For Custom Source Woodworking, Inc. the path to success has not always been straight. The Olympia, Wash., company, founded in 2007 by Jim Mammina and Joe Wadsworth, has had to modify and change its strategy to deal with the economic downturn and changes in the marketplace.

“In 2008, we were selling our products for 25 to 30 percent more than we are today,” says Mammina, CSW president. “Once the crash hit we were forced to drop our prices considerably. We had to bid 20 jobs to get one and we were bidding anything that moved.”

“We took a hard look at what we were doing at the end of 2009 and decided we couldn’t continue to operate that way. While we could absorb about 25 percent of that 30 percent cost reduction due to improved efficiencies, bidding this work forced us to work with people we hadn’t done business with before. So we made the decision to change our operations and find new market channels.”

CSW manufactures both wood and high-pressure laminate and wood casework, standing and running trim, doors, windows, countertops and fixtures. Customers include large restaurant chains, select general contractors, store fixture manufacturers, and brokers.

 

Four-point plan

CSW developed a four-point plan. First, “We started focusing on a few select general contractors that we really enjoyed working for, had a good relationship with, and who cared about getting us paid on time because they wanted us to produce the next project for them,” Mammina says.

“We also made the decision to stay away from public works projects. It takes up to two years to get final payment on some of these projects, and they very competitively bid.”

That is to say, CSW does not do public work projects unless it is not directly with the general contractor. This is the second part of the plan.

“We made a decision to stay away from public works projects unless we worked through a third party like ISEC,” Mammina says. “ISEC is a large interior contractor that estimates, project manages and installs the job. They become the people who deal with the GC and owners and they also handle any money issues. We usually receive our payments within 30 days of delivery.”

The third item is going owner direct to large restaurant chains. “This work has become about 80 percent of what we do,” Mammina says. “We always perform quickly, we install our product, we finish well, and they turn over their stores on time. We work with the actual owner, we don’t work with the franchisee. The restaurant owners buyout the carpet, lighting, and millwork.”

The fourth channel was to start a millwork company. Custom Source Millwork, Inc. produces standing and running trim and moulding, and sells the product to Custom Source Woodworking as well as many of the lumber suppliers in the area. New companies for finishing and installation—Custom Source Finishing and Custom Source Installation, respectively—have also been formed.

When CSW began, Mammina and Wadsworth went to other woodworking companies, asked to produce their custom work, reception stations, and similar work. They realized early that once business slowed down, these companies were not going to sub out any work, so Mammina started making contact with the general contractors. Old-line companies had to lower prices and get more efficient. Mammina estimates that as a result, more than 30 competitors went out of business in the Pacific Northwest.

Currently, things are looking up. “We’re in a better position than a lot of people,” Mammina says. “We’re getting requests for bids all the time. I’m to the point where I’m being selective, and sometimes I even ask how many people are bidding on the job. I’m not going to bid against seven people. It costs a woodworking firm about a thousand dollars to bid on a typical project.

“It used to be good if you won 10 percent of your bids. If you got more than 10 percent you were probably selling it for too cheap. Now, it’s probably closer to 1 to 2 percent. That means we have to bid one hundred projects to get two jobs.

“And we still see those guys who are taking jobs and we shake our head and say, ‘I don’t see how they’re doing it. There’s no money there.’ Many companies have closed, but there is still more manufacturing capacity than demand.”

 

Open 24 hours a day

Joe Wadsworth says that CSW operates 24 hours a day, six days a week. There are four different crews, each working three 12-hour shifts. Two crews work from Monday to Wednesday, and two crews work Thursday to Saturday. Equipment maintenance can be done Sunday, if needed. This work schedule helps reduce overtime. At first there was some resistance, Wadsworth says, but now, the employees don’t want to go back to a regular schedule.

“We go through a lot of employees,” Mammina says. “We grade them on a scale of 1 to 10. If people aren’t an ‘eight,’ we continue to work with them for at least a month. If they are not getting better, we cut our losses and find someone else. Our employees have to love their work, care about quality, be smart, and stay on task. There is no place to hide here. The other employees won’t let them.”

Each machine has a list of who is allowed to operate that equipment. “They go through a series of training sessions and then they’re tested on that machine. Once they’re qualified, their name goes on that machine as somebody who is officially allowed to operate it,” Wadsworth says. “Somebody who doesn’t have that qualification cannot operate that machine.”

 

Crows Nest and shop

Mammina says that all products are fully engineered in CSW’s office prior to being sent to production. “We have continued to develop our Crows Nest management software, and are now marketing this product to other woodworkers,” he says. “It is a complete information management package that we use through the entire life cycle of projects.”

Estimating and engineering are handled using Keytrix Data Systems, which links with AutoCAD and handles all of CSW’s products, from door frames and trim to casework and reception counters. CSW has also begun using SolidWorks a 3D modeling software package.

Work is engineered to be assembled as easily as possible. “It is sent out of the office in a way that’s understandable and able to be assembled after it’s machined and processed. Since we added SolidWorks we have found that the exploded views help our assemblers understand the assembly instructions even quicker. “
“Crows Nest information management software is used to order all materials for a project,” says Wadsworth. “You can go back and see what a particular release cost us, and all the materials ordered, and you can do a price history check.

“One of the tricks our vendors used was to promise a price but raise it after four weeks. So, 3/4-inchwhite melamine would be $20, and then after four weeks it became $27 again. We unknowingly pay that for six months, then we have an argument on our hands – they say they accidently put us in the wrong price category.

“[So we] lock in the pricing. It’s $20 for ¾-inch melamine. That way the price is on the purchase order. We invoice out of the software as well. All our project management is done out of this system. All contract documents are stored in it. I can access anything about that job. We have job costing for every project.”

 

CNC machining center

Work flow starts at a Busellato Jet 4, a 4 x 10 nested CNC machining center, which Mammina says runs 24 hours a day, six days a week. He is also looking at a new 5 x 12 machine with options such as auto labeling using an inkjet printer, possibly with food dye visible only with UV.

An IMA Advantage 700 edgebander was purchased from a shop that closed (CSW has added a wide variety of machinery through auctions). Mammina says this is the best edgebander he has ever seen operate. CSW had to do some repairs to the machine due to poor maintenance by the original owners on this low-hour machine. IMA-Schelling was of great assistance in completing this work.

“We use it for everything that we band, from prefinished thin wood veneer to 3mm wood veneer and 3mm PVC,” Mammina says. “It has a great corner rounding station, and it has a great system for bringing the color back on the scraped PVC banding. It doesn’t use blowers to do this; it uses a ball bearing system that runs it through. It’s been dynamite. Also, cleanup on parts after edgebanding with the previous bander was at least 10 minutes for each cabinet. That time has been reduced to near zero with the new edgebander.

Also, there is a Cantek P400E three-axis electronic sliding table saw with electronic rip fence and electronic tilt that the operator can enter on a keypad. It can do compound angles and miters, and the operator can control the miter because he is running the material past it, rather than leading the blade through it.”

“Our custom department uses it to make final cuts, miterfolds, and compound angles,” Wadsworth says.
“We also added a Cantek MRS-300 gang rip and CM626 26-inch spiral head planer,” Mammina says. “These are incredible machines and the service from Cantek America has been superior.”

Also in the Olympia shop are Whispurr Dustek dust collectors for all dust collection. It also has a Uhling HP300 case clamp, Streibig vertical panel saw, and a Castle pocket bore machine that drills a straight hole rather than an angle. CSW is also using Mod-eez fasteners with a Dodds machine that cuts a small mortise. Omal HDB 1300 Insert 1300 computer-operator dowel inserter from Delmac is here, and a classic SCM Casadei shaper is used for small run mouldings and general shaping.

The new millwork company has its own space in the building, with a Casadei Libra 40 53-inch, three-head widebelt sander, which has proven invaluable to the production department. Also in the millwork area: a Cantek MRS-300 high speed gang ripsaw, an older Tannewitz resaw, and a Wadkin eight-head heavy-duty moulder that was bought at auction for a fraction of its new price.

Previously, CSW outsourced finishing, but found its employees could produce better quality and reduce lead times by setting up finishing here. CSW is also doing prefinishing of edgebanding and applying it to prefinished panels. The most common species in the restaurants they do are quartered sapele and quartered walnut.

“In this struggling economy, the only thing we can do as a business is hunker down: focus on our core competencies, continue to be efficient as possible and always ask, ‘What can be done to improve?’ That’s our big focus. We can’t raise prices, so we have to cut costs,” Mammina says.

“That means working with our suppliers. They may have a price increase, but I can’t go to my customer and say this will cost more now. Especially when we compete in a national market.”

“We‘re sales driven, which makes us a very high service company,” Wadsworth says. “We’re focused on servicing our main customers, and that sets us apart from typical commercial casework, which is low bid wins. We’ve gotten out of that market and our customers see the value of the high level of service we give them.”

Have something to say? Share your thoughts with us in the comments below.