Manufacturer Uses Multiple Tools to Compete in Global Market

Company Profile
The General Machine Company of New Jersey (a name later shortened to Gemco) opened its doors in 1916 as a general machine shop. Its clients were companies in and around Newark, NJ. In the 1930s, John L. Muench, Sr. was at a local government arsenal when he was asked about a safer machine to blend gunpowder. In response he created the double cone tumble blender that resulted in a patent being issued.  That blender changed Gemco from a job shop to a company that developed product lines based on customer’s needs and requests.

Gemco remains a privately held company, with Mrs. Casey Muench Bickhardt at the helm. This award winning company employs thirty-one in its modern 55,000 square foot facility in Middlesex, NJ. The company is computerized from its computer aided design (CAD) in engineering to its presentations and proposals.  Gemco provides innovative custom equipment from proven concepts and component designs. The company’s seasoned management team is committed to meeting its customers’ needs which has resulted in an extensive base of repeat customers ranging from fortune 500 companies to small start-ups that rely on its technology, support and craftsmanship.

Situation
Gemco was facing two challenges— getting higher level candidates for job positions and reducing quote and order turnaround time. After investing heavily in equipment and software it was time to invest in its people…training them to maximize the return on its equipment and software investments.

NJMEP and Gemco have worked together for years so when. Mrs. Bickhardt was ready for educating her people she turned to them again for training in the software, Profit Key and Super Office.

Solution
After discussing Gemco’s challenges, NJMEP made two recommendations directed at cost saving while achieving its objectives.  First, applying for a Skills4Jersey grant to help reduce training costs and second, utilize the R & D Tax credits that are available to manufacturers that would improve tax saving and improve cash flow.

The grant was applied for and information collection began for filing for the credits.

Once the grant for training was approved NJMEP brought in specialists in the new software. ProfitKey provides manufacturing ERP (Enterprise Resource Planning) software for small to mid-sized companies, which is designed to increase efficiency; specifically, in the areas of shop floor scheduling, communications, inventory management, labor reporting, cost tracking, and more. SuperOffice is a CRM designed for Small Business.  Together these programs would help Gemco improve its competitiveness and attract higher level job applicants.

Thirty-one employees ranging from Chief Executives to Production Laborers received training in the software.  Mrs. Bickhardt explained, “Our skills have improved nicely with the SuperOffice training received on this grant. New & existing companies, contracts and projects are being managed more effectively with less man power.  Our shops are being planned, scheduled and controlled more accurately and with less manpower as a result of the Profit Key Custom Manufacturing system training.  We expect business growth to follow with all this training which will enable us to hire more employees to keep up with the anticipated growing demands.”

In regards to the R&D Tax Credit filing, NJMEP’s Technical Services group worked with Gemco and their staff to establish a comprehensive list of qualified research and development activities for each of the tax years.  Then its Financial group determined all qualifying expenses (wages, supply expenses, and contract expenses) attributable to the identified research efforts. This process involved collecting various types of contemporaneous documentation, including W2s, vendor invoices, etc. that were used to calculate final figures relating to the IRS and State tax credits.

All material was reviewed with Gemco and then final documentation, which included a description of the overall R&D process; a Project Summary Table covering all of the qualified projects, Project Description(s) i. e., the Final R&D Tax Credit Study was presented.

Results
These two recommendations resulted in a number of benefits:

• The company saved $31,000 in implementing their new software as a result of the training grant.
• Saw an increase in sales of $20,000
• Quote turnaround time has been reduced to 15 mins.
• Achieved an overall savings of $49,000 due to its first R & D Tax filing.

Implementing the new software has resulted in attracting better job candidates that has resulted in one new hire

When asked about working with NJMEP for the grant Mrs. Bickhardt reported, “The NJMEP was and continues to be a great source of support to General Machine Company.  They assisted us with this grant from beginning to end.  We will continue our relationship with the NJMEP and will recommend them to other NJ Manufacturers.”  She then added, “We also worked with NJMEP on securing R&D Tax Credits which have been very beneficial to the company.  We’ve now filed for 4 years and have been able to reinvest those dollars back into the company to help it grow.”