Operating a machine business sustainably can be challenging, as Kennewell CNC Machining of Murray Bridge, Australia discovered. Established more than 20 years ago, the business utilizes the latest techniques and technologies to ensure businesses around the world have the machined components they need to get the job done. That, however, was not always the case. As a small country machine shop, the business was heavily reliant on local clients, mainly operating within the agricultural sector. An inefficient business management system and ERP, however, resulted in the business running reactively. "We were always putting out fires," explains founder and CEO Brett Kennewell. "That was our MO. Every day I came in, I dreaded the question: 'What was going to be our emergency that day?'"
Brett recognized the business needed to change, explaining: "I was getting tired of this..." Customers were dropping off - leading to yet another downturn in sales - including one major customer who decided to change direction after Kennewell had heavily invested in their work. Devastated, Brett and his team began exploring work within the defense industry. They learned about the Defense Readiness Fund that the Australian government promoted to strengthen the industry in Australia They learned what work needed to be done to help them serve clients within this valuable sector. Working within the supply chain for aviation, space and defense organizations, they learned, requires a QMS and ISO9001 certification as a minimum. This realization led to research on machine shop management software that incorporated both ERP and QMS functionality where they were introduced to ProShop.
Impressed by how ProShop was developed specifically around the needs of businesses like theirs, and was created by machinists for machinists, Brett and his team shared the idea of using ProShop with their QMS consultant. Brett recalls him saying: "This is amazing. I think it's perfectly suited to your machine shop." Kennewell particularly liked how this solution was focused on ITAR and CMMC compliance, yet would allow the business to send their operations into the cloud and maintain it from there in a secure environment, reducing cost and increasing security, so after a bit of in-house discussion they began their journey with ProShop.
The personalized and close support during the onboarding process was very different from his experience with the last ERP system. "We loved the onboarding process! I'll admit initially it was a bit overwhelming," recalls Brett. "Even though everything flows so easily today, it was foreign to us at the time. But our trainer was there with us helping us learn and become proficient." Support like this makes it possible for Kennewell to migrate more and more into ProShop all the time. For example, the company utilizes its training module for easy management of its training needs.
When Brett went to a maritime defense expo in 2019, he connected with some potential clients looking for new machine shops. Two of those have gone on to become customers. There were some concerns, notes Brett. "When we told them that we were implementing a QMS, they were okay with that as long as we got over the line soon. We were implementing a quality management system when we had no previous experience of even tracking the times of our jobs. We were amateurish, luckily I recruited a qualified engineer, Emilien - experienced with QMS - to help manage the business and our ISO certification efforts." Following his appointment as QMS coordinator, Emilien suggested the business consider introducing interns to the team to help adopt new modules and features in ProShop. Familiarizing their first intern, Kelly, with the system was easy, according to Brett. "She's helped with many aspects of ProShop, and is currently helping implement ProShop's tool crib management which is such a huge efficiency driver for us." Kelly and the second intern, Thomas, have gained in-depth understanding of the system necessary to help expand Kennewell's use of ProShop.
While Kelly is focused on standardizing tooling and engaging in improvement activities, Thomas is supporting development in the equipment module by maturing their calibration and preventative maintenance processes. "Whenever we want to expand our use of the system and manage a new aspect of our shop, and we've asked the ProShop team if something can be done in ProShop, the answer is always yes. They can do absolutely anything with ProShop," enthuses Brett.
The integrated QMS has made daily management of the ISO system very easy and it takes little time. These improvements have allowed Emilien to maintain his QMS Coordinator role, but focus most of his attention on efficiency of operations as Operations Manager. "Our QMS work like management reviews and internal and annual audits is so fast now, that it allows Emilien to really help out in operations," said Brett.
Some of the changes he asked of his machinists were difficult at first, Brett said. "We had never asked our employees to track time before and they didn't understand why we wanted them to do that. But once we explained why, they all got on board and started doing it. That one change has allowed a host of other improvements. We can now much more easily track our schedule and improve our on-time delivery. Everyone knows what jobs are coming up on each machine and the machinists will often volunteer to run a job on their machine if they have capacity and they see a co-worker is at capacity. This new situation has led us to breaking revenue records and shipping jobs faster than ever before. Everyone is understanding the goals and working collaboratively together to achieve them! It's fantastic! In fact, last week the whole company took Friday off because we shamed our sales goals. We're winning all over the place!"
Job costing - which they were never able to do well in their old ERP, has become a critical part of their workflow. This analysis is crucial to keep jobs running profitably, as Brett discovered. "You realize that - because you've estimated on a piece of paper - you didn't account for everything, like the time spent on job purchasing, quoting, set up and job kitting of tools. It's how you cover the cost of your office staff, team leaders and things like that. We realized we were losing money on a lot of our jobs." ProShop highlighted that the issue was not just a historic one, but a widespread one, too. With so many unprofitable jobs on the books, the discovery led to Brett asking his customers for a 20% increase on many jobs. It was not easy. Luckily, he had evidence from ProShop to back up his request and most costumers were fine with the increase. In addition to higher prices, ProShop gives them the ability to easily identify opportunities for improvement and drive those changes quickly. This has led to a significant boost to the bottom line of the business, allowing them to use that profit to add new equipment and grow. While making decisions with data is essential, it's not Brett's strongest suite. However, it is ProShop's as Brett explains. "We have a workshop full of the highest qualified people in the industry. Onboarding engineers has been a real godsend because they are analytical and data driven. When they ask for this data, we can get it for them from ProShop. It's making all the difference to every aspect of the business."
The business recently underwent its annual recertification audit for ISO 9001. ProShop made it possible for the third-party auditor to complete the process remotely. When asked what the business did with a new RFQ, Brett was able to talk the auditor through the whole process - leaving the auditor "gobsmacked" by how integrated and deep it was. The audit was so successful they finished so much faster than they planned and had zero findings. ProShop also provides an additional selling point for new customers. The business encourages them to visit the shop. While they're on the shop floor, Brett takes time out to demonstrate how it helps track materials, scheduling and costs.
"It's a great selling tool," comments Brett. "They know their job is going to be looked after properly and customers are really pleased with that. It's been a major contributor to many new clients signing up with us. And since operations is running smoothly, I don't need to spend my time putting out fires anymore. I can focus on sales and growing the business."
Before Brett began working with ProShop he was worried about retirement. While he thought he might need to sell the business, he knew he might only get pennies on the dollar at auction. Every shop owner he knew had followed that path. Now he's far more optimistic about his opinions - perhaps selling it as a successful, profitable business serving high-end clients with real, repeatable processes. He never conceived of a future like that before ProShop and now he's focused on developing a strategic business plan for the years ahead. "I started this business at 25, and now I'm 52. It's all I've really done and I never conceived of getting a windfall when I retire. I'm really feeling confident about the future and I'm excited about continuing to grow the company." Kennewell states.