Issue Spring 11
What began as one man’s ingenuity to find an easier way to mount heavy television sets in hospital rooms has evolved into a global medical technology positioning corporation serving the industry’s largest medical device manufacturers, as well as hundreds of smaller, start-up companies around the world. GCX Corp.’s success can be linked to its relentless commitment to quality and its solid supply chain, which enable the Petaluma, Calif., company to provide exemplary customer service, says Cris Daugbjerg, vice president of sales and development.
Founded in 1971 by Gary Gilbert, GCX got its start by developing a novel vertical wall track system that allowed hospital room TVs to be safely lowered, serviced and returned to their position. It continued to serve the wall mounting needs of its healthcare clients, gaining a reputation for producing high-quality, sturdy components that were CNC machined from aluminum extrusions.
As medical devices and computers became smaller and more interactive, the company branched out into mobile carts, stands and wall-mounting systems with greater ergonomic adjustability. In addition, GCX produces components for shop floor applications, such as putting computers on a production floor. “For GCX, durability is a fundamental characteristic of our products, and it really sets us apart in the market,” Daugbjerg says.
“ISO 9001 is a baseline,” he notes. “IEC 60601 is a basic safety standard for electro-mechanical devices, and we take that as an absolute minimum threshold that all of our products need to pass to be suitable for healthcare. In addition, our quality system is audited at least once on a monthly basis by our OEM customers. We use these audits as an opportunity to take fresh looks at our quality system and better understand our customers’ regulatory environment.”
Source Globally, Build Locally
To better serve its clients, GCX has warehouses in Petaluma, Calif.; El Paso, Texas; Albany, N.Y.; Milwaukee; Tilburg, The Netherlands; and Taipei, Taiwan, to either assemble and/or distribute product based on demand. By shipping parts to warehouses near its customers, GCX has the option to build or not build a finished good depending on demand, for just-in-time delivery. “It’s less expensive for our customers, for one thing, but not surprisingly, that lower cost is well aligned with minimizing our impact on the environment,” Daugbjerg says.
Having multiple warehouses around the world also allows GCX the flexibility to customize its products to meet a particular customer need. For instance, a mobile healthcare equipment cart is comprised of the same parts, but it might need to be a different height to better serve non-U.S. markets. As another example, Europeans tend to prefer that their carts have four swiveling casters, but in the United States, customers prefer two fixed casters.
“By assembling locally, we address some of these local preferences efficiently,” Daugbjerg explains. “For the volumes that we serve, we have to do this to maintain component economies of scale and keep costs low for our customers.”
A recent focus for GCX, he adds, is its release of new generation mobile products to the market. As medical equipment technology continues to evolve and hospitals replace old systems, hundreds of carts are rendered useless, thrown away and replaced with new ones. “This is terrible from a cost and waste point of view,” Daugbjerg remarks. “So, we created a core cart where the column is height adjustable and designed to last 10 to 15 years. You can install different modules into it as your computer hardware and applications change over time.
“The fundamental of how we run our business is to start with the customer and work our way back,” he continues. This is a term coined by GCX President John Kruger. “This is stated by Mr. Kruger often and applied in many situations,” Daugbjerg says. “It permeates our market development and operations planning. We have many smart people in our organization who have a surprisingly intimate understanding of what our customers want and how that translates to their job – it is one of GCX’s most valuable assets.”
‘Funnel’ Hybrid Production
Because its geographical territory is so dispersed and its product line and volume demands are so diverse, GCX operates a “funnel” hybrid planning system, Daugbjerg describes. Some parts require forecast and early commitments and must have long-term purchase orders in place due to production lead times. “But the way we manage this is to constantly change those projections and the associated build plan at the finished goods warehouse,” he explains. “This requires a constant review process, constant refinement and customer input.
“We have the components in place to build the final product when the customer needs it, but we won’t exercise all of those options while the projections and work orders are being defined,” he continues. “When we get to the actual work order date, we’re only building what the customer needs. We found that this frees up an enormous amount of capacity at that build warehouse.
“This gives us the time to focus on customer orders and be responsive to their immediate needs,” he adds.
The company’s planning information is visible across its supply chain.
“Having a single view for all the ins and outs of a part number creates consistency,” Daugbjerg says. “Everybody in our organization and our key suppliers are familiar with it, so we all speak the same language and use the same planning methodology. That dashboard is something we developed largely in house, and it gives us a good window on the state of any given component or finished good. Citrix allows for real-time information anywhere, so anyone in the world can log in to our enterprise resource planning system and view everything on the demand side, as well as on the supply side.”
The main challenge for GCX is to not look at these plans as permanent and to accept that it would have to review and refine these projections on a daily basis.
“It sounds overwhelming, but it’s not,” Daugbjerg confides. “Once you focus on daily sales activity and understand your customer’s demand, it gives a clear focus to the whole organization. We simply aren’t building or inventorying components or finished goods that aren’t needed.”
Global Expansion Plan
As part of its growth strategy, GCX intends to expand further into Asia utilizing a similar approach from when it entered the European market several years ago. “Once we had our own sales and support function, and building and shipping systems implemented there, we saw significant growth,” Daugbjerg says. “Some companies will enter a new market and consider changing their fundamental strategy, but often some of those strategies that are successful in the United States can help contribute to success elsewhere.
“America has a very high expectation of service, and applying elements of our service strategy plays extremely well in Europe and Asia,” he continues. “Not all markets have that same service expectation, so using those fundamental aspects of our business and applying them to customers in Europe and Asia offers a significant competitive advantage.
“We’ve certainly seen that in Europe – customers are very pleased by the level of service we provide relative to some European-based vendors,” he notes.
The company anticipates similar success in Asia. “A lot of companies will go to Asia, give a shop a purchase order and drawing, but never actually go there to see how something is being made,” he states. “Before we even did business in Asia, we traveled there and explained what kinds of shops we were interested in using, which ones we weren’t interested in using and why that was. In the process, we’ve built real relationships over there.
“Nowhere are relationships more important than in Asia where, culturally, people place a huge value on long-term thinking. And we now have vendors and employees in Asia who completely understand what we expect from a quality point of view.”