Superior Controls President, Life Sciences Rick Pierro and Vice President of Engineering Bob Patrick were featured in a CSIA webinar to discuss how companies in the manufacturing automation industry can prepare their businesses now and be ready to take full advantage of the coming economic rebound.
Control System Integrators Association (CSIA) is a not-for-profit, global trade association that seeks to advance the industry of control system integration. Control system integrators use their engineering, technical and business skills to help manufacturers and others automate their industrial equipment and systems. CSIA helps members improve their business skills, provides a forum to share industry expertise and promotes the benefits of hiring CSIA members and certified control system integrators. CSIA has over 500 member companies in 35 countries.
Like other small businesses, Superior Controls has had good times and bad times with the economy throughout the company’s 30+ year history. President Rick Pierro recalls, “This reminds me of 2008-2009. We are here today to talk about what we learned personally in 2008-2009 and what we found is that the things we did back then made our company much stronger for the long run. There are a number of projects that we implemented – in-house projects that made us much stronger, more resilient, and frankly much more profitable.”
Rick and Vice President of Engineering Bob Patrick take a head-on approach to dealing with business slowdowns. The question they urge business owners to ask themselves is, With business slowing down now, are there projects you can implement right now that will make you stronger in the long run?
Before embarking on in-house projects, it is important to gather all the details about the current workload. Rick advises, “Take a look at all your projects to determine what is your real available, unbillable engineering staff – how many people are truly unbillable and will be unbillable for the next few weeks or months?” Next, conduct a detailed review and determine the number of hours and duration of the proposed in-house projects. “You certainly don’t want people working on in-house projects if they could be billable in a time like this. At the same time, look at future change orders, what’s happening with these projects. Startups, schedules, things of that sort, and review anticipated orders over the next six weeks. Finally, reach out to all your good customers and find out what they have coming up in the next few weeks. If at the end of that assessment, you determine that you have four or five engineers that may be available, then it makes sense to start looking at in-house projects.”
With regard to work on current projects Bob adds, “Engineers are following your process and are waiting for approvals before proceeding to the next step. In situations like this, you may want to look at this as a way to have folks be moving forward on a project, even if you don’t have an approval in place, if you feel comfortable. Understanding, of course, that there is risk associated with that, there may be some rework. But the alternative of not having any project work, that may be beneficial for you.”
When the inevitable project delays occur, Bob advises, “Some of the holdups with projects are related to sites being either closed or partially open – they are only allowing a small number of individuals on site. These are areas where you need to think out of the box.” To solve the problem of closed or partially closed customer sites, a Superior Controls project team recently conducted a video conference with the customer at the installation facility, where the team was able to execute a site acceptance test (SAT) with a validation engineer and the Superior Controls engineer working from home.
Consider How to Proceed
“We have some choices when things slow down like this, and it really depends on cash flow and how strong the position your company is in financially,” Rick said. To control payroll expenses during these times, he offers options such as taking vacation time, floating sick days or floating holidays. “There might be voluntary time off without pay, there might be furloughs. We’re seeing a lot of companies out there having furloughs for a period of time with unbillable people, and having them apply for unemployment. It’s very important if you are looking at this to follow the state laws and work with your human resource department if you have one to make sure you are in compliance with what the rules are for your particular state. As a last, most drastic measure, layoffs.”
If there are enough financial resources to keep people on staff, Rick recommends conducting an assessment to determine what types of in-house projects will provide the most value. “Real value,” Rick adds. “We have gone through the sale of our company twice in the past five years, and we built a system; it really got going in 2008-2009. We call it SC Navigator. It’s a repository of all our information about running the business. We found this to provide real value to our company. When we sold our company, it was valued at a very high price [with SC Navigator] as a part of the company. This not only helps you run more efficiently, helps you run more profitably, but provides value to our company.”