JP Metals

Source: Retail Digital

Date :23/05/2007 16:40:59

JP Metals: Rushing to Meet Demands

Written & produced by James Buchanan & Nick Ledue

JP Metal America is finding that success in the retail store fixtures industry can be a bit tricky as the company grows to meet ever increasing demand

For JP Metal America of Montreal, Canada, a high-end manufacturer of wood and metal store fixtures, success has brought the need to quickly and dramatically increase capacity while not sacrificing quality in order to adapt to growing demand.

“We have to supply the demand, which is easier said than done, it’s the biggest challenge for us,” says Bobby Ciricillo, VP of sales for JP Metal America. “We must increase our capabilities not by 10 percent, but by 30 or 40 percent over the next few years.”

For some companies, the best means to increase manufacturing capabilities would be through acquiring an existent facility with trained workers already employed there.

However, because JP Metal America markets itself as a quality driven business, company executives are very uncomfortable with the idea of acquiring another company within its industry. For example, says Ciricillo, it may have older equipment and employees that are not trained to use the newest automated machines to the specifications of the company.

For the store fixtures industry, which includes display racks and cases for retail clothing and other products, there are regular and striking advances made to the equipment used to produce the very fancy fixtures found in stores selling Esprit, Tommy Hilfiger, and Polo.

Therefore, JP Metal America’s executives believe it is better to build a new shop with the best and most updated equipment and train new employees in-house to use that equipment to its fullest potential.

“It’s not just older workers that have outdated skills,” says Ciricillo, “because even the kids coming out of college need to have their training updated because the machines they learned on are older and relatively outdated compared to what we are using. The new equipment has outpaced their education.”

Currently the company is working to build out its capacity through increased infrastructure by adding 40,000 sq. ft. to its current manufacturing facility and building a new 270,000 sq. ft. warehouse nearby. Warehousing, which is now done at its manufacturing facility, will move to the new warehouse upon completion.

As to hiring, the company is always looking for new people with advanced woodworking skills, metalworking, welding, polishing, plating and so on. “There is demand in every department,” says Ciricillo.

As the company works to add to its infrastructure, the volume of sales opportunities is growing with its manufacturing capacity. According to Ciricillo, finding new clients and making new sales is not too much of an issue for the company.

“It’s a rather small group of clientele and they tend to know each other,” he says.

Asked if the company’s need to increase capacity to meet existing demand has limited its ability to take on new work, Ciricillo says it is a challenge, but “We will not flat out refuse a new client. We will add them to our list and try and find space for them when there is an availability, but that is limited.”

Finding new capacity or increasing efficiency can add a premium to the company’s financial picture even as it seeks to add onto its existing facility and build another. This is where updated automated equipment plays a key role in the company’s ability to produce more products for more clients.

“Every year there is new machinery coming out that has more capabilities to produce more intricate products with a higher degree of speed and efficiency,” says Ciricillo. “For example, there are routers that can be programmed to do a number of jobs in a set order with a variety of intricate detail. All we have to do is preset, or program, the work into the computer, so the process is automated.”

In the past, he adds, when a client reordered a product an employee would have to find the template that had been used, bring it to the shop, set it up and add any modifications, which was a labor intensive process. If it was a new order, a form would have to be created, which again takes time and technical skill.

Now though, the company can use a virtual form (template) stored in a database, make modifications on the computer and program the job into the router.

“It’s a lot like the computer business where you buy a laptop and a few years later it is nearly obsolete,” Ciricillo says, “two years later these machines we use have become outdated. The lasers we bought last year are three times faster than the ones we bought in 2000, so one laser can now do three times the work of a seven year old machine.”

Automation and keeping up with new technologies is also critical to remaining competitive in a global economy, he adds. In China and other countries labor costs are far below those in the US and Canada, making the products in those countries less expensive. Therefore, JP Metals has to produce a much higher quality product as inexpensively as possible, which requires very efficient machinery with multiple capabilities.

The need for timeliness and efficiency extends to the company’s supply chain. JP Metal America has been in the business for 40 years, says Ciricillo, and it still uses many of the same suppliers. The company likes to stick with what works.

However, prices for materials have gone up in the last few years as international demand for them has increased. For example, nickel has gone up by 100 percent over the past few years and stainless steel has gone up 30 percent.

The company is also constantly expanding the materials it builds its products from. Most recently that includes glass, acrylics, and a variety of wood products. The company also uses a host of different metals such as chrome, brass, stainless steel, and plated and powder finishes.

“We started as a metal company making tubular structures; basically whatever work the founder, Joseph Paventi (the “JP” of JP Metal America), could get at the time,” says Ciricillo. “Then the company brought in some machinery and started doing plating, which eventually led to producing the store fixtures that we do now using a variety of materials.”

Therefore, with so much material coming in the door and so much product going out the door, managing the cost of supply and delivery is quite important.

On the materials side, Ciricillo says the company seeks strategic timing of purchasing. For example, the company will lock in a price for its supply of heating oil for the winter during the summer when prices tend to be lower. Much of the metal the company uses also is used for building. During the winter when the building trades are somewhat slack and materials costs are lower the company will purchase in bulk. Also wood and sheet metal come in standard sizes and forms so the company is able to follow prices and by when they are low.

“Clients usually will know that they will be adding a certain number of stores or will need to support new or increased product lines in the upcoming year and will let us know what their needs will be so we can go and book materials at the best price for them,” says Ciricillo.

On the product side, JP Metal America has an internal fleet of trucks to move materials and product from one site to another, but primarily relies on logistics brokers to deliver products. Also some clients they sell to, such as Kohl’s, will send their own trucks to pick up products.

“We just make sure the product is at the door and ready to go,” says Ciricillo.