Growing Pains

Can your plant's current capacity handle future growth or should you build a new or second plant?

Can your plant's current capacity handle future growth or should you build a new or second plant? This was the focus of the article, "Room To Grow," by Peter Strozniak, in the June 1999 issue of Industry Week Growing Companies Edition. For small companies it is an issue of constant communication with customers so that they can plan to meet the customers' future expectations.

Before a plant owner/manager judges his present capacity, he needs to review his operations. Can the company improve anything within the current plant that would improve operating inefficiencies, such as bottlenecks, excessive production travel distances, excessive handling?

What about excess inventory or raw materials? One company in the article stored a tremendous amount of cardboard, when the cardboard supplier was just three miles away.

Survey customers to anticipate growth and take into account any new business you may acquire. Sit down with key employees and map out a plan for the future that includes three necessary elements: 1) Future product lines and volumes; 2) Process changes required; and 3) Determine needed resources, such as staff, equipment, etc. to support growth.

For Bill Wiggins of Automation Plating in Glendale, CA, his customer actually suggested that Mr. Wiggins consider building another plating plant in Arizona. The customer was satisfied with the work, but the freight charges were becoming a burden for him. Since the customer constituted 5% of Automation Plating's total sales, Mr. Wiggins seriously considered it.

According to the article, Automation Plating researched the availability of raw materials and the potential for zinc plating in that area. It opened a 25,000-sq-ft plant in Maran, north of Tucson, AZ. The plant employs 10 and could create 20 more jobs.

Many small businesses can find incentives. According to Robert Pittman, analyst for Lockwood Greene in Atlanta, small manufacturers can receive land at reduced prices or with leases. And sometimes the land is offered free. Other incentives Mr. Pittman suggests a small business owner/manager investigate include reduced rates for power use and funds for employee training and recruitment.