Cabinets shows growth despite economy
Pacific Cabinets was recently awarded the Providence Office Park project in Portland, Oregon. The contract is for a three story Medical Laboratory Office Building worth approximately $600,000. The Company is currently producing and installing a 2 million dollar cabinet project for Central Washington Hospital in Wenatchee. PCI had previously contracted with Group Health Hospital on the Bellevue Medical Center and was awarded the Wenatchee project because of the service and quality provided at Bellevue. St Luke’s Hospital in Twin Falls and Boise has 3.6 million contracted with PCI for the same reason. The production capacity and ability to obtain bonding helped the company land the 3.4 million Coeur D’Alene Casino project in Worley, Idaho.
Owner, Steve Frei, gives credit for these successes to his employees. In 2009, the Department Managers were asked “how do we become more competitive”? PCI’s Estimating Manager determined through bid analysis that costs would need to be reduced by 15% to reach their contract goals. Considering on average cabinet manufacturers in America net less than 5%, cutting 15% seemed impossible. Everything from staff reassignment, to savings on waste disposal was researched. There was no stone left unturned. PCI convinced major vendors to participate in this endeavor by offering an additional 2% early pay discount on invoices. The Accountant even participated. PCI knew it had to reduce costs to survive.
Frei states the greatest savings have come from the crew of Pacific Cabinets themselves. For an example, Frei said two of the production workers took it upon themselves to combine multiple work orders to increase the efficiency of the panel saw. That example of initiative was exactly what PCI needed to be competitive and to survive this economy.
By implementing their suggestions for improvement, PCI reduced labor costs by more than 25% and overall costs by more than 15%. That kind of dedication has allowed Pacific Cabinets to enjoy record sales and profits for 2010, during what Frei considers the toughest economy since the company formed in 1979.
Frei has no fantasies the economy is going to get better anytime soon. In fact, he believes it will get worse before it gets better. Only the most organized companies will survive.
“This experience opened our eyes to realize that our best opportunities lie with getting everyone involved. We are looking forward to the challenges in 2011 knowing that we have a dedicated team that has survived the worst economy since the great depression.”