How to transform a metal fabrication business in 90 days

Nov 20, 2023

In 2022, Rich Ballenger (left) and Erik Thompson bought a metal fabrication company in Cudahy, Wis., a short distance from where they used to work at Lucas Milhaupt, a manufacturer of brazing process and metal joining materials. They wasted no time in trying to reinvent the company, embarking on a 90-day journey that changed almost everything about the place.

When Rich Ballenger and Erik Thompson teamed with an equity investor and acquired CR Industries Inc., a longtime metal fabricating shop in Cudahy, Wis., last August, they put themselves on the clock.

"We were very intentional. We created a 90-day business transformation plan," Ballenger said.

"The elements of the plan were quite fundamental, actually. But they weren't going to be easy to implement," Thompson said. "The key was we wanted to hold ourselves accountable for the results. Our urgency is self-imposed."

Ballenger and Thompson believed the company had come as far it could with a family ownership structure, and they set out to transform the firm into a full-service metal design and fabricating shop with welding, powder coating, and packaging capabilities. The new owners, who both worked for nearby Lucas Milhaupt, a manufacturer of brazing process and metal joining materials, had acquired the company from the Weisflog family, led by Clarence Weisflog, who had founded the company in 1985.

Ballenger and Thompson both have the pedigrees to transform a business. Ballenger achieved an MBA from the Harvard Business School and a bachelor's degree in chemical engineering from the University of Wisconsin in Madison. Thompson, a Pennsylvania native who served in the U.S. military, earned an MBA from Carnegie Mellon University's Tepper School of Business and a bachelor's degree in criminal justice and psychology from Dakota Wesleyan University.

With the acquisition, they changed the company's name to CR Industries LLC. The company, near Milwaukee's General Mitchell International Airport, has about 45 employees.

The new owners invested more than $300,000 in the plant. A significant chunk of that investment was dedicated to giving a facelift to the fronts of the plant's two main buildings. The original facades were tired and dated.

"It's been said that you only get one chance to make a first impression. We want our first impression to be positive," Ballenger said. "You might not think that would be so important in the metal fabrication industry, but we want to give ourselves every competitive advantage we can."

The front offices were upgraded with new paint, flooring, workstations, and lighting.

The shop floor was cluttered, disorganized, and dirty. To remedy that, they removed debris, invested in better lighting, and improved the appearance, cleanliness, and functionality of the shop floor. Simultaneously, roof leaks and gutter problems, which sometimes created 3 in. of standing water on the production floor, were fixed.

"We took advantage of the shop space vertically. We invested in assets to increase productivity, and we put wheels on everything," Ballenger said.

"We needed to invest in the right hand tools and the right ergonomic lifts. In addition to impressing customers and prospects, the improvements gave our staff more pride in their workplace," Thompson said.

Workplace safety became an upgraded priority, further enhancing the workplace culture. The company also deployed the 5S methodology, a practice that is derived from Japanese continuous improvement activities and is dedicated to producing a clean, uncluttered, and well-organized work area, which then enables individuals to go about their tasks more efficiently. (Sort, straighten, shine, standardize, and sustain make up 5S.)

"Lean manufacturing always is one of our North Stars. We need to be intentional and accountable in every facet of our execution," Ballenger said.

The owners also replaced and upgraded the plant's entire information technology framework. They updated the plant's enterprise resource planning system, which would help front office staff to better manage shop floor scheduling, inventory, sales, marketing, finance, and human resources activities.

In addition to that, the owners leaned on some in-house development resources and some commercially available software to create a "technology stack" that helps the company turn around competitive customer quotes in a matter of minutes instead of days. The system also pushes production programs directly to the equipment, significantly reducing the need for human intervention.

They also invested in public-facing improvements, including the creation of a new company logo, an upgraded website, and branded boxes and packaging.

To execute the transformation, Ballenger and Thompson engaged the staff to work on multiple Saturdays. Both described the work as extremely hard, physical, down-and-dirty labor.

"As business owners, we always want to move faster, but the work the team has done here is nothing short of spectacular," Ballenger said. "We need to embrace it. We need to remove the complexity of end-to-end, small-lot manufacturing. There was no way we were going to grow by leaving everything status quo."

Along the way, the staff also has reaped rewards from the higher aspirations. They have seen pay increases and bonuses, received an extra week of vacation, enjoyed health care coverage improvements, and started receiving company contributions to their 401(k) accounts.

Customers and prospects also are taking notice of the transformed company.

"We were two months behind [in deliveries] to our largest customer, and we are now working a full week ahead and have inventory to where we are shipping some orders in two days," Ballenger said.

The improved efficiencies enabled the company to eliminate its third shift of labor without cutting any jobs.

Ballenger and Thompson take pride in the minimal amount of staff turnover since the ownership change. In fact, they have promoted some employees from jobs on the shop floor to positions in the front office.

"We think it's important to give our people paths to improve and expand their capabilities at the company. We want them to feel that their success is tied to our success as an organization," Ballenger said. "We want a business culture that says, ‘If you do more, you’re going to get more, and you’re going to know more.’ This company will be professionally run. We’re very optimistic about its potential for growth."

CR Industries has not yet arrived at its destination after that 90-day plan, but the journey continues. Ballenger and Thompson already are creating the outline for their next stage of business transformation.

"We want to serve our key constituents—our customers, our vendors and partners, and our employees," Ballenger said. "The next phase is to separate ourselves from other metal fabrication shops."