A Chicago-area company increased its productivity with the purchase of a CNC router and sales soared.

Dwyer Cabinetry manufactures high-end custom cabinetry and furniture for the remodeling and new construction market.

In today’s economy, a successful woodworking shop is one that is efficient in both the shop and office. Automation is a key component to efficiency, and as a result, more and more companies are investing in software and high-tech machinery, such as CNC routers, to stay competitive and increase profit margins.

Dwyer Cabinetry Inc., located in Bridgeview, IL, is one such company that has parlayed an investment in a CNC router into increased sales and a spot on Wood & Wood Products’ 2007 WOOD 100. Dwyer Cabinetry came in at number 55 on the list, and Patrick Dwyer, owner, credits that to the purchase of a CNC router approximately three years ago.

Over the past few years, Dwyer dropped from a total of 14 employees to four (two in the office and two in the shop). During that time, his sales increased significantly thanks to the addition of the CNC router, he says.

“In 2004, we had $559,420 in sales with 10 guys,” says Dwyer. “In 2005, we jumped up to $775,000 and in 2006, with two production employees, myself and my wife, who worked part-time, we went to $970,000 in sales. I decreased my workforce by (more than) half because of the router,” resulting in reduced labor costs and higher profit margins.

Dwyer says he also was able to eliminate three to four machines because everything is now machined in a “nested-based rout” on the CNC.

“We used to have to cut [the panel], stick it onto a cart, roll it over to the other table saw and dado it, then stick it back on the cart and roll it over to a line boring machine,” Dwyer says. “We got rid of those machines — sold them, made good money on them and moved on.”

Dwyer says that since a part no longer has to be touched “five times, I can put a 4-by-8 piece of wood on the router, push a button and go outside. When [the machine] shuts off in four minutes, I’m putting it in a cart and edgebanding. So, after my first sheet, I can edgeband while the [CNC] is machining parts. The savings in material handling will blow people’s minds, but they won’t know [the time savings] unless they are hitting the stopwatch as they are [machining].”

According to Patrick Dwyer, all cabinets fabricated by the company have glue and dowel construction, and each piece is hand stained, glazed and rubbed.

Purchasing the CNC

Dwyer says that he has used Cabinetware design software for a number of years. About four years ago he attended the International Woodworking Fair in Atlanta, GA. While talking to a Cabinetware rep at the show, he told him that he was interested in purchasing a beam saw.

“The guys at Cabinetware were like, ‘Why do you want to buy that?,” and I said, ‘I want to increase production.’ They asked, ‘Have you looked at the CNC router?,’ and I said, ‘That’s for high-end, high-volume.’” Dwyer says the rep then told him to go watch one of those machines run.

After getting a look at the CNC, Dwyer was so impressed with how it worked, he says, “I wanted to grab a hammer and beat myself in the head,” he laughs. “I was glued to the machine all day.”

After researching several CNC routers to find the most appropriate one for his shop, Dwyer eventually decided to purchase an Anderson Stratos Pro nested-based machine.

Life-Changing Advice

Efficiency in the shop alone may not bring about the high profit margins most owners crave. To reach that level of success also means fine-tuning office procedures.

About six years ago, Dwyer says that he hired management consultants: Not to tell him how to build cabinets, “We know that,” he says, but to develop a system that would give him the accurate costs of running the business.

According to Dwyer, the consultant cold-called him one day and asked if he had ever considered using a consulting firm. Dwyer said “No,” but agreed to let the consultant come out and talk to him.

Dwyer Cabinetry uses Blum hardware in its cabinets.

During the appointment, Dwyer says that the consultant asked many questions that he did not have the answers to, such as “What’s your average cost per job? What are your overhead factors?”

“I felt like a moron,” says Dwyer. “I have two college degrees, and I’ve run a business successfully for more than 10 years. And I was like ‘I don’t know.’”

Working with the consultant, Dwyer was able to tie everything together, from a management standpoint.

“They helped set up spreadsheets and tightened up my proposals. When I present clients a package now, it looks unbelievable,” says Dwyer. “[The new procedures] really allowed us to feel confident. When I throw that number out there, I’m confident with [it]. If I lose that job, I feel sorry for the poor guy getting it, because I know he is not going to make money.”

Dwyer adds that every job is counted in minutes, not hours, and because of that, it gives him an accurate snapshot of what the company is capable of doing.

Invoice prices for materials are kept in a price book and continually updated. The company also runs shop times on every procedure and records it in a manual. The time runs are so detailed that they include how long it takes to load a truck and deliver. (It is 15 cabinets per hour and a delivery time of four hours, Dwyer notes.)

This process allows Dwyer to know his exact costs for materials, labor and overhead, and it gives him flexibility when determining how much profit he wants to make on a project.

Also, in a slow economy, Dwyer says that he can “throw a job into the shop at cost to keep everyone working and the wheels turning. I can do that comfortably — put zero in there and know I’m not losing anything. I’m breaking dead even on the job. Everyone gets paid. I’m keeping the machinery running, keeping the guys working, and I’m not shutting the doors.”

Detailed time runs also allow Dwyer to determine where “bottlenecks” are in the shop and help him decide whether purchasing a new machine to alleviate the problem will be cost effective.

For example, Dwyer says that his biggest time-consuming area right now is in finishing, which requires approximately six hours.

“To fix that problem, I have to look at new machinery. That six hours is going to help me determine if I can afford it or not. I have to look at what I do historically for a month, a quarter and a year and say, ‘We did 6,000 man-hours in finishing last year. This machine is going to cost me $250,000. It’s going to be roughly $2,200 on a lease payment a month. Am I going to make money on it?’”

The ability to be profitable is the ultimate goal. “We’re a business,” Dwyer says. “And cabinets are a byproduct of that.”

The company’s operations procedure manual also works as a training manual, Dwyer says. The book contains the order of operations for the shop and office.

“Everything we do in this business is documented in this book,” he adds. “Not only will [the employees] know what is expected of them, I also know how I’m bidding [each project] and they’re going to hit my targeted time.”

A Lean Shop

Besides the CNC router, other equipment in the shop includes: a Joos hot press, Uhling case clamp, Blum hinge press, Brandt edgebander, a Gannomat horizontal boring machine and a Gannomat glue and dowel inserter.

Dwyer says that he does not mind outsourcing certain things, such as doors and installation. The goal is to focus on what they do best.

“If someone can do it better, cheaper and faster, you’re a fool to try to do it yourself,” he says. “Guys say it all the time [that they are trying to control quality]. I don’t try to make a hinge. I’m not a blacksmith. I buy a hinge, so why not buy a door?

“Cabinetmakers are trying to make cabinets. I’m trying to make money, and that’s the bottom line,” Dwyer adds.