When times are tough…

by Nick Shelton, VP Sales/Marketing, Shelton Machinery

When times are tough you can give up and blame outside influences for your failures, or you can set up and excel in your industry.  The last part of 2008 and all of 2009 were extremely tough for the machine tool industry.  When manufacturing slows down, the first thing that companies cut from their budgets is capital equipment.  As things improve, they more often than not have to build up cash reserves before they can resume investing in capital equipment.  This obviously can make cash flow very difficult for machine tool manufacturers and their distributors.

As a distributor for Mazak, the world’s largest machine tool builder, we are very fortunate to have a product line that is very diverse.  This allows us to compete in many different markets.  However when every market is down, as was the case in 2009, we had to change our business model in order to succeed.  We wanted to do this while remaining loyal to our employees and customers.  This meant that we had to retain all of our employees and support branches.  Doing this would demonstrate to our employees that we care about them and their families; it also would show our customers that we are not going anywhere, which we know is important to them.

To maintain our workforce, and in doing so, not diminish the support arm of our company, we had to really look at our business model and cut the fat.  While doing this we kept in mind that our successful customers needed to be doing the same thing.  We cut costs however we could, from janitorial supplies to opting our of the promotional suite at the Brickyard 400 which we’d done every year previous.  As things are improving in 2010, making these cuts has allowed us to be in a very competitive position in our market.  Our company is operating much more efficiently than it was, even in the good times.

While times were slow and cash flow was only going in the negative direction, we felt that it was still important to invest in the future, and find ways to support our customers.  In 2009 we developed the Shelton Machinery Learning Center.  This was developed so that we could bring customers to our facility and provide them with free-of-charge classes on a variety of topics.  We rotate our speakers from shop floor issues, to front office concerns.  So if you were a production manager and needed some advice on workholding, you had the chance to attend two different events.  If you were a business owner or manager you could have attended events dealing with things such as insurance or tax advice.

Because we had the ability to get the dirt off our shoulders and step up to these challenges, we are a market leader in 2010.  In 2009 we decided that we needed to upgrade our marketing efforts as another way to stay in front of our customers while competitors were struggling to do so.  We signed on with dgs Marketing Engineers.  They revitalized www.sheltonmachinery.com, improved a tired newsletter, and helped update our logo.

Obviously we were able to do all of these things because financially Shelton Machinery was in a position to invest in the future when times were slow.  We also invested in our employees and suppliers!  Many years of being fiscally frugal and investing in our business at critical times allowed us to be where we are today.

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