On paper -- and it is on paper, not on computer -- the system he worked out is simplicity itself.
A salesperson takes an order, say for a 12-head gravity filler, and fills out a detailed production form specifying exactly what the machine is to look like and when it is to be delivered. (Though most of ELF's products are standard models, each one has to be customized for specific applications.) If there's anything unusual about the job, the form goes to Charlie Kuchar in engineering for a few quick drawings. If not, it goes straight into the factory.
There, number-two son Greg Ake, vice-president in charge of production and distribution, will get a copy. So will the supervisors of any department that's involved -- fillers, cappers, electrical, whatever. Greg Ake and the supervisors will set their priorities by the delivery dates on the forms, making sure that today's order gets built in plenty of time. Since the departments are small (only 3 or 4 workers build the basic filler apparatus, for example, while another 4 work in electrical), both workers and supervisors can keep tabs on parts supplies. When they run low they order new ones from the company's 10-person machine shop or from number-three son Brad Ake's purchasing office. In a few days the job will be assigned to an installer, says Gene Tuholski, who will oversee the staging crew responsible for final assembly and testing. Then Tuholski will take the machine to the customer's plant and set it up.
Driving this carefully choreographed performance is a massive incentive: as a matter of policy, ELF doesn't get paid a nickel until the machinery is up and running in the customer's factory. "It's a little noose we hang around our neck," explains Jim Ake. "We say, You give us a purchase order and we'll have the equipment to you in 10 days. If you don't like it -- if it doesn't do exactly what we say it will do -- you don't pay for it." Back home, that noose focuses everyone's mind: both the salesperson and the installer, who are paid on commission, get their money only after the job is complete. So someone has a personal interest in ushering every job out the door.
To be sure, 10 days isn't etched in granite: some customers don't want quick delivery, and ELF is occasionally late. But it's symbolic of a companywide commitment to doing things fast. Salespeople's quotes go out the same day they're requested. If a customer needs a part right away, it's air-freighted out. One day last January, when the factory was a little quieter than usual, salesperson Dave Scarborough asked installation supervisor Kenny Hyde if the order he'd just taken could possibly go out the following Tuesday, only 3 working days away. Skipping some of the customary routines, Hyde had the machine built and ready for testing in 24 hours. Without having to ask, he knew that was what Jim Ake would have wanted him to do.
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The trouble with most accounts of speed-oriented companies is that they make it sound so simple. Motorola, reports Fortune, cut the time required to build and ship electronic pagers from three weeks to two hours. How did Motorola do it? "We hold to schedule as a religion," explains the director of manufacturing. Right. Like most religions, speed has a lot of believers and few saints. You can't help wondering what worldly demons Motorola had to wrestle before reaching the promised land.
For ELF, building a company around speed has been a difficult, expensive process, and some of the demons haven't yet been bested. Marketing had to be reinvented. Employees have had to be hired and managed in different ways. Money -- lots of money -- has been spent on matters related to speed; indeed, ELF's financials provide an object lesson in the constraints as well as the payoffs of a fast-paced operation.
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Marketing. Visit most custom manufacturers and they'll boast about their backlog. Six months? A year? The longer the better; a backlog represents a cushion of security. ELF, with its speedy turnaround, has essentially none. "If nobody orders anything in the next 10 days, we're out of business," says Ake, exaggerating only a little.
With no backlog, ELF has to pour resources into making sure those new orders come in. Last year the company advertised in 18 trade magazines a month (annual cost: $140,000). It sent sizable delegations to 13 trade shows, each one costing at least $30,000 out of pocket. Leads from all these sources are put on computer and fed to the company's 15 salespeople. Most salespeople work in pairs: one on the road for a week, the partner home fielding calls and lining up appointments for the following week.
And oh, that roadwork. Right from the beginning Ake liked to take along working models of his fillers -- the models just got a little more elaborate as time went on. Today, ELF reps pull up to a prospect's plant in a truck equipped with operative filling, capping, and labeling lines. At showtime, boasts Jeff Ake, "We won't just have the purchasing guy, we'll have the president, the foreman, and the maintenance man out watching the demonstration, too." The live performances are brutally expensive: each truck costs about $80,000 to buy and equip, and the company currently has eight of them, including two in Europe. But they do have the desired effect. "We were able to operate [the equipment] ourselves and see that it was right for us," says new customer Bob O'Brien of Sunburst Products Inc., a maker of soaps and degreasers. "That was very important."
