Case Study: United Granite and Marble Company (UGMC)

UGMC is supplier of natural stone like granite, marble, limestone, and travertine for high-end homes. Their team of nearly 200 is responsible for every step from acquisition to design and fabrication; completing more than 18,000 installations and remodels. Over the past 20 years they have become one of Southern California’s premier sources for custom kitchen, baths and living area flooring.

TRADITIONAL CHALLENGES
UGMC is no stranger to the struggle to drive sales in a hyper-competitive market. However, in recent years they’ve found themselves facing a new challenge: Increasing capacity to keep up with exponential growth. In the manufacturing world, that means a spike in operating costs and a subsequent squeeze on cash flow. UGMC needed to increase efficiency, hire more employees and improve plant infrastructure, but was unsure how they wanted to finance that growth.

Bruce Feaster, Executive Vice President at UGMC, clearly voiced his concerns, “We need to bring on a more seasoned quality assurance team, upgrade the skills of our current staff and expand our facility. But the cost is going to be a big blow to our budget and productivity.” While the UGMC executives had access to vast banking resources, they were more interested in exploring alternative ways to fund initiatives.

INNOVATIVE APPROACH
Quovus was brought into the discussion. While most other firms they spoke with offered tax credits that would impact their future viability, and loans with extended repayment schedules, we saw the ideal equation differently. We needed to understand their situation and find a solution that incorporated short term funding that was both substantial and repeatable without throwing off their balance sheet. Within 72 hours a UGMC was matched with state sponsored offset funding to bring in their preferred professional expertise and industry specific endowments to help pay for staffing growth and development.

The two phase implementation allowed UGMC to realize an amortized cost savings of nearly $350,000 in three years. The new factory design has reduced lead times from twenty two days to nine and improved on-time delivery by 21%. In addition, the refined manufacturing processes will continue to allow the company to realize additional profits generated by a 18% increase in productivity.

CONCLUSION
Dave Yaghjian, president of UGMC, put it best in his reflection on our work with them, “We were a $20 million business on our way to $30 million. Our company required infrastructure design and internal systems improvements in every department if we were going to get there. We are very fortunate that Quovus offered UGMC a program that enabled our company to manage the rapid growth. They helped offset the cost of the consulting, training and process improvement services we required. We are extremely pleased with the results of the program and would highly recommend this process to any business owner.”