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by Jeff Moad, MA Editorial Staff Posted on Thursday, January 03, 2008 12:13:38 PM   Back in 2002, Haider Nazar received an offer that was not difficult to refuse. Nazar's father-in-law wanted him to take over as CEO of a small precision-parts manufacturing company, Kemco Tool and Machine Company, which he owned. The 85-person firm in Kirkwood, MO, while cash-flow positive, was not growing. Worse, Kemco (since renamed Kemco Manufacturing) relied on mature programs at just a few defense contractor customers -- Boeing Co.'s Integrated Defense Systems unit accounted for 65% of Kemco's business -- and many of them were beginning to look to lower-cost, offshore suppliers for parts. "At the time, job shop work of the sort Kemco was doing was becoming more and more commoditized," Nazar says. "Those margins were shrinking year to year. If the company didn't change and approach the market differently, this business that had been successful for 50 years would have been in jeopardy." Not the sort of opportunity that ordinarily would attract an executive like Nazar, who was accustomed to high-growth, rapidly changing markets. Before getting the invitation to run Kemco, Nazar had been a consultant in Accenture Inc.'s San Francisco office and had acted as a key manager in two Silicon Valley software startup companies. Nazar told his father-in-law that he'd be interested in taking over Kemco under one condition. "I said it could be interesting if we really tried to grow the business in other directions," Nazar recalls. "We had to move away from being a machine shop that relied on [the] pockets of Boeing and diversify. We needed to become a true solution provider offering contract manufacturing, engineering support services, and technology solutions." With the approval of Kemco's owner, that's just what Nazar did. Building on a lean transformation initiative and a technology makeover, Nazar and his team have diversified the company, turning it from a low-margin job shop into a full-service contract manufacturer offering a wide range of engineering services and even an on-demand program tracking system that lets customers closely monitor the status of projects at Kemco. These efforts have allowed Kemco to solidify its relationship with existing customers and, more importantly, to begin expanding its customer base for the first time to commercial aerospace and Department of Defense projects. And Kemco is growing again. Revenues are up 20% over the past year and 16% over the past two years. And prospects are good for significant future growth. All-Around Effort Kemco's ability to overcome competitive challenges facing many manufacturing companies today -- specifically its ability to transform its business model, align with customers, tune its supply network, and retrain its workforce to its competitive advantage -- have earned the company Managing Automation's Progressive Manufacturer of the Year award for 2006. When Nazar arrived at Kemco in 2002, he knew he could not hope to attract demanding new aerospace industry customers unless he could demonstrate adherence to world-class practices within Kemco's four walls. "We had to open up to world-class customers like Boeing and Lockheed and impress on them that we were coming to play in this world of global competition," Nazar says. He started by introducing a new system and standard processes for procuring material, scheduling production, and optimizing pricing. Historically, since the company typically worked with only a handful of customers, it could get away with managing such information in a collection of spreadsheets and stand-alone databases. Nazar replaced those with JobBoss, an MRP package from Exact Software (Andover, MA) for contract manufacturers that supports make-to-order and engineer-to-order processes. Page : 1 2 3 ... NEXT |