To the dismay of many Wood’s Powr-Grip customers, our company is currently experiencing a surge in equipment sales which, teamed with other factors, has increased our lead times more than we would like. So far, everyone has been very patient and understanding about having to wait a little longer to receive their equipment, and for that we are very grateful. In the mean time, we have taken many steps to overcome this challenge, and would like to explain these steps in more detail to keep our customers informed about how Wood’s Powr-Grip is getting over this obstacle.

First, we feel we need to expand on our explanation of the reasons our lead times have increased, so you can fully understand our actions in getting them back to normal. Right now there are four factors that are causing most of our problems:

Two of the four factors are due to shortages. On top of raw material shortages Wood’s has been facing, there is also a shortage of labor. For most of 2007, Montana was ranked as having the 4th lowest unemployment rate of any state in the country at 2.8%. Here in the Billings area, it hovered right around 2% for most of the year.

The other two factors are related in that, as the vacuum lifter market saw more demand, Wood’s Powr-Grip had a few very untimely setbacks. Some recent special design projects took longer than scheduled and put us behind in a couple areas. One of our engineers was gone on military leave for six months of the year, which contributed to the backlog in this area. This couldn’t have come at a worse time, as demand for vacuum lifters from all markets is increasing, and the demand in the U.S. is stronger than ever. Plus, the economies in Europe seem to be on an upswing; and with the lower value of the dollar, our equipment is priced more competitively in these markets than it was in the past.

In response to these factors, Wood’s Powr-Grip is currently implementing both short-term and long-term solutions. Our short-term solutions are temporary, but we are confident they will have a positive impact on our lead times. Here is what we are doing immediately to serve our customers better:

• We have started farming out some machining jobs to local machine shops, rather than doing them in house, as we normally would. We have also farmed out some painting operations that we normally do in house. This will increase our costs, but we are hoping it is a temporary arrangement and we will be able to pull all of these operations back in house once we have enough personnel to keep up with the increased demand we are experiencing.
• We have pulled all the labor we can out of the maintenance department and the R&D department and have them working in production.
• We have reassigned some people who normally work in hand cup fabrication to work in equipment fabrication.
• We are allowing people in the bottle-necked areas to work as much overtime as they are willing to work.
• We are being more selective about what special design projects we are willing to take on.

Our short term solutions have already proven to be beneficial, but we want more. Wood’s Powr-Grip is hoping that our long-term solutions will not only resolve the current problem but will also help our company to serve customers better in the future. These solutions are:

• To help eliminate material shortages, we are evaluating our order planning information and updating it to current demand levels. As another remedy, we have a new person training in our Purchasing Department. Her main focus right now is to stay on top of suppliers, to make sure we are getting the parts we need on time, and to identify material shortages early enough so we can arrange for expedited delivery or look for alternative sources.
• We are also working to combat the labor shortage we are experiencing. Over the course of 2007, we hired a total of 27 new people. Although not all of these are full-time employees and some were replacements to account for normal turnover, we are continually increasing our staff to meet the needs of our customers.
• We have hired three additional people to assemble equipment, two new welders, and we’re looking for more. Unfortunately, even experienced welders have to go through our internal training program for weld inspection and weld certification. During this time they are not very productive for us, because until they are certified, they can only work on nonstructural welds.
• We have also hired one additional machinist and are searching for one more.
• We have implemented an automated vertical storage system in the equipment assembly area to free up space for three or four more workstations.
• To eliminate delays in special design projects, we have four engineers in our product support area, where special designs are developed, and two engineers in our new product development area. We are hoping to add two new engineers in 2008—one in each area.  We have already added one person in engineering for clerical support.

This is our outline for reducing lead times on our vacuum lifters and the resulting frustration this causes. We are confident it will be successful, thanks to prior experience in dealing with comparable growing pains. Four or five years ago, Wood’s Powr-Grip went through a similar growth spurt with our hand cups, resulting in an increase in lead times. We have corrected that situation and we are confident that we will be able to do the same with our equipment products. Until then, Wood’s Powr-Grip appreciates your patience; and we assure you that the situation will improve over the course of the next couple of months.

Jessica Smith is a Staff Writer on the Wood’s Powr-Grip Marketing team. She is responsible for editing, researching and writing articles for Wood's Powr-Grip's many instructions, publications and newsletters.