Commercial Cabinet Company Focuses on Training and Technology

Buying technology and training employees how to use it effectively is a priority at Caseworx Inc.

By Helen Kuhl

 

An overhead view of the shop floor at Caseworx Inc. in Redlands, CA shows an array of machinery representing the latest in technology, connected by conveyors. The high-tech equipment enables the company to produce between 150 and 200 commercial cabinets a day, handle $100,000 jobs and achieve $5.5 million in annual sales.

The equipment includes two Morbidelli Author 504 point-to-point boring machines, a 2-year-old Homag edgebander and a Schelling FW beam saw (soon to be replaced by two Schelling FMH models purchased at the recent IWF show in Atlanta). But while president Bruce Humphrey doesn’t discount the achievements made possible by owning such technology, he tends to talk more about the importance of his employees to the company’s success than the machines’.

It really goes back to Humphrey’s reasons for starting Caseworx in 1992. He was unhappy with the way employees were being treated at the commercial cabinet company where he worked at the time. When that business changed its direction and left one of its big customers looking for another cabinet supplier, Humphrey and a fellow employee, Steve Sharpless, decided to start their own firm. To keep from being left in the lurch again, the customer became a partner with them.

 

     
     
   
  Caseworx provided cabinetry for the Alvarado Water Filtration Plant’s water testing laboratory, located in the San Diego area.  

Today, the former employer is no longer in business and Caseworx has grown from 4 to 45 employees. It currently leases a 20,000-square-foot building, but has purchased 8 acres of land nearby and is building a 46,000-square-foot facility due to be completed next year.

“When we started here, we had a lot of ideas of what not to do,” Humphrey says. “The owners of the other company were hard-nosed and abused their relationship with their employees. They just worked them too much. They had the same attitude toward vendors. They went at it as a win-lose situation and, of course, they wanted to win. Even if people go along with that for a little while, it just can’t last.”

Humphrey says that providing concrete benefits, such as insurance coverage, pension plans or 401(k)s as well as competitive wages, is an important part of treating employees right. But Caseworx wants to go beyond that to really make sure that employees feel valued.

“We are in the middle of trying to develop other ways to show our sincere appreciation,” he says, “programs that are based around an incentive tied to company profits.” He says that the company has already tried a couple of different programs with mixed results — one was a little too abstract for employees to fully realize the potential amount of money they could earn, and the other set the reward level too high and would have adversely affected profitability for the long-term if it continued.

“I think what is going to work now is a tied-to-profit program done on a quarterly basis, but with us moving more toward open-book management so everyone in the company can see how we are doing all the way through,” Humphrey says.

He adds that he also would like to move toward pay-for-performance compensation in the future, with salaries having a cap that increases according to the cost of living. “Then, if they hit their numbers, they can exceed industry pay by a significant amount,” he says. “That’s what we would like to do and, hopefully, we would be giving a lot of money away and helping our employees be successful, which always works.”

Humphrey also is aware of the importance of intangible elements in making workers feel appreciated. “It’s things like a willingness on the owner’s part to jump in and work on the line if we are tight on delivery dates, and how much he helps out. It sends a huge message to employees to know that the owners don’t feel that any job is beneath them,” he says.

Dealing well with such “soft” issues as employee relations, especially in a larger shop, can be difficult for many company owners in the woodworking industry because they tend to be more technically oriented than people-oriented, Humphrey says. “We know how to run our saws and routers, and that’s what we look forward to doing. But as our companies get bigger, the more time we have to spend managing people. We are short on management skills and being good communicators.

“We realized that our company has grown to a point where we need someone to balance out that weakness, a ‘people-person’ who can really communicate our appreciation to employees,” he adds.

Humphrey also believes that the development of high-tech equipment and its increasing availability to small shops actually puts more emphasis on the role of the employee rather than less. “Technology is good, but it is not an end unto itself,” he says.

 

     
     
   
    Caseworx built about 1,500 plastic laminate cabinets for bio-tech laboratories at IDEC Pharmaceuticals Lab, located in La Jolla, CA.

“Over the last 10 years in the commercial cabinet market we serve, margins have been getting smaller and smaller because of competition from small shops,” Humphrey explains. “We are doing large projects that five years ago, a small shop wouldn’t touch. Today, they ‘touch’ them because they have the automation. They have leased $300,000 or $400,000 worth of equipment and doubled or tripled their output with 3 or 4 people. There are some lists of projects for bid that have 17 or 18 cabinet shops on them. The profit margins have gotten really skinny there.”

In the future, to try to stay competitive in this market will require more than just “buying the gadgets,” Humphrey adds. It’s going to put more emphasis on how employees learn to use those gadgets.

“The key right now is training people how to manage their time, and I think that’s going to be important for the next 10 years or so,” he says. “For example, you can give two employees the same equipment, and one gets twice as much done as the other. It’s not because of his gadgets, it’s because of how well he can manage what they do.

“I’m not talking about which button to push on the machine — you can train that in a day,” he adds. “It’s training people to manage their time on the machine and manage their relationships with other employees in the plant so that there’s more flow that goes through. Some people think that the new high-tech equipment will de-emphasize the employees. But it actually puts the spotlight on training more than ever.”

Caseworx specializes in plastic laminate cabinets for schools, hospitals and laboratories, branching out occasionally into the hospitality market. Its “gadgets,” combined with software that the company developed itself, contribute to a high level of efficiency on the shop floor.

Project drawings are engineered and cabinets are entered into the computer in the office using the in-house software program, which includes bar coding capabilities. It links to Pattern Systems’ optimization software and the information is sent to the Schelling panel saw, where bar codes are generated. The bar codes also set up the Morbidelli point-to-point machines.

All casework is dowel construction. The company has a Gannomat Index 125 dowel inserter and a Hofer case clamp in the assembly area. All drawers are custom-made, and the drawer department is set up as a straight-line cell that ends in the cabinet assembly area. The drawer department includes a Whirlwind cut-off saw, a Powermatic shaper and a shop-made drawer clamp. Most drawers are melamine. When wood drawers are required, Caseworx uses 7-ply prefinished lumber from States Industries.

There is a separate custom department, equipped with a Striebig vertical panel saw, for items that have to be built “from the ground up,” such as radiused contours. The company also has a machine shop and maintains all its own equipment. This includes milling its own machine parts and metal stamping pieces. One employee is dedicated to equipment maintenance.

Most projects call for institutional hinges, which Caseworx buys from Rockford Process Control or Terry Hinge & Hardware. It also uses Accuride drawer slides, and hinges and slides from Julius Blum Inc.

The company has preferred vendors for its supplies and tries to establish tight long-term relationships with all its suppliers. “In working with our vendors, we want it to be a win-win situation,” Humphrey says. “We actually ask our vendors on a regular basis what we can do to make it easier for them to do business with us.”

A similar type of loyal, long-term relationship exists between Caseworx and its customers. It sells only to dealers, instead of selling direct. Although it makes job profits tighter to have another party involved, it’s a system that has worked well for the company.

”For us, it was a natural way to do business because of our background and the way we got started, supplying cabinets for our one dealer/partner,” Humphrey says. “Our challenge in the beginning was not to rustle up sales, but to see how quickly we could handle the sales he sent our way and to make money on them.”

Their first dealer focused on large-scale projects in California. As Caseworx grew, it brought on dealers that specialize in smaller-scale projects in California and, more recently, nationwide. It’s not a system that would work for every company, Humphrey says, but for them it has been a winning strategy.

“The key is in sharing information,” he says. Caseworx has a comprehensive database that details and tracks jobs on its computer, again using software developed in-house. To maximize information-sharing, six months ago the company set up a Web site where dealers can access information about their jobs and check their status. After an initial adjustment period, the dealers now love having this access, Humphrey says.

“The advantage to us is that when dealers see this information, it gives them a nudge to get moving if they need to,” he says. Jobs are built in sequence, and Caseworx does not schedule a delivery date for any job until the dealer gives a “clean release,” which means that field measurements are done and the project is ready to go. So when a dealer looks at the production schedule on the Web site and sees that the delivery dates he wants are starting to fill up, he knows that he needs to get the clean release going or he will miss out.

“We do promise them that when the job gets within three weeks, we will quote an exact delivery date and will live by it,” Humphrey says. “In turn, the dealers can’t move jobs around within that three-week period.”

Letting dealers see how jobs are moving through Caseworx — even when it shows that the company is behind schedule — allows them the advantage of dealing with the reality sooner than later.

“I would rather have them know two or three months in advance if our lead times are getting up real high and it looks like they are not going to get their job in time, so they can decide whether to look for someone else to do the project,” Humphrey says. “They want to know realistically what’s going on.”

Even though Caseworx concentrates on plastic laminate commercial cabinets, Humphrey does foresee some diversification into other areas, because of the tight profit margins in that market.

He adds that his role in the company is being more of a “visionary” and looking toward future developments, while Sharpless is the pragmatist, working in the “here and now.”

“I think every company has to have that balance, and I don’t think there is any one person who can be all things to the company,” he says. “Our goal is to be short on promise and high on delivery, whether it’s to our dealers, our vendors or our own employees.”

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