Jan 24, 2008

Breaking the market constraint

If you’ve read “The Goal,” you may remember the part where the people have created enough capacity that they need to look at the next step, the constraint in the marketplace. This is where a lot of lean manufacturers are now, especially as the many markets are severely constrained. In “The Goal” the people go visit their customers, get a better view of how they work and think, and go back and improve their product.

In the case of Tarter Gate in Casey County, KY, the marketplace constraint was growing competition from Asia for their tube-formed livestock enclosures and related products. That prospect put the handwriting on the wall for the Tarter family. It wasn’t just their company at stake. Casey County is a rural area and there aren’t many opportunities for local people to find other jobs. An Osh Kosh B’Gosh apparel factory had already closed. The Tarter family had lived and farmed there for generations, and hundreds of employees and their families – their neighbors – would lose the income that fed and clothed their families if Tarter Gate failed.

Though they didn’t start by calling it “lean,” the company had been focused on continuous improvement for some time. Their retail customers aren’t required to order truckload quantities as they are by other companies, and can count on 7-10 days lead time. The products themselves are high-quality and well-suited to the needs of farmers – the Tarters still operate a cattle farm themselves. But none of that counts if you don’t get the orders.

So the Tarter family engaged The Idea Farm, a marketing agency in nearby Danville (which founded by Daniel Boone, if you care to know), to find out what decision makers in the retail outlets consider when selecting merchandise for their stores. They found out that buyers and store managers didn’t see much difference between Tarter Gate and other manufacturers. Their customers weren’t coming in looking for Tarter products. That left the company vulnerable to price-based competition. The answer was to rename their products lines, in marketing lingo, “rebrand” them, to make them stand out to different types of farmers.

Now the Kentucky Bluegrass horse breeders can choose innovative horse feeding baskets from the Tarter Equestrian World line. Keeps the hay from getting soggy and it’s easy to clean. (Don’t you just hate soggy hay?) The American Farmland 10-ft heavy-duty grain feeder is stackable and can also be easily joined to more units to create as long a trough as the farmer needs. The Billy Goat Gruff Goat Gofer cage fits in the bed of a pickup truck and is designed to transport those “cunning escape artists.” Customers are also using the Gofers to transport dogs and game. (Hmm…maybe it’s a way to control those two black Labs that are chewing the furniture when you’re not home. They looked so cute when they were puppies, didn’t they?) Terrain Tough/Hunter’s Specialties are also helping to capture customers.

The new product line identities allow Tarter to effectively use advertising to support retailers by getting end-user customers into their stores. Tarter Gate has expanded. They now have a facility in Utah to better serve customers in Western states. They took over the Osh Kosh B’Gosh factory and fully renovated it to make it suitable for lean manufacturing of 28 SKUs of 3-point equipment. (I really don’t know what that is, but it sounds very high-end to me.)

Tarter Gate took home the 2006 Manufacturer of the Year by the Kentucky Association of Manufacturers. They are sponsoring a Kentucky Farm Bureau Excellence in Agriculture program that helps young farmers improve livestock genetics, facilities and production systems. Tarter also was named 2006 Vendor of the Year by the Do it Best Corporation. Jay Brown, VP of merchandising for Do it Best, said that Tarter Gate helps member stores stay profitable and never stops looking for new ways to provide products and services that help member stores set themselves apart from their competition. Sounds like customer focus to me.

Tarter Gate’s success and renewal has special meaning for me. Although my great-grandfather moved on from Casey County, our family was among the original settlers in 1796 and founders of Casey County a few years later. My family helped build some of the roads the Tarters and their employees may use today. My grandfather’s grandfather served in the War Between the States alongside Tarter family members. My grandfather spent his summers on his granddad’s Casey County place, and never lost his ties to the area. It wouldn’t surprise me to have some third- or fourth-cousins among the workers in the plant. That the Tarter family stayed on in Casey County and became a mainstay of the community is good news. Thanks, guys.

No comments:

Copyright @ 2005-2014 by Karen Wilhelm