Reshaping A Company Through Internet Technology

In 1998, Philadelphia Gear Corporation, a century-old gearing and power transmission manufacturer, conducted a business evaluation of its operation to determine the long-term profitability outlook for the manufacturing segment of its business. Founded in 1892, Philadelphia Gear had developed a reputation for manufacturing custom gearing solutions for the growing industries of the United States. However, as foreign competition continued to reduce the profitability of the once lucrative American gearing industry, the company faced a crossroads—should it continue to focus on manufacturing, or should it shift company efforts toward more profitable after-market services?

The choice was a clear one.

A Strategy For The 21st Century

Switching to after-market service meant a complete change in Philadelphia Gear's business efforts. This new focus was comprised of six services:

• Sale, inspection, repair and upgrade of gears
• Program business
• Renewal parts
• Technical services (field service and evaluation)
• Enclosed drives
• Open gearing (custom manufacturing for others)

First and foremost, the change required a significant investment in facility upgrades. As a manufacturer, Philadelphia Gear could concentrate operations in a single facility—shipping units across the globe as they were completed. But focusing on regional maintenance and repair required the ability to provide comprehensive service in a timely and customer-focused manner. To achieve the national coverage needed, Philadelphia Gear opened two facilities, with new regional service centers in Delaware and Alabama joining already in-operation facilities in California, Illinois and Texas. This strategy brought the company closer to its various customer bases, all working in conjunction with the Engineering and Technical Center, located in Norristown, Pennsylvania. The expansion gave Philadelphia Gear the unique advantage of being the only national gear manufacturer to provide such regional service.

Despite these extensive changes, Philadelphia Gear maintained two important strengths that would serve it well in its new capacity—one, a reputation for innovative power transmission solutions; and two, a century-plus worth of gearing knowledge and expertise, cataloged in more than a half million technical paper drawings. This data included technical drawings, bills of material, customer information (dating back 108 years), company forms and documents, and informational "tool kits" on Philadelphia Gear products and services.

Meet A New Set Of Needs

While this extensive collection of drawings, engineering standards and manufacturing process standards gave Philadelphia Gear an advantage over other after-market service providers, accessing this information in a quick and timely manner—by both engineers in Norristown and Philadelphia Gear representatives across the globe—was more important than ever.

With this need in mind, Philadelphia Gear began the process of converting all 600,000 paper product and sales documents—containing critical sales and service information—into scanned digital images, to be available to all employees via a password-protected Intranet browser. These digital files were cross-referenced in several ways, allowing for easy access. This was a major change for the company; it replaced two filing cabinet-filled warehouses full of drawings and product information going back to the early 20th century (as far back as 1916). Overall investment for the conversion was approximately $1 million.

Before the conversion, it would take multiple engineers as many as 2 days of searching to locate such information (provided they were able to locate it at all). For employees in the field, getting the information they needed was an even more time-consuming process—taking up to 4 days or more to process a request. Requests for information were submitted to Philadelphia Gear's Norristown office via fax to be fulfilled.

The time saved from the conversion (now measured in minutes rather than days) has allowed for faster service to Philadelphia Gear customers—a competitive edge for an after-market service provider. Finding necessary documents so quickly leaves engineers with newly found time for product research and development. Plus, the change is even more significant in the context of Philadelphia Gear's global service goals. All important product information is now centralized online, allowing employees to have access worldwide, and enabling them to correspond and/or exchange documents in a matter of seconds via e-mail. Another benefit of the technology is the facilitation of productive information exchanges between the Norristown facility and its assorted vendors and licensees.

"The technological upgrades in regard to cataloging our technical data made it possible for us to provide regional service unimaginable prior to the conversion," notes Jules DeBaecke, general manager—marine program business unit, Philadelphia Gear Corporation.

Making this information easily accessible has helped Philadelphia Gear achieve savings in both human resources and time. Plus, the system helps ensure the accuracy of data used in sales and part maintenance. Employees can cite information they may need in a repair, rather than speculating—especially important for manufacturing replacement parts, where any inaccuracies can mean the finished product does not meet customer requirements. The new system allows sales representatives to put quotes together more effectively and accurately, and to respond to prospects more quickly.

Estimates are that this conversion will ultimately save Philadelphia Gear 7 to 10 man-years of labor within the first 24 months of implementation. "The return on investment made the decision a no-brainer," says Mr. DeBaecke.

Plus, converting these drawings to digital format has allowed Philadelphia Gear to identify only the information important for the service and maintenance of the more than 300,000 Philadelphia Gear units currently in the field—allowing employees to access only the information they need, when they need it. The initial success of the conversion has prompted Philadelphia Gear to undertake converting documents from the recently acquired Western Gear as well—90 years of proprietary drawings and information.

Web Support For Customers

Today, Philadelphia Gear is further using Web capabilities to increase the productivity when providing replacement parts for customers. Via the company's new Web site, www.philagear.com, end-users in need of such parts are able to sort through available technical drawings online, and submit those drawings that best fit their part (along with important background information) to Philadelphia Gear's Engineering and Technical Center. Submitting this information is an important first step to developing a parts replacement quote in the timeliest manner.

Philadelphia Gear has also created a Web-based request form for customers looking to acquire technical drawings of Philadelphia Gear units, including outside dimension drawings, layout drawings and mass-elastic drawings (high speed drives only). Such drawings are important for the everyday maintenance of Philadelphia Gear gearboxes and power transmission units, and they had never been converted to digital format prior to the development of the site.

The melding of a century-plus of technical know-how with innovative Web-based solutions has allowed Philadelphia Gear to make a smooth transition from manufacturer to service-provider. Mr. DeBaecke comments, "I honestly believe we are ahead of the industry on this. Most gear manufacturers are still doing business with outdated business models that are inefficient and unprofitable. The Internet is revolutionizing how we do business and helping us serve our customers better."

To contact Philadelphia Gear Corporation, call (800) 766-5120 or visit www.philagear.com.

About the author: Richard Chrzanowski is director of customer service and field support, Philadelphia Gear Corporation. The company is headquartered in Norristown, Pennsylvania.