R&R Engineering Could Teach NFL Hopefuls a Lesson

A few years ago, just after the dot. com bubble burst, I wrote a story about a class of companies I dubbed the "not-coms" because they had nothing to do with technology and nothing to do with getting rich quick (although their founders were very much in the process of getting rich).

One of the things that struck me about all of these extremely successful companies was how their approaches to business seemed to fly in the face of conventional wisdom. One, a $2 million-per-year retailer of musical instruments, sold only rare and exotic instruments for which there was only a very small market. Another, a producer of organic beef long before hormones, antibiotics and mad cow disease were issues, was successful in price-conscious supermarkets selling a product that cost twice as much as ordinary mass-produced beef. 

This week, I came across a small manufacturer in the fastener business that is going against one of the most widely-accepted tenants of lean manufacturing, and doing very well in a market that would seem ripe for domination from low-wage countries. (In 2006, China had 38.8 percent share of the U.S. fastener market.)

The company is R&R Engineering of Summitville, Indiana, a manufacturer of bent bolts such as u-bolts, j-bolts, threaded wire forms and other similar products. Its success is phenomenal: over 10 percent annual growth over the last ten years, 69 percent growth over the last four years, a 12 percent increase in workforce, and a 56 percent increase in parts per hour.

When I talked to founder Jim Amos I asked him what he thought were the key factors in his company's success. He said, "Well, we pick up the phone. We don't make people use voice mail or e-mail."

That's conventional business wisdom - good customer service. But in a recent article in BizVoice, the bi-monthly magazine of the Indiana Chamber of Commerce, VP of sales Mike Melott pointed to  another factor: a 3.5 million pound inventory of raw materials, which is not exactly lean. However, although this huge inventory ties up capital and, lean manufacturing proponents would quickly add, floor space, it makes sense given the special market conditions in which R&R operates. For starters, that inventory enables R&R to offer most of its customers same-day shipping, something no Chinese company could ever do. In addition, it serves as a hedge against rising steel prices (caused, most analysts agree, by increasing demand from China) and provides price stability that is independent of short term market fluctuations.

This week, about 50 miles southwest of Summitville, the NFL's annual Scouting Combine is taking place, and I can't resist saying that some of the prospects could take a lesson from R&R Engineering on being fast and competitive while carrying a lot of weight.