For more than 26 years, the father-son team of Horace and George Spottswood took Quality Filters, Inc., from a small manufacturing company with a limited line of pleated filters to a national firm offering a large inventory of HVAC, gas phase and paint filtration products. But in 2007, the 100-employee company located in Robertsdale, Ala. began to feel competitive pressure from overseas companies.
“One of our largest customers was looking at buying a new filter product in China, and we also heard from several distributors that they were considering bringing in products from overseas. That was our threat and exposure to foreign competition,” recalled Rich Scott, president of Quality Filters. “Any manufacturing firm needs to be innovative and creative to find ways of keeping manufacturing here on our shores.”
To address the foreign competition, Scott applied for support from the Southeastern Trade Adjustment Assistance Center (SETAAC), a program based at Georgia Tech’s Enterprise Innovation Institute that helps manufacturers develop and implement turn-around strategies to better compete with imports. SETAAC project manager Mark Hannah conducted an initial review of Quality Filters and helped the company prepare an application for the U.S. Department of Commerce. Once the company was approved for funding, Hannah developed an adjustment plan that detailed projects to receive funding support, including assistance in research and development, marketing and new product development.
Firms that are accepted into the SETAAC program pay for 25 percent of the initial diagnostic visit and adjustment plan. The Department of Commerce generally pays half of the cost of project implementation for activities to benefit the company. Private sector consultants submit quotes for implementing the identified projects and the company chooses which consultant to hire to execute the outlined changes.
“Part of the funding was used to develop a new company image and to get our message out about our strengths versus our overseas competitors. As a local manufacturer, we are better able to respond to our customers’ needs and can answer their questions in a timely manner,” Scott noted. “With the SETAAC funding, we were able to secure a good marketing firm that took our strengths in personal service and attention and branded us as an innovative and creative company.”
As a result of the SETAAC assistance, Quality Filters launched a marketing campaign that included targeted advertisements, e-mail marketing and monthly press releases. The company’s new tagline is “Think Simple. Think Smart. Think Quality.”
Quality Filters also used the SETAAC funding to partner with the Auburn Technical Assistance Center (ATAC) to implement “Eureka! Winning Ways®,” an award-winning three-step process that helps companies assess how to best jump-start growth through innovative ideas. ATAC is part of the Alabama Technology Network that links two-year colleges, The University of Alabama System, Auburn University and the Economic Development Partnership of Alabama together to meet the needs of the state’s existing manufacturing base.
“We thought there was growth potential in the green market,” said Scott. “We took that idea through the Eureka! Winning Ways process, grading it against some pretty stringent criteria and actively conducting organized research on the market. We actually launched the idea into a specialty product line.”
Quality Filters also created its own continuous improvement program called VISION (Value Individuals, Sustain Improvement, and Outperform Needs). The quality control program, required by one of Quality Filters’ largest customers, was completed with technical assistance from the Alabama Technology Network, which developed an electronic system similar to quality management system ISO, conducted kaizen events and trained staff.
Since the three-month Eureka process, Quality Filters has installed new manufacturing equipment to meet customer demands in the green growth area. Despite an 11 percent decrease in top-line revenue, the company has been able to maintain nearly the same profit because of the release of its new, innovative products. Scott says that Quality Filters has also captured a previously untapped Internet sales base through which it markets custom air quality filters to residential customers.
“I have intentions and high hopes for new product development; we should be innovative,” observed Scott. “One of our patent-pending products will take 17 component parts and reduce them to two. That’s an improvement from a lean manufacturing standpoint and will allow us to stave off intrusion from overseas competitors.”
About the Southeastern Trade Adjustment Assistance Center:
The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to compete better with imports. Last year, SETAAC helped more than 30 companies in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. On average, these companies received $42,000 in matching funds. In the last three years, SETAAC’s clients have increased sales by 26 percent and improved productivity by 28 percent. Over the past five years, 49 SETAAC clients reported sales increases of more than $39 million and productivity improvements of more than 43 percent.
About the Enterprise Innovation Institute:
The Georgia Tech Enterprise Innovation Institute helps companies, entrepreneurs, economic developers and communities improve their competitiveness through the application of science, technology and innovation. It is one of the most comprehensive university-based programs of business and industry assistance, technology commercialization and economic development in the nation.
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Writer: Nancy Fullbright