Loading ...
Scott Reeve, President of Composite Advantage
Scott Reeve formed Composite Advantage in 2005 after working several years with such organizations as the National Composites Center (NCC) and Lockheed Martin. The Dayton, Ohio-based company is a manufacturer of structural composite products, bridges and bridge decks in particular.
How have you been affected by the economy?
We haven’t gotten as much growth as we were hoping. Obviously being a newer company, we had a lot of growth plans, which has slowed down 25 to 30 percent less than where we expected to be. We also work a lot with infrastructure and construction, and with the economy there are times where those projects are delayed or take additional time. The delays don’t have anything to do with FRP, just that big projects sometimes get delayed. We’ve had a few bridge projects that have been delayed out anywhere from six months to a year. A big negative with the current economic condition is that it’s hard to get work quickly to fill in for any work that’s delayed.
Have the percentage of composites usage changed?
When the economy was running hot, the price of steel was steadily going up, which was making things look a lot better for us. But since the economy cooled down, steel prices are back to where they were before. When things pick back up, the prices of traditional materials will rise faster than ours, which will help.
How do you improve efficiency?
Because our supervisors are a little less busy than they were before, they spend more time looking at the details to make sure we are planning and allocating people in the right places. When you’re really busy and you have a lot to get out the door, you’re moving faster and as a result may create more waste. Now that we’re not moving as fast, we’re making sure we have people in the right place and sure we have the flow down correctly, especially since we do custom work and have more time to lay plans out as efficiently as possible.
How do you work through lag time?
Through cost control and marketing a little harder to sell some of our derivative products that have a shorter cycle time. Because we mostly manufacture larger construction products, there’s a longer sales and project cycle. We’re putting more emphasis on some of our products, applications and places our products can go that have shorter cycle times. In a lot of cases, those won’t be as large as our construction and infrastructure projects from a revenue standpoint, but they’re ones where we can get a little faster reaction and acceptance.
Can you elaborate on how you’re implementing cost control?
The biggest way is through implementing lean manufacturing and monitoring how efficiently we are inside the shop. Using distribution companies allows us to keep our raw materials inventory down fairly well. Also, because of the economy, the raw material prices have become more competitive between suppliers, forcing us to look at alternate suppliers.
Are some markets more hesitant about composites?
Generally, I find people are willing to listen but they have difficulty with the price. With our costs being more than traditional materials, we have to have real compelling reasons for them to use composites. Usually that means looking for where and what the customer really needs and center on his problems, because if there isn’t a problem, the customer isn’t going to spend more for the benefits.
What do you think needs to change for the industry to grow?
From the composites side, we still need to keep looking for the applications that are out there where we can offer value to the customer and not just bid on the same jobs. Our big focus is to find the places where we can help solve problems for our customers that are currently using steel, wood or concrete by demonstrating what we can do and in order to help customers slowly learn that the best and correct ways to use composites. The construction trade is used to nailing everything together. You’re not going to nail our things together, so it’ll take a shift in perception.
What other factors do they consider?
Generally, price is number one, number two and number three. Because people aren’t familiar with composites, it is a little bit of a barrier on top of the fact that they also have to pay more for it. When composites end up being a similar price or lower price, the customers become familiar really quickly. When it means something to them from a cost savings or revenue or profit generating point of view, any bias towards materials goes away fast.
What are you looking forward to in the upcoming year?
We’re looking forward to things picking back up. From my point of view, it’s going to be like things were on hold for a year and I’m hoping things will pick back up. There seems to be an increase in the amount of quotes and interest level, we’ll just have to see when those really result in orders.
How will you know when things have turned around?
When we’ve picked up enough work and start hiring people, because in general I think most companies are trying to hold on to a core staff, but they have excess capacity. So the first thing that’ll happen is to get enough folks so everyone is productive and you fill your current capacity.
To subscribe to CM’s weekly Q&A, click here.
