to eliminate bearing failures. Oil was scrutinized at a micron level to improve filtration and prevent hydraulic failures. These efforts combined to significantly reduce equipment failures and avoid thousands of dollars in downtime.
Sales procedures were also transformed to be more effective. Pontiac Aggregates’ traditional selling practice was linear and time consuming. Tom saw opportunities to consolidate the selling process by addressing activities concurrently instead of consecutively, thereby shortening the sales cycle. Tom brought key management on all large sales calls. This procedure allowed Pontiac Aggregates to address any objections and close sales immediately.
Lightweight concrete using Pontiac Aggregates offers design flexibility and substantial cost savings by providing lower dead loads, improved seismic structural response, longer spans, better fire ratings, thinner sections, less reinforcing steel, and lower foundation costs. Tom worked with the deans of the schools of architecture at Georgia Tech, North Carolina State, and Clemson to convey these important concepts to their graduating students. Tom was appointed to the Development Board at the Duke School of Architecture. This provided an immediate connection to many of the leading architects in the South. The heightened exposure greatly improved Pontiac Aggregates’ product specification.
With expanding product specification, sales reached the production capacity of the plant. To further enhance profitability, prices were selectively increased. Certain product segments that were not profitable were pushed to competitors.
Plant safety was also a critical area of focus and priority. A full-time Director of Environmental, Health and Safety (EHS) was hired. Employee-directed safety committees were formed and industry experts were consulted. This emphasis reduced lost time accidents from four or five per year to no life-threatening accidents in a four year stretch.
To improve distribution, Pontiac Aggregates began shipping product at off-peak times to strategically located strategically located inventory terminals. These stores were drawn down when demand exceeded plant shipping capacity. Efforts were made to ship with the most economical carrier. Barge-shipped product could lower transportation costs by as much as 80%.
Formal strategic and capital planning processes were implemented. These processes were year-round and incorporated a great deal of feedback from the field. Key goals and objectives were communicated to all employees in the form of charts and graphs. Progress was tracked against budget and prior year performance. These initiatives stimulated many conversations about what could be done to further improve performance.
Tom groomed the Vice President of Production to be his successor and arranged for him to study for an MBA degree on a part-time basis. As the VP assumed more responsibility, Tom had more time to help with other struggling operations in the Diamond Industries APG organization.
In 1998, Tom was promoted to Regional President, Diamond Industries APG South. This group was newly-formed and initially consisted of six manufacturing and distribution companies with sales of $132MM. Group building products included masonry, architectural stone, bricks, patio products, retaining walls, bagged stone and concrete, fly ash, and lightweight aggregate. Tom was challenged to expand the region and convey the important strategic lessons learned at Pontiac Aggregates.
Many of the programs started at Pontiac Aggregates were rolled out to all APG South companies. These initiatives included detailed preventive and predictive maintenance, strategic planning, capital effectiveness programs, financial and operational reporting of key metrics, transportation effectiveness, and working capital management.
New safety initiatives were also adopted. Machine lock-out procedures were standardized and communicated. Yards were paved to prevent stacking failures. Plant interior walls were painted white to improve visibility. All accidents required immediate investigations; plants were shut down to share the investigation results. In quick order, APG South established the best safety record in Diamond Industries APG.
While leading APG South, Tom directed the acquisition of three manufacturing companies. He identified the prospective companies, analyzed the opportunities, designed suitable offers, reviewed the contracts, wrote the board proposals, and coordinated the integration of the acquired companies. Combined annual revenue of these acquisitions exceeded $67MM.
Team selling processes were streamlined and two new sales channels were introduced to the region. When these initiatives were combined with the new acquisitions, regional sales increased from $202MM to $209MM.
Tom was the first regional president to conduct formal sales and management training at a group level. In addition, he spent an inordinate amount of time individually coaching, mentoring, and training promising young managers. Seven of these employees went on to become presidents of Diamond Industries affiliated companies.
Diamond Industries APG management wanted to construct a new prototype manufacturing plant. Tom was integrally involved in the site selection, design, construction management, and startup of the facility. He employed new methods to reduce costs and save time on the critical path schedule. The state of Tennessee was successfully solicited to fund staff training costs. This plant was generally regarded as the most successful start-up in APG history.
After three years, the APG South region grew to nine companies, $240MM in revenue and 1,000 employees in twenty-seven locations. Group EBIT was at $19.2MM with a RONA of 20.2%.
In 2001, Tom was promoted to Regional President, Diamond Industries APG West. He directed all aspects of the largest APG region with ten diverse manufacturing and distribution companies, $280MM in revenue and 1,400 employees in thirty-five facilities. Regional building products included masonry, architectural stone, bricks, ornamental precast, roof tile, ready-mix concrete, patio and landscaping products, retaining walls, bagged stone, and concrete mixes. In a post 9/11 environment, Tom’s emphasis shifted to controlling cost to maintaining profitability in a declining market.
Administrative operations were consolidated to eliminate $2.0MM of redundant overhead.
Lean manufacturing techniques were utilized to increase production and lower unit costs. Manufacturing operations were filmed, broken down, and analyzed. Root causes of machine downtime were rigorously scrutinized. Machine set-up procedures, yard layout, and product staging were also examined. Innovative process improvements were adopted that lowered operating cost by $5.0MM and increased throughput by 8%.
Tom spent a considerable amount of time directing the turnaround of three APG West operating companies: Kevtile, Celsus Pre-Mix, and KCI Manufacturing.
Kevtile -Refocused product strategy and consolidated dealer operations, upgraded sales team, improved plant efficiencies, and eliminated production variance. Took operations from breakeven to $1.9MM profit in one year, $3.4MM in two years.
Celsus Pre-Mix - Improved production efficiency, lowered unit cost, added new product, and expanded distribution. Improved EBIT from $490k to $1.8MM in one year.
KCI Manufacturing -Outsourced truck fabrication, reduced inventory, consolidated operations, and improved preventive maintenance. Boosted EBIT from $370k to $2.0MM in one year.
Like APG South, many of the programs started at Pontiac Aggregates were rolled out to all APG West companies. New safety initiatives rolled out in the West cut historical accident rates in half.
As a result of leadership training successes in APG South, the Diamond Industries APG corporate group developed its own in-house training program. Tom helped to put together many of the training modules. He also taught courses on leadership, recruiting, staff development, and training.
Regional EBIT improved by $5.0MM despite a 2% post 9/11 decline in sales. RONA for the group increased
