“The PM100 Award is a message to our customers that this company is determined to keep them globally competitive.” —Anthony L. Chirchirillo, CEO, Chirch Global Manufacturing LLC
New hybrid business model provides customers with global options
In the late 1990s, Anthony L. Chirchirillo began to see the writing on the wall. At the time, Chirchirillo, who owned and operated manufacturing businesses in Milwaukee, was beginning to see lower-priced products entering his markets from China, Mexico, and elsewhere. Chirchirillo knew it was just the front edge of a wave that would make it difficult for his companies to compete—unless he fundamentally changed the way he did business. So, that’s just what he did.
Chirchirillo sold those business in 2002 and formed Chirch Global Manufacturing, a company built from the ground up on a hybrid onshore/offshore manufacturing business model that allows customers to choose between high-quality stamped metal parts designed and manufactured in the U.S. or China. The strategy, supported by cloud-based technologies, has enabled Chirch to survive and grow through the recession. It also earned Chirch recognition as a PM100 Award winner for 2011 in the Business Model Mastery category.
Chirch’s hybrid business model allows customers to select, through Chirch, to have stamping and/or die tool development performed in China. Chirch forged partnerships with plants in Shenzhen that are able to create the labor-intensive progressive die tools for less than Chirch or other Western manufacturers. The hybrid business model lets customers source lower-cost but longer-lead-time die tools from China or somewhat higher-cost tools from Chirch’s McHenry, IL, plant.
To support the new model, Chirchirillo embraced several cloud-based technologies. From Chirch’s headquarters, its highly trained tool and die makers keep close tabs on operations in Shenzhen using video and Web-enabled conferencing tools such as GoToMeeting and Skype. Once a week, die makers video their progress. The video is reviewed by Chirch’s journeymen, who recommend improvements.
The company has also used cloud-based technologies to streamline its internal processes. In late 2009, the company became a beta site for Epicor’s Express software-as-a-service ERP platform. The system provides all of Chirch’s employees, from traveling executives to plant operators, up-to-the-minute visibility into open sales orders, due dates, quantities, finished and on-hand inventory, and ship-to locations.
To date, Chirch’s hybrid business model has produced promising results. Sales grew more than 17% between 2009 and 2010, while the company’s return on equity (EBITDA) exceeded 50% in 2010.
And, says Chirchirillo, the PM100 Award “is a message to our customers that this company is determined to keep them globally competitive.”