New Firm Focuses on Its People

A young company grows quickly, crediting its dedicated workforce for its success.

By Helen Kuhl

 

It would be almost impossible not to put a photograph of the entire workforce of Casework Technologies front-and-center with any article written about the Albuquerque, NM, company, because among all the "secrets" to the company's success discussed by owner Tony Perno, it is his employees that he talks about the most.

"We have the best people working for us that I have ever seen in the 20 years I have been doing this kind of work," Perno says. "We have very dedicated employees who want to make this their home and know they will be here for the long term."

Perno says that he looks for someone with a real "team player" mentality whenever he hires a new worker, because the entire workforce functions so well together. "The atmosphere we have here is one-for-all. Everyone will pick up the ball and run with it, if they see a need," he says.

 

Casework Technologies>

Albuquerque, NM>

Year Founded: 2001

Employees: 32

Shop Size: 27,000 square feet, plus a 15,000-sq-ft warehouse

FYI #1: Coincidentally, the former tenants in both the buildings leased by C-Tec since it started were woodworking companies.

FYI #2: The company tries to avoid overtime. It runs one shift of four 9-hour days and 4 hours on Fridays. Any overtime needs usually can be met by working an extra 4 or 5 hours on a Friday, leaving employees with a full weekend.

 

"I also admire the way they take pride in their work," Perno adds. "Everybody on the plant floor has the authority to stop a product from going through the line if they see a defect or flaw. Nobody will let bad product go out this door."

Working exclusively in the commercial market, where a company must maintain a reputation for quality work and be able to deliver on time, such commitment is critical, Perno says. "We never would have been where we are today without the quality of the people we have," he says. "Our whole success is based on our employees."

Hitting the Ground Running

>Looking at C-Tec's 27,000-square-foot building and 32 employees, it is surprising to realize that the company has only been in existence a little over three years.

Perno, who has more than 20 years experience working as a production manager in various manufacturing environments, was general manager of another local commercial casework company in March 2001, when that company closed. After attempts to buy that company were unsuccessful, Perno formed an LLC (limited liability company) with two other non-participating partners to start a new company.

Everything fell into place quickly, including finding a building for lease that had housed a woodworking company whose owner was retiring. C-Tec not only leased the building, but also purchased the bulk of the equipment, which was still in place. With Perno's industry contacts, he had several employees hired and was already bidding jobs when the company officially opened April 1, just a couple of weeks later.

 

The reception desk at the Cortez Recreation Center in Colorado features rift-cut maple veneer with contrasting stains, designed to look like a mountain scene. The countertop is granite.>

Although the industry experienced a six-month slowdown after Sept. 11, the commercial market rebounded quicker than the residential sector in his area, Perno says. By spring 2002, business was back to normal for C-Tec and today, "Everything is on a rebound," he says. "If you are not busy, you are just not looking."

One side effect of Sept. 11, however, was that the company shelved plans to build its own facility. Before that date, C-Tec had almost everything in place to construct a new plant, as it was outgrowing its original leased shop. But the company put those plans on hold and instead found a larger building to lease - its current location - which, coincidentally, also housed a woodworking company at one time.

The current shop is 27,000 square feet, and C-Tec recently added a separate 15,000 square feet of warehouse space down the street for storing completed projects. Perno says he still hopes to construct a new building in the next couple of years. "We still have some growth in our future, and it is our plan to build our own facility," he says.

Making Time 'a Friend'

One reason for adding the separate warehouse for storing completed work is that starting in the fall of 2003, Perno changed his scheduling philosophy to try to build as much work as far in advance as possible before it is due, rather than just-in-time.

"Trying to hit a contractor's scheduled delivery date from month to month is like trying to hit a moving target. We feel that the sooner we can get a project built and stored, the better position we are in to satisfy the contractor if the date moves in either direction, up or down, without it hurting us," Perno says. "Too many people in this business try to tie their workloads to specific delivery dates. What happens is that the delivery dates change, and when that starts happening, it is very difficult to fill in the gaps that get created.

 

C-Tec did casework for several rooms of the Farmington Public Library in Farmington, NM, including this display case for kachina dolls. The project features woodgrain plastic laminate.>

"Also, those jobs are moved into a time slot where work already is scheduled. That means there is twice the workload to get out, without any additional time to do it. So people start working overtime and spending more energy and money," he adds. "It happened to me, and it still happens today, even with our new strategy. But it's not nearly as severe; it's much more tolerable now.

"We started it when we were slow in the fall of last year," Perno continues. "We had a lot of work on the books, but it wasn't for that time slot. So I met with the contractors and our partners on some of those projects and said, 'We want to build these projects now. We need you to hold dimensions. Do you have any problem with that?' And most GCs were very receptive to it, and they held certain dimensions for us. That enabled me to bring work that I had on the books for spring 2004 into the fourth quarter of 2003. It also gave me more time in the 2004 schedule, and because I was still three to six months away, it was easier to fill in that time slot than it is with a slot only three to six weeks away."

Part of this scheduling strategy is that the work has to be paid for when it is built. This usually is agreed to at the time of contract negotiation. "The deal is that I'll build it and hold it, but you still have to pay me for it," Perno says. "I'm willing to build it, store it, insure it, and I'll show you pictures of your stuff or you can come take a look at it. I'll invoice you for what I have done. You pay me on that, and we will just progress that way."

Perno says that about 90 percent of the people he works with will pay for it before it is delivered, as long as it is done. "It is a win-win situation for us and the general contractor," he says, "because he doesn't have to worry about me not being on-time for his delivery, whenever it happens, and I have more flexibility in my production schedule.

"We feel that this is the best way to make time our friend," he says. "Too many times in the commercial market, time becomes your enemy. And when you do get the job done on time, you are a hero."

Comfortable in the Commercial Market

C-Tec's main market areas are education, financial, institutional, judicial and health care. The hospital market is especially strong today, followed closely by schools and detention centers. Much of the work is state and federal jobs, which continued to be steady even during the recent slow economy, when many other segments faltered.

"It's politics," Perno says with a laugh. "Our politicians always focus on elevating our education system and upgrading our health care systems. As long as they keep talking like that, our outlook looks good."

Perno says that he prefers commercial work over residential because it is not tied so closely to the economy, in particular to fluctuating interest rates and inflation. He also thinks that the residential customer can be more difficult. "The residential client is tougher," he says. "Sometimes, you can never walk away from the job."

However, commercial work does entail a certain degree of risk, he adds. "The commercial market is not just about building cabinets. That's just the product that we sell. There is a certain amount of risk that we all take, an extraordinary amount of risk when you become a subcontractor. A lot of where our management skills are required is to manage the risk. You don't find 'liquidated damages' on residential projects, and those penalties get passed down to the subcontractor."

 

Work for the Mesa Bank in Glenwood Springs, CO, included this teller line in plain-sliced, bookmatched cherry veneer with a conversion varnish finish. The countertops are marble.>

The company's main market is the tri-state New Mexico, Arizona and Colorado region. Its annual sales have risen each year, and Perno expects 2004 sales to top $3 million, with a backlog of work at $2 million to carry him into 2005.

C-Tec's average jobs range from $70,000 to $150,000, although there are some from $500,000 to $1 million. Most are plastic laminate casework, although the company gets some solid wood or veneer projects and has full finishing capabilities. All jobs are custom, and most work is premium-grade or custom-grade, according to Architectural Woodwork Institute specifications.

The company is an AWI member and certified under its Quality Certification Program. Perno is active at the national level as chairman of AWI's Estimating Seminar Committee and also has served as president and on the board of directors of his local New Mexico chapter. "The networking that can be derived from this type of organization is phenomenal," he says. "You find out that in the final analogy, we all experience the same things; we all have similar achievements and failures. Just talking with people about what they have done to overcome certain situations has been a big plus."

'Standard Manufacturing Principles'

Perno has a degree in production operations management and worked in the steel manufacturing industry on the East Coast before he relocated to New Mexico and switched his interests to woodworking, about 20 years ago. Although C-Tec's projects are custom, Perno says that the company is successful at applying a lot of manufacturing principles that are commonly used in production-line processes.

"We have a mill department, an assembly department and a final assembly area, and that's it," he says. "We have the mill department set up as a work cell with our CNC equipment, and after parts are processed they move by conveyors to the assembly and then final assembly departments.

"The whole travel of our products is probably not more than 150 to 200 feet," he adds. "I may have heard this somewhere else, but we believe that the quality of our products is not determined by the distance the parts travel in the shop."

Employees in the mill department are focused just on building parts, Perno says. When parts move to assembly, they become cabinets. In the assembly area, hardware is added to assemble the cases; in final assembly, they receive doors, drawer fronts and all the final hardware.

"We are set up with project engineers who do the drafting and submittal process and configure the cabinets and the project, based on project needs and in collaboration with the project managers. Then that information is handed to the production department," Perno says. "The production department has its own project engineers, who go through the information and break it down into productive runs, productive releases in the shop. This is a basic manufacturing principle.

"We process in small batch quantities," he adds. "We create the flow, and then it is easier to predict the outcome, when you have significant flow. Again, that's another manufacturing principle."

Fabrication is predominantly 32mm frameless. The mill department work cell consists of a Holzma HPP81 panel saw, OTT Unimatic edgebander, Busellato point-to-point machine and Ayen SKB50 line boring machine. The company also has a Timesavers widebelt sander, a Paoloni sliding table saw and a 50-foot spray booth.

C-Tec does some solid surface fabrication, as well as custom fabrication of specialty-type units, including reception desks, nurses stations and the like. Its custom department is geared to manufacture literally any type of monumental non-standard-type casework, Perno says. "The custom department is where you'll find our very experienced benchmen. It's also where we produce our countertops," he says.

Most of the equipment in the shop has been purchased since the company started. Perno says that he believes strongly in reinvesting into the company, and that includes not only the machinery and facility, but also the people. "We put money back in the form of equipment and in the form of better compensation for employees," he says.

C-Tec provides paid vacations after one year, which grow to three weeks after a five-year tenure. There also are personal days that accrue one day per year of employment. There are paid holidays and a health care program. Perno also hopes to add a 401(k) or retirement plan shortly and, in the near future, a profit-sharing program.

"I'll say again that Casework Technologies is the people who work here. That's what we are all about," he says, adding that among those people is his wife, Debbie, who worked full-time in the final assembly area, until about a year ago.

"It takes a lot to start a business. You put a tremendous amount of time and effort into it," he says. "I couldn't have done it without Debbie. She is a big part of starting this company, and I don't give her enough credit for it."

                                                                                                                                                                                           

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