new ways to improve their entire company, the management team turned to Ben Franklin Technology Partners (BFTP) for the funding and technical assistance to help make it a reality.
MC Iron Works is a steel company specializing in the fabrication and machining of structural components for bridges and commercial/industrial building superstructures. In addition to the many infrastructure projects on its resume, the company is also a leading supplier of structural steel components to the New York City Transit Authority. Today the company, which has been in business in various forms for more than 70 years, owns more than 90,000 square feet of shop floor space and employs 75 people in northeastern Pennsylvania.
Shoring Up the Foundation
“We were already thinking about improving our manufacturing and production processes when the downturn hit, which just accelerated things,” says John Cancelliere, CEO. Of course, having a carrot on the end of the stick doesn’t hurt, either, he admits. “I also wanted to be prepared for President Obama’s stimulus package. With all the infrastructure projects being planned, I didn’t want that wave to go over our heads.”
The fact that the company has been in business for so many years, with a high percentage of long-term employees, could have spelled the kind of internal inertia that makes fundamental change all but impossible. But Cancelliere knew MC Iron Works was not a typical manufacturer–and certainly not a typical steel company.
“I knew we could increase productivity and market share,” he says. “We just needed an experienced outside eye to help us see what we couldn’t. BFTP was instrumental.” So Cancelliere and his controller, Keith Harper, turned to BFTP, which tapped the expertise of Lehigh University’s Enterprise Systems Center (ESC) to take an enterprise-wide look at the company’s manufacturing and internal processes from start to finish.
BFTP recognized that MC Iron Works had a solid foundation to its business. With a smart allocation of funding and brainpower, the company would be on even stronger footing– not to merely survive the downturn, but to thrive when the economy rebounds and demand reaches new heights.
Beyond Business as Usual
The production process at MC Iron Works is divided into several discreet phases that operate somewhat independently. First is the prep phase, which includes drilling, machining and cutting steel. Next is the fitting and welding phase, and finally the paint shop before delivery to the job site. The company works on numerous projects simultaneously, so keeping everything on track without creating bottlenecks is critical.
“We know how long the whole process takes,” says Cancelliere, “but we don’t have solid data for each key production phase. Having all jobs ready at the right time, and getting them to the right place without log jams, is always a challenge.”
ESC is helping the company build better reporting systems so the management team can predict scheduling needs much more accurately. This includes gaining a real-time understanding of the costs and times associated with every step of the manufacturing process, as well as identifying systemic problems and fixing them.
The Right Place at the Right Time
With more than 25,000 state-owned bridges, Pennsylvania has the third largest number of bridges in the nation. Unfortunately, the Commonwealth also leads the nation in the number of bridges classified as “structurally deficient.” The average age of bridges in the state system is 50 years old. Gov. Rendell has identified infrastructure development as a top priority. MC Iron Works is determined to be part of the solution.
“BFTP and the ESC aren’t just telling us how to make technological improvements,” says Cancelliere. “They’ve become partners in the process. They’re here to make sure that what they recommend takes root and works and that there’s real change.”
Despite the current negativity in the market, Cancelliere remains bullish on long-term prospects. “It’s a win-win for everybody involved,” he says. “Our company grows, we add more Pennsylvania employees, BFTP helps us fund and guide the efforts and the Commonwealth’s economy and infrastructure come out ahead.”