By Tim Heston, Senior Editor
The story of Schott Gemtron Corp. and Inte- grated Metal Solutions LLC is a case study in business adaptation. Both can trace
their roots back to a Sweetwater, Tenn., plant
that in the early 1970s made control panels for
kitchen ranges. From here the company branched
out into other products, many of which included
both metal and glass components, most of them
for the appliance industry.
Over the years the company ownership changed
until 1989, when Schott Gemtron became a joint
venture between Schott Corp. and AGC, two major players in the glass business and other sectors.
Schott Gemtron’s headquarters remained in Sweetwater, but over the years the organization opened
plants in Indiana, Canada, and Mexico.
Many of the glass products it produced required
metal components. So by the turn of the century,
managers decided that it made sense to bring
metal fabrication in-house (see Figure 1). So in
2000 the company opened its own metal fabrication division in Madisonville, Ky., complete with
laser cutting, punching, stamping, manual and robotic welding, stainless steel finishing and polishing, powder coating, assembly, and packaging. ;e
plant served both as a sheet metal parts supplier
to Schott Gemtron plants and as a contract metal
fabricator to a few external customers.
;e Madisonville plant operated pretty much
as an independent organization. If another Schott
Gemtron plant needed a new part, engineers and
estimators in Madisonville would put together a
quote, suggesting improvements to reduce costs.
;e Schott plant then would move ahead with a
purchase order.
As Mark Brower, director of finance, recalled,
“Even though we were part of a larger corporation,
we were treated as a separate entity. So we still
viewed [Schott Gemtron] as one of our customers.”
;e metal fabrication division needed to meet
certain revenue and margin goals set by the corporate parent. But day to day, when it came to the
actual process of quoting work and scheduling jobs,
the Madisonville facility e;ectively operated like a
contract fabricator—just one with a large internal
customer.
;at’s why, according to sources, the management buyout of the Schott metal fabrication division was, for many employees, a quiet a;air. Corporate executives approached division managers
about a potential buyout early last year.
;e buyout deal, which included a long-term
supplier agreement, gave Schott Gemtron a reliable source of metal fabricated components it still
required. It also gave managers at the Madisonville
plant the freedom to grow as a contract metal fabricator. So on Nov. 1, 2012, the buyout transaction
closed, and Integrated Metal Solutions (IMS) LLC
was born.
Transitioning to become an independent enterprise did call for major changes behind the scenes.
First, managers needed to set up systems and processes, especially in the front o;ce, that previously
were handled by the corporate parent. Second,
they needed to change the shop floor to prepare
for a growing business. ;ird, they needed to start
to analyze what they had—their capacity, capabilities, and core competencies—and use that data to
help grow the business.
Cloud ERP
;e day IMS launched as an independent and now
much smaller company, managers initiated policies
to make the transition seamless. To accomplish this,
they worked to launch various front-o;ce func-
tions, like accounting and HR, previously handled
by the corporate parent. ;e company could no
longer take advantage of their corporate parent’s
size when it came to benefits like employee health
care, though the increased benefits costs were miti-
gated by the fact that IMS, as a small business, now
had a lot less overhead.
But what about information technology? IT is one
of the most e;ciently scalable business tools out
there. Under Schott Gemtron, the metal division
logged on to the corporate parent’s enterprise resource planning (ERP) system, and all data was o;-site on a central server. Considering this, it’s no surprise that IMS managers chose a similar approach
by going with a cloud-based ERP system. ;e Epicor
system the company chose operates o; of a remote
server managed by the software vendor.
;is cloud-based, software-as-a-service (SaaS)
approach has become more common in recent
years; and on some levels it makes a lot of sense
for small businesses, and this now includes IMS.
“We just didn’t want the overhead that came with
having the hardware on-site, and having to worry
about hardware issues and systems going down,”
said Brower. “We were essentially running a cloud-
based system before, running o; of the server
hardware at [Schott Gemtron’s] corporate head-
quarters, so continuing with a cloud-based system
made a lot of sense to us.”
“It allowed us to focus on our core business,” said
Alan Dockrey, company president.
“About six weeks before we went live, our materials manager and I got a hold of the software,”
Brower said, “and we started transferring the data
and got everything set up with the new ERP system.
We went live the day the buyout closed, on Nov. 1.”
More Floor Space
Before the buyout, the metals division shared a
space with Schott Gemtron’s glass doors division
in another part of the factory. ;is made sense because many of the company’s doors called for met-
Figure 1
;e plant at Integrated Metal Solutions (IMS) has had
laser cutting capabilities since 2000, even though the
company is only a little over a year old. Previously part of
Schott Gemtron, IMS struck out on its own in November
2012.
“The name and the
ownership changed.
And we have a new sign
out front. But the people,
and their expertise,
are all still here.”
—Alan Dockrey, Integrated Metal Solutions LLC
quiet transition
Schott Gemtron metal fabrication
division goes independent,
with little fuss or fanfare
