Braun Expansion: Aligning 'People and Process'
February 1, 2018
Following a recent build out, machinery exec gives his take on globalization, recruitment/ retention issues and more
G.A. Braun Inc. recently expanded its operations, adding an additional 101,000 square feet to its 155,000-square foot headquarters facility in Syracuse, NY, where it’s operated since December 2008.
The facility upgrade in mid-2016 enhanced the company’s manufacturing capabilities. Among these were the expansion of an in-house metal-fabricating subsidiary, CNY Fabrication, plus diversification into new business opportunities and the growth of its commercial and institutional laundry operations in both domestic and international markets.
Textile Services recently toured the plant and interviewed President Joe Gudenburr on Braun’s growth strategy and how its expanded facility has enhanced the company’s ability to ensure quality, innovation, reliability, service, safety, training and more in its manufacture of wash aisle and finishing equipment.
WORLDWIDE MARKET GROWTH
While on the subject of the expansion, we asked about globalization and whether Braun has considered establishing a manufacturing facility or partnership in China or other countries, in order to enhance its ability to sell machinery to customers in the Far East and elsewhere.
Braun doesn’t manufacture in China, and Gudenburr says he’s wary of following the path of other companies that have partnered with Chinese manufacturers, due to the risks this poses regarding intellectual property and quality control. “China is a challenging market given that their focus is on price as opposed to value, and quality. When your equipment has a 27% duty applied to it that the client must pay it makes it difficult to compete. “We have evaluated a number of captive and partnership concepts in China and to date have decided not to pursue any. However, we have explored some attractive Asian-based alternatives that would afford us the ability to avoid the noted duties, retain operational control of the manufacturing environment and assure quality control. This will be a continued area of focus over the coming years as we look to grow our international market presence in Asia.”
Beyond the price-driven attitude, the marketing model common in China doesn’t jibe with Braun’s approach to partnering with customers for long-term growth, he says. “Our model is to truly get involved with our clients early on in their strategic business planning process. We don’t want to be that company that’s just pushing steel at our clients,” Gudenburr says. “We want to be the company that’s involved early, that fully understands their objectives, and we want to play an active role in developing short, medium, and long-term solutions that bring value to their business. Our approach overseas is no different. Too often in our business we see transactional- based selling taking place. I find it hard for this approach to work, given the nature of the service and durable-product solutions that we offer to clients. What is interesting to me is when you see solutions that failed in North America being dusted off and marketed as superior solutions in foreign markets. This is a creative way by some in the industry to win in the short-term via price and brand name, but it is a long-term mistake that penalizes our client operators.”
Other than China, gaining access to markets in Asia is usually easier, Gudenburr says. He cited Singapore, the Philippines, Indonesia, Korea, Malaysia, and Thailand as examples of countries where Braun sells and services laundry equipment. To enhance the expertise of its agents overseas, the company has established extensive training events for its sales partners internationally. “We’ve really focused our energies on establishing strong partners,” Gudenburr says. “We used to sell to export agents, which meant oftentimes they sold with what got them a deal. This isn’t always the best for the customer, and does not afford a differentiated approach to growing your presence in any one market.” That reality led Braun to restructure its strategy to give it greater control over the sales process. “We basically got rid of all of our export agents roughly five years ago and took our selling efforts ‘captive,’” he says. “Now, we have Braun sales and technical managers leading and qualifying every opportunity we pursue with our in-market sales and service partners (exclusive or non-exclusive, depending on the country served). We require those partners to send service (reps) here for training. In the past 18 months we have held schools for our partners based in Indonesia, Thailand, South Korea, Latin America, Canada, and the Philippines. The schools have been attended by as many as 20 personnel at a time, and often are complemented by regional client partners who want to get hands on with their equipment as it is being tested in our factory.”
Gudenburr says customers benefit from this sales model through better service and improved prospects for long-term growth. It also reduces the likelihood of equipment-related problems. In today’s global market, laundry machinery malfunctions can have far-reaching implications. “The world’s flat,” he says. “A problem with any installation can have an impact across the market, and we want to make certain that the right solutions are sold, a proper installation is executed, and that a support model for our client partners is clearly in place as we transact business domestically or internationally.”
Looking ahead, Braun is bullish on its overseas efforts. “We are very excited about the progress that we have made in the targeted markets we have pursued since eliminating our export-agent model. We have been able to establish great partnerships to aid in the sale and service needs of our clients, and we have been able to build relationships with partners and clients alike that will stand the test of time.”
THRIVING ON DIVERSITY
Another strategy Braun has deployed to safeguard its ability to compete in a consolidating U.S. laundry market is by diversifying among the the linen, uniform and facility services sectors that it currently serves, as well as pursuing non-laundry accounts. “Our plan goes down multiple paths,” Gudenburr says. “No. 1 is diversification in North America with the products that we offer. We’ve done that over the last decade plus.” However, many in the industry still view Braun mainly as a supplier to industrial uniform laundries. In fact, Braun sales today are split roughly 30- 30-30 among industrial, healthcare and hospitality work, he says. Gudenburr adds that with the advent of its new and expanded facility that Braun has diversified to support custom-fabrication and powder-coating opportunities that are outside of the laundry business. “This effort has actually allowed us to further strengthen our core capabilities, and improve our business and manufacturing processes.”
Diversification extends to Braun’s supply chain as well, he says, noting that the company avoids “sole sourcing” of supplies and outsourced metal-fabrication work. “We don’t want to sole source anything,” he says. “Our goal is to ensure that we do not have a supply-chain exposure associated with sole sourcing. When we built our new plant in 2008, and consolidated our operating facilities, we had defined this to be a critical-path priority. By doing so we strengthened not only our business, but the businesses of our supply-chain partners who we had long worked with. When we decided to invest in the expansion (in 2016), once again supply chain was a major reason and justification for this investment. The end result is that we are and will be fabricating all of our equipment, and we have effectively diversified our supply chain. This has allowed us to work in a collaborative and productive manner with our partners to eradicate waste, improve processes and strengthen the capabilities of all involved … a real win/win approach.”
As Braun has sought to enhance its competitiveness in these and other ways, Gudenburr credits the company’s implementation of ISO certification in 2005 as the foundation for its growth. In recent years, the ISO emphasis on policies and procedures aimed at ensuring continuous improvement has shifted to a more customer-centered focus. “Every time they revise the standard, they keep making it more about the customer and how you’re measured by the customer,” Gudenburr says. “Years ago, they asked: Do you measure everything, do you control-chart everything? That’s good. That’s a baseline starting point. But now it’s evolved from not only you’ve got to be tight in your operation, but how does that translate to the end-product quality and the customer experience? How does that feedback come back to you? How do you use that information to strengthen your process?”
Braun surveys its customers regularly to fine-tune its operations for their benefit, Gudenburr says. One result is greater flexibility to meet the needs of individual operators. For example, during a visit Textile Services made last year to a new Linen King plant in Conway, AR, President Leonard McCullough told us that when he needed a new ironer on short notice (seven weeks) Braun was the only company of several that he contacted that said they could meet his time frame. Gudenburr said the quick-turn order required a “creative” use of their workforce and production capacity. “We have a dynamic workforce that flows to demand, and that is not limited in their capabilities. This affords us a great deal of flexibility in how we load the facility and results in greater operational efficiencies. We were able to support Leonard and his team, while not disrupting any of our other client shipment commitments.” The reason that most laundry machinery isn’t available “off the shelf ” like new cars is a matter of cash flow. “When you make specialized products with a high material content, it’s hard to have big steel sitting on the shelf,” Gudenburr says. “Because we forecast and are constantly analyzing our demand from clients, we perpetually update our raw material, component part and sub-assembly inventories so that we can respond as efficiently as possible to the needs of our client partners.”
Having ISO standards in place, coupled with hands-on team management, helps Braun meet its delivery deadlines. “Once we acknowledge an order and give you a ship date, that is the date,” Gudenburr says. “We haven’t missed a shipment in over six years. And we track not only shipping out the door, but we track the machine to final QC (quality control) and to the shipping department. So it has to make those dates as well.”
It’s not unusual for companies like Linen King to have a mix of new and used equipment. Braun saw an opportunity in this area to compete with independent dealers that were buying and selling Braun’s second-hand machinery by developing a line of its own rebuilt—or “remanufactured”—equipment. “We strip everything to bare metal,” Gudenburr says. “It’s amazing what we do and this results in our clients (i.e., operators) achieving an attractive savings. When we rebuild a machine, we strip it down, and then build it back up to the current-day OEM configuration that best supports the chassis/vintage machine we are working with. When completed, the customer has a machine that is reliable, that utilizes current technology. This avoids the obsolescence risk that clients accept when buying used machines, and we provide a new machine warranty on these machines. This also allows our clients to depreciate these machines as new. This is a real win/win.” He contrasted that approach with the typical refurbished machinery that gets new springs, shocks, a fresh coat of paint and minor touch-ups before vendors, “Kick it back out into the field.”
We saw several examples of remanufactured as well as new machines at various stages of production during a walkthrough of the new Braun plant. Gudenburr dismisses the risk of remanufactured machinery “cannibalizing” sales of new equipment. The demand for second-hand equipment is a reality that manufacturers have to deal with, regardless, he says. In addition, the remanufactured line has the “green” appeal of recycling, while at the same time making a compelling case for the quality of Braun machinery. “Typically, these machines are 20 years old,” Gudenburr says. “I say it’s the greatest testament to our equipment because I don’t know of many other manufacturers that are able to bring in 20-25-year old machines, rebuild them and get another 20-25 years out of them.”
TEAMBUILDING: INSIDE AND OUT
While “process” issues, ranging from international market development to the company’s recent plant expansion are critical to Braun’s future, the “people side” of the business is of equal importance to their leadership team. For example, Gudenburr cited the company’s relationships with suppliers. Each year, key suppliers meet with Braun to discuss quality, efficiency and other issues. In a recent case, Parker Hannifin Corp., a key supplier of hydraulic equipment to Braun, came in for talks with company officials. “We rate every one of our vendors,” Gudenburr says. “A big part of that session is going down through every vendor and how their ‘report card’ is. That’s not only on shipments and quality, it’s also on their ability to support us on engineering development, Kaizen and other things.” Additional steps include audits of vendor plants and discussions with key leaders on areas in need of improvement, he said. The issue with Parker Hannifin centered on concerns about the company’s distributor network. The company welcomed the input from Braun as an opportunity to improve. “These guys took the bull by the horns,” Gudenburr says. “They dedicated a whole engineering team to our Kaizen efforts. And it’s been huge.’” The supplier’s contributions have facilitated efforts by the two companies to work on exclusive new products, he says.
Braun applies a similar approach to continuous improvement with its own staff, Gudenburr says. Like many commercial laundries, recruiting in an era of full employment isn’t easy. And millennials in particular tend to eschew opportunities in manufacturing vs. software development and similar jobs. Braun has responded by participating in a number of state and local employment-training programs working with local educators, government officials and other experts. “We do all of the above and then some,” Gudenburr says. “We have people come into our facility.” Key partners include the P-TECH (Pathways in Technology Early College High School) program sponsored by the Syracuse City School District to help place students in technical jobs. Braun works with veterans’ groups as well to hire ex-service members.
The outreach effort continues after new employees join the company, through an extensive onboarding program, Gudenburr says. For example, he described an open forum every two months for new hires dubbed “Lunch with the Bunch.” These events provide a setting for new employees to meet with top management and senior peers. They are encouraged to ask questions about the direction of the company, new-product development and the corporate culture. Gudenburr says the insights his team gains during these sessions are outstanding. “It’s amazing the feedback we get. One, our team members love the fact that they’ve met everybody. They understand the business and our strategy. The commitment to training, that we didn’t just throw them in there and say, ‘Here’s your work area, go figure it out.’ But there’s also some good ideas that surface in these sessions because our workforce feels comfortable to communicate with the leadership.”
In recent years, he adds, Braun has “flattened” its management structure between management and hourly employees to enhance teamwork and encourage feedback. “We used to be a shirt-and-tie company,” Gudenburr says. “There was a line: The front office and the back of the factory. We don’t want anyone on our team to think that way.” As a West Point graduate and former U.S. Army officer, Gudenburr says he encountered a similar divide between enlisted soldiers and commissioned officers. “Often in the service, West Point graduates and officers alike are judged (at times fairly; at others unfairly) by their subordinates before they were afforded the opportunity to establish themselves in the unit. When I served, I rarely wore my class ring as I never wanted anyone to judge me on anything but my actions, and the contribution that I was able to make to the unit and their ability to execute the mission.
At Braun, Gudenburr and his team apply a similar tactic to working with staff. “We want to be approachable,” he says. “We want our folks to feel like they’re part of the team, like it is their company and their investment portfolio. Our entire organization (including the Werner family owners) realizes that at the end of the day, our success is governed by our people, the tools we provide them and the processes that we operate by. That is the beginning and end all of it.”
While at Braun, we observed two key components in their approach to strategic management. First, there is the process side. This includes the quality-control issues associated with ISO certification, designing safety into equipment, such as their patented safety shuttle system, and other patent-pending offerings. In addition, there are other process-related improvements/ innovations. The other side of the coin is people. That includes the networks of customers, suppliers, TRSA, government and private-sector leaders and how they interact with Braun and its leadership team.
Following the recent expansion of its Syracuse headquarters, the Braun team sees no limit to its potential for worldwide growth, provided that the people and process sides of its operation are working in sync. “You can have the best people in the world,” Gudenburr says. “But if your process fails, you’re going to fall short. You can have the best process in the world, but if you’re people fail, you’re going to fall short. So you need both. Both have got to be aligned.”