PRESIDENT AND CEO
Headquarters: Merrifield (about 10 miles from Brainerd)
What it does: Stamping and fabricating of metal components for manufacturers of agricultural, recreational, and other equipment.
Sales: $29 million
Solutions: Adopt lean manufacturing, align costs with revenues, boost company performance
It’s likely that more than a few employees felt their blood freeze the day Reggie Clow called a plant meeting two years ago. Many of them knew that the company’s sales were down 23 percent, with no light visible in the tunnel.
Clow assured his staff that going out of business was not an option. But avoiding tough measures wasn’t an option, either. He had to cut costs. Seventy people were laid off; the remaining employees agreed to wage concessions. The company also switched from a liberal health care plan to health care savings accounts, which require employees to be more active in managing their health care spending. That move saved Clow Stamping $1.5 million a year.
Business looks much better now. Last year, Clow Stamping enjoyed a 45 percent revenue increase over 2009. That has allowed the company to restore employee wages and hire more than 50 production workers. Needless to say, Clow is happy to have those difficult days behind him.
“A few years ago, manufacturing as a whole was in pretty tough shape,” he recalls. “My competitors I talk to today are all busier than they were last year, but none of them are as busy as we are. They haven’t seen the increases we have.”
Clow has his theory about why that’s the case: “Now that our customers are spending money again, they’re likely to give us additional business because they want parts that are going to be there on time at a competitive price. We’ve also got a lot of capability, so we do a lot of value-added work like in-house machining, welding, assembly, laser work, buffing, and grinding. That makes it a little more attractive for our customers to do business with Clow.”
“Clow Stamping does what they say they’re going to do,” says Gary Scherer, one of two principal owners of Schroeder Associates, a manufacturers’ rep agency in Davenport, Iowa. “They support us, they treat us well, and they put out a quality product, which in our business isn’t always the case.”
Seven years ago, Clow hitched his company to a business approach that positioned it for postrecessionary strength. With customers becoming more price conscious, he was looking to cut fat throughout Clow Stamping. But instead of picking up a butcher’s cleaver, Clow discovered an approach more akin to precision surgical equipment. Two of Clow’s customers, recreational vehicle manufacturers Polaris and Arctic Cat, had worked with Jim Retka and Don Kaspari, manufacturing training instructors from Northland Community and Technical College’s Thief River Falls campus. Clow hired the duo, who introduced Clow to the concept of lean manufacturing; over three months, they worked to eliminate unnecessary equipment and reorganize the shop floor to make employees and job setups more efficient.
“We did a lot of videotaping of people and processes,” Clow recalls. “People were nervous about that at first, but I explained that we weren’t looking to fire anybody. We were just trying to understand the way we were doing business.”
Clow’s dedication to continuous improvement has resulted in upgrading software, enhancing technology, and adding equipment like robotic welders. This year, Clow says, he’ll triple his typical annual infrastructure investment by spending $3.3 million on capital equipment and expansion. These improvements should help eliminate some bottlenecks and improve capacity; Clow Stamping hopes to improve upon its 98 percent on-time delivery rate for customer orders.
“My slogan is, ‘We’re going to get better every day until we get perfect,’” Clow says. “We’ll never be perfect, but I want us to be a better supplier tomorrow than we are today.”