Phoenix, AZ-based PremierGarage melds lean manufacturing initiatives and a strong franchise network to lead the pack in the residential garage enhancement products industry.

The lobby of PremierGarage’s Phoenix, AZ, office features a mock garage set-up featuring the company’s cabinets, flooring and accessories.

In 1999, PremierGarage founder and CEO Mark Loberg, was still in his garage.

“When I founded the company, I did everything from the garage of my house, and I outsourced everything,” says Loberg. “I originally had a small cabinet shop here in the Phoenix metro area that supplied me with all my cabinet parts. We started manufacturing everything on our own beginning in 2001.”

These humble beginnings must seem like a distant memory for Loberg, with PremierGarage now a $30 million a year enterprise, with roughly 95 employees and 122,000 square feet of total manufacturing and office space in Phoenix, AZ, and Atlanta, GA. The company also has a healthy franchise system (see sidebar p. 50), with 87 locations in 38 states and three Canadian provinces. Making its second consecutive appearance in the WOOD 100, PremierGarage experienced a 56.40 percent sales growth between 2005 and 2006, with a projected sales growth of 35 percent for 2007.

The company also has won other awards in addition to being named the Best of the WOOD 100. Loberg says that these distinctions build credibility for what the company, and he as the CEO, represent.

“It’s a tremendous way to build value and confidence in the consumer,” says Loberg. “My belief is that consumers are more comfortable dealing with a company that they feel has ethics and credibility, and I think these awards programs bring us that.”

Loberg sees the garage becoming a bigger area of awareness to the consumer. “The acceptance and the willingness to spend money on this previously forgotten area of the home is certainly growing,” he says. “That can be seen not only in the growth of PremierGarage, but also in the growth of the entire category. It’s become a very popular segment of home improvement.”

PremierGarage began implementing lean manufacturing principles into its Phoenix facility less than one year ago.

Getting Leaner All the Time

PremierGarage began implementing lean manufacturing principles into its Phoenix facility less than one year ago, out of a necessity to change its practices in order to continue to meet the growing needs of its customers. Loberg says the change has made the company far more efficient.

“We’re still pretty immersed in getting ourselves fully up to speed on lean,” he says. “We’ve made progress with our operations to the point where I don’t know how we would be able to handle the volume of business that we currently have if we hadn’t implemented lean when we did. We’re seeing it in our bottom line. We’re seeing it in our margins. Due to the implementation of lean and the benefits and the efficiencies that we’ve received from it, we’ve actually gotten better bottom line performance out of slightly less sales.”

The switch has not been as difficult as Loberg expected it to be, thanks in part to a grant from the state of Arizona, which helped the company obtain the services of the Arizona Manufacturing Extension Partnership (MEP), an organization that helped guide PremierGarage through the transition. The Arizona MEP visited the company’s facility numerous times, analyzing processes and performing time studies within the actual working environment.

“It was such money well spent, considering lean is a difficult thing to implement on your own,” says Loberg. “You can go out and read books and do studies, but there’s no substitute for people that are experts in the field and have coached other companies through the process. It took the difficulty out of the implementation as far as I was concerned.”

According to Loberg, the company is still making the transition to lean. He sees the switch to lean as a continual evolution. “I don’t see lean as being the type of thing that has an end to it,” he says. “I think we’ll always be looking at ways where we can shave some time here or eliminate some waste there, and continually improve how we do things.”

PremierGarage’s Phoenix facility, which produces nearly 80,000 panels a week, currently runs its production on two separate work cells. The first cell contains a Biesse WMT-600 Selco panel saw, a Biesse Stream edgebander and a Biesse Rover 24XL CNC router. The second cell contains a Biesse EB-120 Selco panel saw, supported by a Holz-Her Triathlon 1486 edgebander and a Biesse Rover 15 CNC point-to-point machine.

PremierGarage uses a proprietary system called PremierOne floor coating material, which it developed in collaboration with a chemist based out of Phoenix.

The Complete Package

PremierGarage began as a company when Loberg recognized a niche that was not being filled. He says some companies were doing cabinetry for the garage, some were doing flooring, but no one was offering the complete package.

“I started to look around at the market, especially here in the Phoenix/Scottsdale area,” he says. “They were building a lot of very nice high-end, luxury homes with a lot of really nice amenities in them. But there really wasn’t anybody that was focused, especially at the upper-end, on providing everything as kind of a turnkey package for the garage.”

In addition to packaging the products, PremierGarage places high importance on a professional presentation, visiting the customer at home to customize the layout for each specific garage. The company brings a notebook computer loaded with Cabnetware by Planit, providing the capability to design the project with the customer on the spot. “We have the ability to design it, to print it — everything there on the site,” adds Loberg.

The company uses a proprietary system for the flooring called PremierOne floor coating material, which it developed in collaboration with a polymer chemist based out of Phoenix. Benefits of the system include the ability to return the floor to service 24 hours after it is completed, rather than the traditional 7-10 days needed for epoxy, as well as the capability to install the system within a very wide temperature range. The product is currently manufactured for PremierGarage under a licensing agreement, but the company is in the process of acquiring the equipment, setting up its plant and putting people in place to take over the manufacturing.

To get the word out about PremierGarage, the company uses a variety of methods, at both the corporate level, nationally, and through each franchise marketing on its own, regionally.

“We do a lot of things to drive people to our Web site with ad words or sponsored search programs,” Loberg says. “Our direct mail campaign this year will send out in excess of 7 million postcards to consumers advertising PremierGarage, coming from all different locations where our franchisees reside. So we generate a lot of interest that way. We’ll also place ads occasionally to generate national interest to a targeted audience.”

The company also gives its franchisees a subsidy to assist them in regional advertising. In addition, one of the biggest sources of attracting business, especially for the more mature franchisees who have had a substantial tenure in the system, is repeat referral customers. The original franchise in Phoenix, according to Loberg, averages 40 percent of its call traffic coming from this category of customers.

What’s Next?

Even with the considerable growth and success of PremierGarage, the company does not see adding any new manufacturing centers in the near future. Instead, it will concentrate on tweaking and refining what it already has.

“We feel very comfortable with how we’re able to cover our real core centers,” says Loberg. “Our biggest markets are in the Southwest and the Southeast. Coincidentally, that’s where our manufacturing and distribution centers are located. We have had lots of discussions about — in the coming 24 months — upgrading the equipment in the existing centers to give us more capacity and more efficiency within the same footprint, so we don’t have to go out and get more space, just get more efficiency and more productivity out of the same space.”