Implementation of Quality Standards Reverses Plan to Sell Company

Company Description: Manufacturing company specializing in CNC machining

Markets Served: Automotive, Aerospace, Medical, Firearms and Fluid Control Values

Ownership Structure: Family owned–1st generation

In Business: 10 years

Business Engagement Initiative:

The PEN Group, LLC. Was engaged by the owners in 2008. The US economic slowdown and stock market correction significantly impacted the company’s ability to perform and grow. Sales dropped for the first time in the company’s history forcing employees to work a reduced schedule. The company’s profits dropped to break even. The PEN Group was engaged to drive an expansion in sales and to the prepare the business for sale.

We determined the most effective strategy to increase sales was to transform the certification of the Quality Management System to ISO 9001:2008 standards. We assisted in obtaining a grant to cover 75% of the QMS certification training. In addition, the company’s workforce received training in; Lean, GD&T ASME Y14.5 2008, Problem Solving while a new shop operating system was installed.

The implementation of the certification training and the subsequent modernization process completely reenergized the owners and employees. Fueled by a significant rebound in the economy, the business experienced a 4-year recovery with increased revenue and profits.

In the 4th year, the company increased revenues by 100% over 2008. Employment increased by 50% with gross profits reaching 40%. The QMS accreditation resulted in attracting new tier-one and tier-two customers versus the tier-three customers they served in 2008.

The owner’s plans to sell the company were placed on hold. The company is now considering a major expansion utilizing a new emerging technology that will increase sales by 100% over the next three years. This new technology will also be integrated into their R&D process and the revised strategic business plan will require both AS9100 and ISO 13485 QMS certifications. The PEN Group is actively engaged supporting the implementation of the certification process and has been invited to participate as members of the company’s advisory board of directors.

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