The recession has taken obvious tolls on most businesses, but many companies are incurring additional pains from opportunities lost because they are fearful to upgrade their technologies, according to global business consultant Charles Wickens.
“We continue to see a lack of confidence relative to where the next turn in the recession is going to take us, and so naturally we are going to see hesitation in investing into technology,” Wickens said. “We can’t lose sight of the fact that the main reasons companies choose to make investments in technology are to be more competitive and to be more productive. As confidence continues to build, those key criteria based around technology investment will still be the hallmark for why people do it.”
Despite the recession, some companies in southeastern Wisconsin have made decisions to invest in technology in the hopes that it will help spur opportunity and add value to their businesses.
Milwaukee-based KabelTrax LLC, a member of the KabelSchlepp group whose parent company is based in Germany, has created an entirely automated system of machines that works to eliminate waste in multiple areas and controls and measures costs to ensure profits.
“We have essentially eliminated any process that we could that would require humans to do something where there could be errors or redundancy,” said Stephen Achs, president and chief executive officer. “We’ve continued to make more and more things automated as we go along, including our predictive maintenance and quality program checks.”
KabelTrax designs cable carriers for high-volume customers with complex parts and a need for flexible supply volumes. The company supplies products to manufacturers of automated banking and ticketing machines, as well as construction, truck and automotive clients such as Ford, Honda, Hyundai, Fiat, and Siemens.
According to Achs, automating the entire manufacturing process, from the beginning to boxing up the end product, has enabled the company to eliminate wastes in time, money and materials.
The company is focused on increasing quality and productivity through automation, rather than manual labor, Achs said.
“We realized that (KabelSchlepp) was probably making 10 to 20 percent of our products in the U.S. and the rest was controlled by too many outside factors,” Achs said. “Are they going to give us the best deal? Most of the time, yes. Are they going to have what we need? Most of the time, yes. Are they going to give us a quality product? Most of the time, yes. We realized that we can’t be the best ‘most of the time,’ and that’s what initiated what we did (with KabelTrax). We wanted to have direct control over our destiny.”
Achs said he was initially met with resistance when he decided to automate the company’s processes.
“Almost everyone was like, ‘Don’t do it, you have no idea what you are getting yourself into,’ and, ‘It’s not going to work,’ and all of these negatives,” Achs said. “I looked at it from the perspective that there was no way we could do what we wanted to do without changing our business model. We would never be able to satisfy our current markets without setting up new manufacturing models.”
KabelTrax maintains and updates its equipment to remain state-of-the-art and continues to be “extremely profitable,” Achs said, even throughout a tough economic market that has not been friendly to the automotive industry.
Another emerging trend as companies claw their way out of the recession involves technology initiatives centered around a green focus, including energy consumption and sustainability, Wickens said.
“I think we will see significant growth in these areas, as businesses start to look at sustainability as a way to save money and create more efficient business processes,” Wickens said.
Milwaukee-based architectural firm Engberg Anderson Design Partnership Inc. specializes in designing environmentally friendly LEED certified buildings for its clients, but the firm also has experienced the benefits first-hand by creating a LEED gold certified space for its new location in Milwaukee’s Historic Third Ward.
“We had been looking at moving into a new space and decided as a staff early on that we couldn’t really ask our clients to look at some of these opportunities if we hadn’t experienced them ourselves,” said Mark Ernst, a partner at the firm.
In addition to implementing basic green techniques such as installing Energy Star-rated appliances, using china instead of disposable dishware and installing a water filter instead of using bottled water, Engberg Anderson also installed a few technical processes that will save the company money and has already improved employee morale, Ernst said.
“Everything in here is pretty much state-of-the-art and energy efficient,” said Shaun Kelly, a LEED-accredited professional and a member of Engberg Anderson’s Green Group. Kelly was a member of the team that designed the firm’s new space.
“It was definitely challenging, but I think we came up with a space that everyone can be proud of,” he said.
The space was large enough to enable the company to install a raised floor to allow space for the HVAC system underneath. The office also is equipped with a special lighting control system that automatically adjusts to the amount of day light in the room to save on energy consumption.
“The HVAC system beneath the floor allows for an increase in efficiency and controllability,” Kelly said.
The system also made it easy for the company to include an air vent in each individual cubicle.
The office features water-efficient, dual-flush toilets and low-flow faucets, a water purification system and a bike storage facility with a changing room for riders.
“There are many factors we would have to look at in order to determine the amount of money we are saving,” Ernst said. “In our old office, we didn’t have our own restrooms, and this space is about 3,000 square feet bigger than we used to have. But even despite the monetary value we are getting, our communication has improved and the comfort level in the office is completely different.”
Like many other companies, Engberg Anderson has taken advantage of video conferencing and telecommunication technologies to keep in touch with its other offices in Madison and in Tuscon, Ariz.
Wisconsin-based McClone Insurance Group also had difficulties communicating between its four locations in Wisconsin, so the company recently upgraded its telecommunication system to save time and money.
“When I came to the company a year and a half ago, we had a pretty archaic phone system,” said chief financial officer Eric Brenn. “We have four offices in Wisconsin, Menasha, Oshkosh, Fond du Lac and Milwaukee, and we previously had four different voice mail systems, four different receptionists, and we had to call long distance to reach any of our other offices from Menasha.”
According to Brenn, the company was wasting large amounts of money on long distance calls, and their customer service was suffering because they didn’t have office-to-office transfer capabilities.
“We weren’t even able to transfer calls from one office to the other. We’d get a call in Menasha that an agent in Milwaukee would need to take care of, and we’d have to ask the customer to call a different number or have our agent call them back. It just wasn’t convenient,” Brenn said.
Shortly after Brenn was hired as the company’s CFO, he began looking at the possibility of switching to a voice-over-Internet-protocol (VOIP) system. The costs associated with that switch would have been between $80,000 and $100,000, just in capital, he said.
“On top of that, there was an increased fee for operational costs and monthly charges,” Brenn said. “We made the decision that it was too expensive and wasn’t worth it for us at the moment.”
In May of 2008, the company switched over to TDS Telecom and integrated the phones between the four locations.
Three months later, McClone was offered the chance to switch to a new product – a managed IP system that was similar to VOIP, but TDS would house all of the equipment, Brenn said.
“We decided to go that route. We are now completely integrated, and our phone costs stay at a flat rate. I consider it VOIP without paying for it,” Brenn said.
The company has been able to increase their customer service satisfaction by being able to easily transfer calls and voice mails between offices, Brenn said.
“We have also been able to eliminate redundancy by having only one receptionist in the Menasha office doing the job of the previous four,” he said. “The managed IP software allows all calls to be forwarded through Menasha. She can use the computer to see who is or isn’t on the phone and drag the call to their line. It puts us a little more on the cutting edge and at the same time saves us time and money.”
According to Brenn, the switch to upgraded phone technology also has made the company more productive. Even though the system cost the company some money upfront, according to Brenn, the focus was on how the system will benefit the company in the future.
“What we found out was that we had the headquarters in Menasha, at the largest location, and that the outlying offices definitely felt like outlying offices,” he said. “They didn’t feel like part of the company. We didn’t want that, and so with this new system we are all easily connected and are much more capable of working as one cohesive unit.”