Enterprise Minnesota Magazine - December 2010

HELPING MANUFACTURERS GROW PROFITABLY

Housing Slump Success

Thermo-Tech Windows and Doors expands its sales team and market region to achieve growth throughout the recession.

For many manufacturers, recent sales to the flagging construction industry have been a challenge. In October, the U.S. Department of Commerce reported that residential construction starts are down 73 percent from the January 2006 peak. But Sauk Rapids' Thermo-Tech Windows and Doors has achieved continued success, realizing increases in sales revenue and revenue per employee each year since the recession, thanks to a proactive approach spearheaded by CEO David Kochendorfer.

Instead of simply surviving the recessionary storm, Thermo-Tech continues to make investments in the down market to increase market share. It added six salespeople while broadening its customer base from lumberyards and distributors within Minnesota and along its borders to a nine-state area. Today, about 50 percent of its customers are from outside Minnesota.

While an expanded market region means that more potential customers are familiar with the Thermo-Tech name, Kochendorfer also credits its continued success on Thermo-Tech's highly energy-efficient products and the companywide dedication of its team members to fully meeting customers' needs.

"We look for opportunities to solve customers' issues and provide solutions," he says. "We must provide total customer satisfaction, which includes items such as the quality of our products and services and on-time and complete deliveries. We do what we say."

Thermo-Tech offers multiple lines of standard and custom vinyl windows and patio doors, which meet or exceed Energy Star and federal tax credit efficiency requirements. It is also one of about 50 preferred vendors in the U.S. Department of Energy's R-5 Windows Volume Purchase Program, which pairs approved manufacturers with buyers looking to purchase windows in large volumes. The program encourages widespread adoption of highly efficient windows by bringing more business to preferred manufacturers, who already have developed new, even more energy-efficient window products.

To ensure timely delivery, Thermo-Tech continuously analyzes its processes using a combination of lean and the Theory of Constraints, a management philosophy introduced by business management expert Eliyahu Moshe Goldratt in the mid-1980s. TOC involves identifying bottlenecks and constraints throughout the entire business, then focusing on a specificprocess to eliminate the bottleneck to meet customer demand. Continuous improvement initiatives such as TOC and lean have raised Thermo-Tech's on-time delivery by 16 percentage points since 2006.

Kochendorfer is confident that the company will see continued growth into 2011, even if the construction industry remains stagnant. "We would all like to see the housing market increase," he says. "But if the market stays flat versus a decline this next year, we will be pleased."

-- Andrea Lahouze

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