By Joe Boomgaard | MiBiz
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ZEELAND — When it comes to the implementation and use of technology, custom cabinet manufacturer Woodways Industries Inc. could show many larger companies how it’s done.

But that wasn’t always the case. When Suzanne and Volker Rudnitzki purchased the company out of bankruptcy court three years ago, the company didn’t have one lick of technology — not even a server — in its operations.

Suzanne Rudnitzki said the company didn’t bother catching up with old technology and instead leapfrogged ahead. Today, all of the business, its customer orders and manufacturing instructions exist in the cloud.

“We could never grow at the rate we are without it,” she told MiBiz.

In three years, Woodways’ sales have grown 400 percent, manufacturing space is up 100 percent, and the workforce has expanded by 10 percent.

Rudnitzki and her husband, a German engineer, both had previous experience in the automotive industry and brought to the company a new appreciation of quality control and lean manufacturing. Upon buying the company, they quickly learned that wood-based cabinet manufacturing could also use those systems.

By using technology to streamline processes and by implementing lean systems, the Rudnitzkis almost immediately doubled manufacturing production and automated many of the previously manual tasks.

Moreover, they developed their own application that would serve the entire company, from the order-taking process, through material preparation, final assembly and delivery.

“We started with the paper system to see if we captured everything, and from there, we automated it,” she said.

And what the company found was that it was more accurate with its delivery of cabinets. Because all of its products are customized to individual orders with seemingly endless options for materials types, accessories, finishes, designs and so on, there was a lot of room for error in the process. If some aspect of the order changed and the paperwork didn’t catch up to production in time, precious time and material would be wasted.

Recently, the company has translated its system into an iPad app from which it runs the entire process, from order taking to delivery. What’s been useful is that if two different salespeople were involved in an order, they could both work from the same set of information, a feature that was particularly important after Woodways opened its new showroom on 28th Street in Grand Rapids. Customers could work with people at either of the company’s locations and have the same level of service and familiarity with the order.

Once an order is approved, the salesperson completes it and sends it directly to the production floor.

“Every person in the company has access to … all of the account information. We have no project managers. The people who quote the jobs can do everything directly. There are infinite possibilities we can create, … and we don’t lose anything in the translation,” Rudnitzki said. “Plus we travel all the time. My husband is in Germany at least one week a month, and if he changes something on the schedule, everyone sees it immediately. We don’t have phone calls. You just look at the order. There’s so much more time spent working now. It cut our calls by 80 percent because the first person you talk to can answer your question. It’s so much nicer for anyone.”

Guiding a cultural shift

Moving from an analog to a digital operation required a great deal of training and a culture shift within the company. The Rudnitzkis worked from the theory of constraints to engage Woodways’ skilled craftsmen in why they did certain tasks the way they did. As the owners, they didn’t have a background in woodworking, so they had to rely on their employees to help them identify process improvements and new products or applications. That led to continually cutting the cost of doing business, which helps the company be more competitive.

“With manufacturing, what we did here is scalable. We do not have to change the way we do business,” Rudnitzki said. “We cannot buy our material for less than what Merillat does, but we don’t have inventory costs and we don’t develop product lines. That keeps our administrative cost so low. We may pay more for material and labor, but we make up for it in the cost of doing business. We probably have a lower margin, but we have no warehousing, no distribution. We don’t have a catalog or marketing department. We’re able to knock all of those things out.”

When the Rudnitzkis took over, Woodways did almost all of its business with residential customers. Soon after the purchase, however, 25 of the 27 builders in its customer base went out of business. Out of necessity, the company worked hard to break into the commercial market, developing relationships with contractors — First Companies in Grand Rapids, for one — and started to reach out to architects. Today, orders are split about evenly between the commercial and residential markets.

Woodways also reached out to new markets with a big push into Chicago and the five state area around Michigan.

With the diversification, the company has grown rapidly, to the point where it is out of space at its 22,000-square-foot Zeeland manufacturing facility. Rudnitzki said the company is looking for about 10,000-15,000 square feet of space so it can add another CNC machine to scale up production.

If the model continues to take off, she said the company might look at scalable, centralized manufacturing operations around the country. Such a practice would optimize the capabilities while reducing transportation and distribution costs, surely a key increasing cost, she said.

“That will be the future of manufacturing. With higher gas prices, serving local markets will be good for business,” Rudnitzki said, noting that plays well with customers looking to buy locally, as well as those paying attention to sustainability. The company’s green credentials are reinforced by its use of all FSC-certified wood, its minimization of scrap through the use of CNC equipment, and its partnership with local groups to reuse waste like wood pieces and sawdust.

Avoiding option overload

While commercial clients are very accustomed to getting products their way, Rudnitzki said Woodways has found residential clients can be put off by the company’s lack of a product catalog.

“When customers ask for a catalog, that’s our biggest fumbling point because we don’t have one,” she said. “We don’t try to push them in a direction. People seem to gravitate toward what they like. We have the customer experience down so well, when they gravitate to a certain look, we move through the manufacturing sheet and work with them on what type of manufacturing style they want, what door style or specie of wood. We keep it controlled because the customer can get overwhelmed quickly.”

Their approach may be unconventional, but Rudnitzki said she and her husband are bringing outsiders’ perspectives to the industry, which makes it easy to innovate.

“It’s been fun to take what we had as a background and combine it with the skills of the people here … and combine that with a little bit of technology to have a good outcome,” she said.