It only takes one word to describe what's happening at St. Charles, Ill.-based Colony Inc.: increase. An increase in its customer base, an increase in work for existing customers, an increase in the size of its facilities, an increase in its pieces of major machinery and, not surprisingly, an increase in its bottom line. Colony Inc. jumped from $78.5 million in revenues in 2005 to nearly $98 million in 2006, and it is projecting revenues to be in the $110 million range for 2007.
Of course, none of this is happening by accident. According to Jerry Zich, president, Colony's success is the result of a number of carefully planned steps that are showing a significant payoff.
Colony has worked to maintain a blue chip clientele for some time. Bed, Bath & Beyond is just the most recent high-profile business to sign on with Colony. Other clients include Kohl's, Target, Lowe's and Home Depot, among others
However, Zich is quick to point out that getting accounts is one thing; keeping and growing them is another. "We've been doing business with Home Depot since they were a 28-store chain, and we've done business with Lowe's for a number of years," Zich says. "So if we've grown internally and they've given us more and more business every year, it's because we've earned the right to do that. And that takes time.
Zich points to a recent facility expansion as being a key to Colony's current success.
"One of the important things we did was open our facility in Elgin, Ill., in 2005. We're 550,000 square feet under roof now. We have 65 full dock doors. We have a larger capacity for shipping and receiving than we've ever had in the past. We can do enormous roll-outs in less time."
With its recent expansion, Zich notes that the company can now field a wide range of job capacities. "We are able to handle a heavy, heavy flow of work," he says.
With expansion has come additional machinery, which Zich also credits for the company's success, as the machinery allows more work to be done faster and more efficiently. Colony's most recent purchase was a Biesse 20-foot dual station machining center. At the time of the purchase, Colony had three Komo CNC routers online. Since the purchase, Zich says that the company's capacity has gone up 40 percent. At the same time, the overhead required for the Biesse dropped by 50 percent.
In addition, the company is currently working with Shaw-Almex on purchasing a new 660 x 140 inch membrane press. "Colony was always a metal manufacturer," Zich says. "Now we're also doing wood in house, we're doing plastic in house and we're looking forward to doing vacuum forming and membrane press work in house."
Despite Colony's success, Zich points out that there have been challenges. One challenge is when retailers use reverse online auctions. A reverse online auction is a fixed-duration online event where there is one buyer, but multiple suppliers compete for the buyer's business. Supplier profits shrink as a result, especially if one supplier is desperate for business.
Another challenge is imports, particularly from China. On one hand, Zich notes that import costs have been rising, which lessens the threat of direct competition. On the other hand, many manufacturers including Colony use Chinese-made components that sometimes end up being questionable in quality. "There are risks in doing business with China," Zich says. "And the number one risk is, you don't know what you're going to get until you crack open that container."
More sales ahead
Zich expects to see an increase in 2007 sales. "We're guardedly optimistic, but we're hoping that we can break the $110 million mark," he says.
Further, Zich clearly doesn't anticipate a slowdown anytime soon. "One of the things that we do is we get the product out the door on time, and we get it out right the first time. If I'm doing what I'm supposed to be doing, when I'm supposed to be doing it, for a cost that is competitive, there's absolutely no reason why people shouldn't do business with me," Zich says. "To keep it simple, we just don't make enemies, we win friends."
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