Case Study: H&H Precision Products Division
H&H Precision Products Division,
Emerson Electric Co.,
Cedar Grove, NJ
In 1982 Emerson’s H&H Division started reporting directly to Robert Amter while he was Vice President International with Emerson Electric’s In-Sink-Erator Division.
H&H manufactures two, medium technology, product lines sold to original equipment manufacturers (OEMs):
~ Bi-metal thermostat, variable volume controls for commercial air conditioning.
~ Water cooler valves and components.
Problems:
Financial Results (000 $) FY1978 FY1982 Annual Growth ’78-’82
Net Sales $3,347 $3,613 2%
Pre-Tax Profit $1,139 $1,181 1%
% to Sales 34.0% 32.7%
» High profit product line but nil growth. Sales growth limited by H&H’s practice of maintaining Carrier Air Conditioning as its only variable volume control customer. H&H was considered the industry’s technical leader in bi-metal thermostats and controls
» Water cooler product line was not growing. Sales were to a limited number of water cooler manufacturers and excluded the two largest OEMs.
» Product engineering was H&H’s strength but was working on too many priorities. Three new, high potential products were languishing because of the lack of engineering time.
» Manufacturing equipment was old, not state of the art and needed to be upgraded. Production planning system was antiquated. Standardization opportunities were available, but not implemented.
» A non-union, hourly operation. Prior to Amter’s appointment in 1982, there were two wild-cat work stoppages.
Results Achieved:
Financial Results (000 $) FY1982 FY1983 FY1984 Annual Growth ’82-’84
Net Sales $3,613 $4,602 $5,271 21%
Pre-Tax Profit $1,181 $1,743 $1,992 30%
% to Sales 32.7% 37.9% 37.8%
» Without damaging the relationship with Carrier, developed new business from other air conditioning OEMs.
» Developed new sales from key water cooler manufacturers.
» Refocused product engineering to complete the development of the three new, high potential, products. Added one new degreed engineer to the staff.
» Started upgrading manufacturing equipment and developing a production planning system.
» Replaced the Executive Vice President, General Manager.