"Here's a perfect example of how we operate!" he exclaimed. "Today's Friday, right? Well, we just got an order for a slide-track filler in Portland, Oregon. We've got an installer in Seattle right now. If we can get the filler built this afternoon and tomorrow, then ship it air freight, he can install it Monday.
"He'll get an extra week's pay for spending the weekend on the road -- that's our policy -- so our margins will be shrunk a little. But it can be done. And it's an example of how fast we can get $12,400 transferred from a customer's bank account to our own."
Seated in Ake's office were half a dozen key people, grinning and agreeing that, yup, it could be done. If you had checked with the customer a few days later, you'd have found that, yup, it was done.
Systems, in this company, will come and go for a while. Never mind: with an attitude like that, it will be hard for ELF not to continue its remarkable growth. Six or eight managers, in an $11-million company, smiling on a Friday afternoon because they had the opportunity to work late that day or come in the next, and all because they could get an order into a customer's hands a few days quicker than usual.
Frankly, it wasn't normal. Except, perhaps, in a company where speed is truly of the essence.
* * *
Research assistance was provided by Lisa D. Royal and Anne Murphy.
RUNNING FAST
How speed of delivery shapes a company
Everex Systems Inc., a $377-million manufacturer of personal computers and peripherals, boasts that it will ship orders within 48 hours. Steadi-Systems Inc., a $5.3-million distributor of motion-picture film and supplies, provides round-the-clock emergency film delivery -- one day to anywhere in the United States. Tarason Labels Inc., a $3.5-million maker of custom labels for garment and hosiery manufacturers, cuts its industry's usual turnaround time by half.
Like Electronic Liquid Fillers Inc., these companies get their jobs done fast -- and occupy a distinctive niche in the marketplace because of it. But speed of delivery is a powerful tonic: don't give your company a dose unless you're prepared to reshape your company around the new strategy. Among the lessons:
* Marketing. There's no point in being fast unless you stake your reputation on it -- and tell the world so. So forget everything else that's great about your product or service and focus on how fast you can get it in the customer's hands. "Zero-response time is the centerpiece of our marketing and operations," says John K. Lee, executive vice-president of Everex, using his company's catchphrase for fast turnaround. "That's how we present ourselves to the world." For Steadi-Systems, the emergency film service isn't a big money-maker, but it's a make-or-break marketing point. "Ten times a week we get [emergency] calls," says CEO Richard Schoenberg. "That's 520 times a year someone's being served when they're in a bind. It gives you credibility -- and in Hollywood, your reputation is everything."
* Money. Speed costs money, sometimes a lot. Often the expenses are obvious and visible, such as Tarason's state-of-the-art label-printing equipment or Steadi-Systems' up-to-the-minute inventory-control system. More often they're buried in a balance sheet. Tarason, for example, always keeps a little production capacity in reserve, just in case there's a rush order; a custom manufacturer with a three-month backlog doesn't have that inefficiency. Because you're spending money on speed, moreover, you won't have much leeway in other areas. Everex, for instance, can't afford big parts inventories, and so must manage its purchasing within an inch of its life. "You have to have all these contingency plans," admits Lee, "not just a second source but a third and fourth source, and you have to know who their backups are." When a parts shipment gets misdirected to Japan, as happened once, such knowledge is the difference between steady production and shutdown.
* Management. Forget structures; forget vice-presidents and assistant vice-presidents and general managers. Everex, by now a good-size company, has only a couple of managerial layers between president and line worker. Ralph Hinson, president of Tarason, frequently puts on his jeans and goes out to run a label-printing press; if he's not there, his vice-president will do the same thing. Workers can forget job descriptions, too -- in speed-oriented companies they'll often be called on to do more than one task. "People in my accounting department can handle sales," says Schoenberg of Steadi-Systems, which generates $5.3 million in revenue with only 10 employees. "And everyone is adept at handling orders. Here, nobody's put on hold and no customer ever has to wait for a salesperson."
Is it worth it? Better believe it. In a crowded field, Everex grew from under a half-million dollars in 1984 sales to its current position as one of the top domestic PC makers. Tarason and Steadi-Systems are both on the 1989 INC. 500. And unlike a lot of fast-growing companies, all three are making money.
