5.0 EDSR 09-08-2008ITEM # 5.
t~ver
MEMORANDUM
TO: Economic Development Authority
FROM: Jeff Gongoll, Community Development Director
DATE: September 8, 2008
SUBJECT: 171st Focused Area Study
Purpose
Provide afollow-up to the August 11, 2008, EDA and City Council workshop meeting
regarding the 1718` Focused Area Study (FAS1~. Affirm the components and scope of
activities that will take place to complete the study.
Background/Discussion
The EDA and City Council has indicated its desire to conduct a study that establishes a
strategy to complement and maximize the benefits of the Northstar Commuter Rail
operation. The FAST will provide short and long range guidelines for new development,
including retail, professional and light industrial, and possible redevelopment opportunities
within the boundaries of the study. The FAST will also help establish expectations for land
uses and design guidelines in and around the Northstar Rail station.
Next Steps
1. Project Boundaries/Information Assembly
• Previous discussion has suggested the following boundaries for this study which
need to be confirmed:
North -175` Avenue
South -165' Avenue
East -Monroe Street (i.e., Elk River Station)
West -Hwy. 10
• Identify property owners.
• Identify current land use.
• Assemble list of vacant/developable property.
2. Scope of Work
• Prepare land use/best use concepts within the study area based on projected transit
oriented opportunities, transit station location and land use goals.
• Determine development and redevelopment potential based on opportunities and
constraints identified by land use scenarios.
- Mixed use projects.
- Transit complementing uses.
• Gateway Business Park:
- Determine land value.
- Recommend sale of individual parcels or entire property.
• Estimate timing of development based on market conditions.
• Identify potential beautification/aesthetic improvements.
• Establish FAST Marketing Plan.
• Complete review with EDA, Planning Commission and City Council.
3. Determine Infrastructure Needs
• Complete utility plan including water/sewer and storrn water costs based on desired
land use.
• Determine wetland mitigation needs and cost.
4. Implementation
• Finalize infrastructure needs.
• Prepare any ordinance modifications.
• Initiate formal marketing plan.
Financial Impact
The results of the FAST will help establish costs associated with the development of the
Gateway Business Park (wetland mitigation, utilities, infrastructure) and ultimately the value
of the property for potential sale for the desired development(s).
Requested Action
Confirm the study boundaries and affirm the scope of activities for completion of the 1715[
Focused Area Study.
Several cities along the Northstar Commuter line have completed their own transit oriented
development study -including Minneapolis, Coon Rapids, Anoka and Big Lake. We intend
to draw from their experience to determine whether to consider hiring a consultant to
complete the study. Any recommendation -including costs and timeline -will come back
to the EDA for review and approval.
~} ~~ ~o~~ t~ I I ~[ ~:}~ ~c~c~.
~n ~c~~ r~~~Y ~~ ~ u~`~~ V'~i..~ e
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Image/Marketing
In follow up to a few of the City Council's priority issues identified in the planning
workshops, "Image" and "Marketing for Commercial & Industrial Development", staff is
awaiting discussion and direction from the City Council and/or EDA and Marketing
Committee regarding the following items relative to staff initiating aggressive marketing
strategies:
1) Identify the city's desired "target market" for specific types of commercial and
industrial development.
2) Identify desired market focus/theme (e.g. Light Industrial Hub, Energy City, etc.)
3) Identify sites for commercial and industrial business park development to maintain a
sufficient inventory.
This discussion and direction may be appropriate during the anticipated joint Council, EDA
and HRA workshops early in 2009 when the Strategic Plan for Economic Development is
developed.
~C~~1C~~~~~- IL C1~~G~
~~~ News: National
•
keel Estate taft~rr~tii°h
October 08, 2008
Written by Sasha M Pardy (spardy@costar.com)
Survey Charts Direction of Store Openings & Closings Among
Major Retailers
Results of BDO Seidman's CFO Retail Compass Survey; Costar Provides Major Retailer 2008
Store Opening/Closing Metrics
BDO Seidman just released the results of its annual Retail Compass Survey of CFOs of retailers with
revenues in excess of $100 million. Despite acknowledging that high fuel costs, the weak housing market,
the upcoming presidential election and rising inflation have taken their toll on consumer confidence this
year, 61% of the CFOs surveyed said their companies recorded the same or increased sales during the
first six months of 2008 as compared to 2007. In fact, for all of 2008, 67% anticipate sales to be the same
or better, specifically projecting a 3.5% increase for 2008. (note: the BDO Seidman survey was conducted
in August and September 2008)
On store closings, 36% of the CFOs surveyed and 57% of the top 100 retailers' CFOs said they will have
closed stores in 2008. However, suggesting the bulk of these closures are only in the normal course of
business, only 33% of the top 100 said 2008 store closings would be up over 2007 -- 50% said the
number of closings would be about the same, while 17% said less stores would be closed.
On a more positive note, 77% of all CFOs and 67% of the top 100 CFOs, said their companies did not or
would not reduce or delay store opening plans in 2008. However, continued credit market mayhem could
have adverse impact on store expansion plans for the remainder of 2008 and into 2009, as 41% of CFOs
said they had seen some tightening of credit from their lenders.
One hint of the impending likelihood of less stores being opened in 2009 is reflected in the table below; as
most retailers have yet to share their 2009 store opening guidance with the public. Some retailers have
already stated they would only open stores in 2009 that were signed off many months ago; this could be a
trend we increasingly see as retailers announce 2009 store opening plans over the next three months.
Costar Advisor compiled the following table from researching the most recent quarterly reports,
transcripts and SEC filings of the top retailers in most major U.S. retailing categories. Key metrics
including the current size of the chain, typical square footage of stores, as well as the number of store
openings and closings in 2007 - 2010 are provided.
In aggregate, the retailers listed in this chart opened nearly 3,000 stores in 2007, and in stark contrast,
the same retailers expect to open approximately 1,800 stores in 2008. The store closing figures are not so
drastically different -- in aggregate, these retailers closed at least 910 stores in 2007; in 2008, that
number is up to at least 1,296 stores (589 of these are from Linens 'n Things' liquidation alone). Keep in
mind however, the 2008 store closing aggregate is conservative, as it doesn't account for the likelihood of
additional Mervyns stores closing, any impending bankruptcy news (possibility of Circuit City, for
example), and in addition, retailers were not quick to publicly share incremental store closing expectations
for this year.
If you would like to receive this table in excel spreadsheet format, please request it via email from the
editor, Sasha Pardy, at spardy@costar.com.
Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.
CONTINUED: Survey Charts Direction of Store Openings & Closings Among Major Retailers
If you would like to receive this table in excel spreadsheet format, please request it via email from the
editor, Sasha Pardy, at spardy@costar.com.
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to Costar's Retail
News Roundup, a weekly column covering retailer expansions and new concepts, store closings,
bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and
sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every
week in the national news and "> retail news sections of our web site, you may also receive the Retail
News Roundup for free via email by requesting to be added to the distribution list by contacting senior
editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to Costar's dedicated Retail RSS
Feed.
Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.
.,
DEPARTMENT ..
Sears 2,110 55 net 25 net+ 134(000'
JC Penne 1,083 50 35 20 1 ~ =?:.000
Kohl's 1,000 112 75 50 I ('~ 0 ',3i)00
Mac 's 816 10 5 6 to 8 180,000
Bloomin dale's 40 2 0 1 0 .:5,000 to 250,000
Dillard's 318 9 4 11 13 172,700
Bon-Ton 281 2 2 4 92,857
Me ns bankru t 176 0 0 0 13 27 to 203 65,000`to 85,000
Nordstrom 159 4 11 7 1 130,000 to 140,000
Saks /Off 5th 101 0 2 4 1 1 111,000 or 28;000
Neiman Marcus 64 5 4+ 1 2 0 0 80,000 to 120,000
~.
HOMEIMPROVEMENT/SUPPLY •.
The Homebe of Stores 1,965 87 36 30+/_ 30+l- 0 15 105;000
Lowe's 1,577 153 120 75 to 85 C 0 113,253
Ace Hardware Private 4,594 54+ 90+
Tractor Su I 814 89 88 fo 93 0 0 1 ~.3?0 tr 1 r_~,~~~~_
84 Lumber 380 0 2 12 52 50,000
•.
BOOKS
~~ •.
~~:
iii
~ ~ ~~
~~: i~~
. - ~
Barnes & Noble 723 31 30 to 35 20 to 25 13 15 to 20 30,000
B. Dalton 73 0 0 0 0 13 12+ 2.000 to 6,000
Borders 518 18 14 8 2 :25;000
Waldenbooks 468 1 0 0 0 75 22+ 3,878
•.
ELECTRONICS
~~ •.
ii:
i~~ ~ ~
~~
~~:
its
Best Bu 973 101... 85 to 100 0 4 20;000 to 45,000
Stand Alone Best Bu Mobile 21 4 0 0 1,500
Stand Alone Geek S uad 7 0 0 5 Likel 2,000
Ma nolia Audio Video 13 0 0 7 Likel 12,000
Pacific Sales Kitchen & Bath 22 5 5 to 10 0 0 34,000
Circuit Ci 714 43 38 to 45 0 to few 4 7 to 10 20,000
Radio Shack 5.883 0 0 0 132 net 48+ °27
Apple 212 2Z, 40' 7, X33
• •.
HOME GOODS/FURNITURE •~
Bed Bath & 8e and 903 66 50 20,000 to 50,000
Christmas Tree Sho s 41 7 12 20,000 to 50,000
Harmon 40 1 1 20,000 to 50,000
bu buVBABY 10 1 "several" 28.000 to 60.000
Tuesda Mornin 842 63 48 37 fo 41 15 16 12 to 16 ` 6,000 to 15,000
Linens 'n Thin s (bankru t) 371 18 0 0 0 0 218 to 589 25,000 to 45,000
Kickland's 323 35 5 to 7 15 to 25 49 35 to 40 15+ 6,300
Williams Sonoma 260 3 23 1 15 7,100
Potte Bam 200 4 15 3 9 16,400
Potte Bam Kids 95 2 3 0 2 9,600
West Elm 32 5 10 0 0 15,300
Cost Plus WorldM'~rket 296 15 15 0 4 18 15,7n0
MAJOR RETAILERS BY CATEGORY -STORE OPENING/CLOSING METRICS
- ..
DISCOUNT DEPARTMENT ..
TJ Maxx 861 26 15 to 20 '30,000
Marshalls 801 28 25 to 30 32,000
Home Goods 301 19 25 net 27,000
A.J. Wright 133 0 5 net 2+ 26,000
Ross Stores` G38 71 72 net - 4 30,000
dd's Disco rv 55 26 5
Burlington Coat Factory 417 19 rr20 -}0 0 30,000
•.
SPORTING+GOODS •~
Dick's S ortin Goods 357 46 43 0 1 56,000
Golf Galax 84 16 10 ~
I 15,000
S orts Authorit rivate 441 33 37 °40 000.
Cabela's 28 8 2 2
y u -) '~~~00 to 125,GCJ
ass. ro of oor or (ovate 52 6 3+ ~ 150,000 :
• •.
GROCERY ~~ ~.
Kro it 2,476 23 70 to 80 43 _ 58 000
Su ervalu 2,474 73 70 to 80 'S '.5,000; 40,000; 60,000
Safewa Incl Canada 1,738 13 - 20 ~9 13 55,000
Publix 937 44 45 ~ ~ 28,000 to 54,000
Sto & Shd 561 10 14+, 25 13+ ~ 50,000
Giant Landover 147 1+ 50,000
Walmart Neighborhood Market 143 00 25 20 to 25 40,000 to 50;000:
Chris Carlson
~~~~ ~ yfounded Sportech, Bnc. out of
«~°~ii`S° his home as an aftermarket recognized
leader in the power sports industry. Worth
over Szo million in sales, the go-employee
company provides thermoformed plastic products
ro internationally known OEMs in the power sports
business. • Carlson recently gave a presentation at an
enterprise Minnesota business conference on supply
chain management at the iJniversity of Minnesota.
Carlsan attributes much of his company's success
to ar. acute awareness of the many "soft issues"
in business and a dedication to preserv-
ingand promoting a clearly defined
company culture.
E~t~rprise il~innes®ta. The soft issues are of-
ten overlooked in business, yet you freely point
to them as key advantages for Sportech. Tell us
hour you have approached this through the }'ears
and why it's been a priority for you.
`"p° I've never really liked referring to them as
"soft issues," because "soft" implies that they
are insignificant. The reality is, I can't thinl: of
anything more important than the culture that
we've created and maintained through the years
at Sportech and our approach to mane- of the
soft issues we face on a daily basis. From the
very beginning, we've tried to build the com-
pany with an operational philosoph`, which is
grounded in integrity, and we've used this as a
basis for creating our culture. We have always
placed a priority on the hiring process, and
z6 ENTERPRISE MINNESOTA SEPT/OCT 2008
CC: Most manufacturers today are trying very
hard to establish a clear point of differentiation
with their customers, and product innovation is
an obvious area of focus. At Sportech, we like to
think of ourselves as a wildly innovative, creative
company. But our cultural strengths are just as
important as our other advantages-including de-
sign, delivery, quality and price. We believe that
our strongest customer relationships have been
built largely with trust. If our products, services
and prices are equal to those of our competitors,
but the customer is more comfortable with us or
trusts us because of our corporate values or our
approach to business, we'll get the job every time.
I also believe that most companies want to work
with suppliers of integrity, where the people un-
derstand right from wrong and where they'll give
you honest answers, even when it's difficult to do
so. The value that a culture of integrity brings to
a supplier/customer relationship is vastly under-
estimated by most suppliers today.
we've tried to build a team with people who
share common values and who are passion-
ate about our industry. My hope was to create
a culture that would eventually become a real
statement about who we are as a company.
Culture is one thing I've really tried to keep
constant through the years. As the company
has grown, my role has changed and I've been
forced to delegate or "let go" of a few things-
which is pretty tough for Type A's like me to do.
But I've maintained control of the corporate
culture piece, and it's one area that I won't let
go. I really believe that culture is a top-down
commitment; it has to start with me and I'm
accountable for maintaining it.
Enterprise Minnes®ta: You said that you be-
lieve that one of the key advantages that Sportech
has in the marketplace is its culture. How so?
Enterprise t~linnes®ta: Why is it important for
a business to align its culture with the culture of
a potential OEM?
~~.: If you have built your company's culture
on integrity, then I think it's important to try
to align yourself with an OEM that has similar
values, because if you go into a situation with an
OEM that doesn't share your values, you could
be entering into a no-win situation. Nearly all
companies make some kind of a statement which
portrays them as a company guided by integrity,
but in some cases this philosophy doesn't always
get carried through to the everyday operation
of the company, and that's fine. We have been
blessed at Sportech to work with some great
OEMs with cultures centered in integrity,
and working with them has actually made our
culture stronger. The question is, are you pre-
pared to do business in a setting where there's a
possible misalignment ofcultures-where your
values are vastly different? And of course this
goes both ways-if you've struggled with your
own internal culture and you are not sure if your
whole team fully represents your values, are you
prepared to engage with an OEM with a strong
value system and a history of doing business as
a company of integrity? Either way, it's a recipe
for disaster.
Employees Michele
Zeller (left) and
Narene Pouv
(right) inspect and
touch up wind-
shieldsthat have
just been drape-
formed. After the
windshields pass
inspection they
apply a piece of
protective cling to
both sides, place
an inspection
number on the
cling and send
them on down
the line.
Photograph by
Marcus Paulsen
ENTERPRISE MINNESOTA SEPT/OCT 2008 z7
Enterprise Minnesota: Any tricks you've
learned that have helped you assess whether or
not there's a potential fit with a customer?
CC: I think that observant CEOs can easily
determine the compatibility of a prospec-
tive customer with some basic research on the
company. One of the things I always look for is
consistency in people. If you see people within
the organization with similar values and with a
similar approach to business, chances are this is
more than a coincidence; it's an initiative from
the leadership of the company. We've found that
it's much easier to deal with consistent people
who understand the goals and objectives of the
company that they are working for. If there isn't
clarity in this area, it makes it very difficult to
be successful for suppliers because there are a
variety of measurements being used.
Deals are lost and relationships are
severed because of misinterpreta-
tion-don't let poor cornmunicat~on
cause your do~nfalla
CHRIS CARLSON
Perhaps the most effective way to learn about
the culture of an organization is to simply sit
down and ask some of the employees. Do they
like their job, the company, the direction the
company is moving? Are the corporate goals and
objectives clearly defined to all employees? Do
they feel that they have an opportunity to con-
tribute to these goals in their roles? It's amazing
how much you can find out about a company
just by asking a few questions of the folks that
work there.
Enterprise Minnesota: Beyond the resume,
what should a company consider when hiring
new employees?
CC: I often refer to our culture at Sportech as
the company's foundation-it's that important
to us. If this is something that we are going to
cast in stone as a core value, then we should be
committed to bringing in the right people to
sustain it. We look for "who" before we look for
"what." In other words, we look at the person,
who they are and what they stand for, before
we look at specific skills or core competencies.
There are lots of talented people out there, but
only a few talented people who also happen to
align with our corporate values. This is espe-
cially important with salespeople and others
who have direct contact with customers. Again,
it's the responsibility of the key leaders in an or-
ganization to clearly define the values, what they
mean and how the company puts these values
into the company's daily operation. When these
values have been solidified, then the hiring pro-
cess takes on a whole new level of importance.
Corporate commitment to excellence starts
with the hiring process. I really believe that the
best companies have a tendency to over-hire.
They bring in overqualified people and sur-
round themselves with excellence. Then, when
the company grows, they are far better equipped
to deal with it.
One hard lesson that I learned early on was
the difference between knowledge and wis-
dom. One of my favorite sayings is "wisdom
is knowledge with a drive train." I've hired
people who could spew lots of facts-think
Cliff Clavin-but were lost when it came to the
wisdom of applying that knowledge at the right
time and place. They were strong in theory but
had a hard time gaining traction when it came
time to produce. I've learned that wise people
are far more effective in the real world, and even
though they are much more difficult to find, you
are always better off holding out for wisdom
than settling for knowledge.
Finally, know that your OEM customers are
watching as you build your team. I also en-
courage periodic meetings with my customers
in which we very openly discuss how our two
teams are working together. It's a great oppor-
tunity to get an honest assessment of how your
team is interacting with the customer. If there
is a problem, it's far better to find out in this
settirig than to have things blow up on you later.
I simply ask how we are treating the customer,
and what we can do to bring more value as a
supplier. And if they really trust me, my custom-
ers will give me an opportunity to critique their
employees. The result is a situation in which
you anticipate and fix smaller problems before
they become big ones. One of the things I've
taken away from these customer meetings is a
i8 ENTERPRISE MINNESOTA SEPT/OCT 2008
.:~
E
i
-4
sense of what kind of people
we need to bring in to satisfy
that specific customer. If you
ask, they'll usually give you a
straightforward answer about
what you can do to step things
up from a service standpoint.
The key then is to integrate
this into your hiring process by
making the necessary adjust-
ments to better serve the
account.
Enterprise Minnesota: Why
is communication between the
company and the customer so
important?
~~: Deals are lost and relation-
ships are severed because of
misinterpretation-don't let
poor communication cause your
downfall. Many CEOs spend
hours poring over detailed fi-
nancial statements, productivity
reports and highbrow tactical
approaches to manufacturing
efficiencies, yet they dedicate
almost no time to improving
communication within their
organization and with their
customers. One of my frequent
battle cries at Sportech is, "Our
downfall shall not be caused by
a failure to communicate." Tell
me the machine broke down,
the mate>;ial didn't show up
or even that we had a quality
challenge, but don't tell me we
failed because of a breakdown
in communication with the cus-
tomer. It's absolutely inexcus-
able in my book.
Communication becomes
even more important as we've
reached a collaborative or
strategic level in our customer
relationships. As we work closer
together, their expectations of
us change, oftentimes requiring
us to take on additional re-
ENTERPRISE MINNESOTA SEPT/OCT 2008 zg
sponsibility in the communication dynamic. One
customer recently put a hold on a project late in
the design process because of some changes being
made in the product. We made the mistake of
assuming that because the customer requested
the changes that they would then communicate
to the order fulfillment side of their business that
deliveries would be delayed. We quickly learned
that the customer expected us to handle this
communication, because of the in-depth involve-
ment that we had within their organization on
this project. It was an obligation that we were
honored to accept, as it showed trust on their
part. Our mistake came when we assumed that
they were handling this. It's a mistake we won't
make again.
Simple misunderstandings can quickly turn
into nightmares for companies that aren't pay-
ing attention. Rather than trying to guess, in-
terpret, decode or read smoke signals, just ask.
Enterprise Minnesota: You mentioned that
you believe companies with strong communi-
cation models bring more value to their cus-
tomer relationships. Has this played a role in
Sportech's growth in the past?
~~: Absolutely! I really believe that today more
than ever, OEMs are looking for suppliers who
can bring the whole package to the relationship.
That means they'll need to meet every objective
set before them by the OEM including compet-
itive pricing, on-time delivery and exceptional
quality. But, even if you have a pretty tight grip
on these areas, you'll still fall on your face if
you can't effectively communicate with the cus-
tomer. It's another one of those intangible, im-
measurable deals where you can really set your
company apart from others by demonstrating
your commitment to effective communication.
In the early years at Sportech, when we were
first gaining some ground with a few OEM
customers, we were competing with some real
Goliaths in our industry. They seemed to have
an irreversible stranglehold on the business we
were fighting for. Eventually, we gained the
trust of our customers, not with lower prices or
some fancy new material, but by simply focus-
ing on clear, concise communication. A couple
of our competitors couldn't get their message
across, they didn't follow up and they were
famous for making assumptions, guesses and
estimations when the job required facts. Now,
don't get me wrong here, we busted our tails to
earn this business, but I still contend to this day
that the communication piece-the soft issue
that our competitors chose to overlook-was
the difference. I firmly believe that communi-
cation is the great deal maker ... and the great
deal breaker.
;,
~. ~OM E CAN I ~.
OUR DOORS ARE ALUJAYS LOCKED
.~:
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~._. !®\ _.. ~. _s1a_
En#erprise Minnesota: How can a company
3o ENTERPRISE MINNESOTA SEPT/OCT2008
j
motivate its employees to be
innovative?
cc: I think it's critical to
develop a culture of innovation
and then apply it to all areas of
your business. Innovation can't
just be what you do when busi-
ness gets slow and you need to
VUe all fail in business soroetirnes, but we
don't all learn and brow from our failures.
iNe can either pack it up or quit, or we can
learn from our mistakes, take accountability
and get stronger in the process.
CHRIS CARLSON
generate new revenues. It has to be the default
setting for everything your company does, not
just in design or new product development, but
throughout the whole company. Innovation can
transform a company if it is established as a core
value, but the key is to sustain it and utilize it as
a key driver. Our team at Sportech loves to in-
novate in every area, and it's really expected at all
levels of our business.
We are finalizing our plans fora company-
wide move into our new manufacturing facility.
I've been amazed at how my leadership team has
developed a very cool-and very innovative-
plan to pull this move off smoothly. They have
a plan that is well thought out, and in doing so
they have saved us a bunch of money and drasti-
cally reduced the amount of time that we will be
shut down. They won't win any awards for this
innovation, but it sure will prove to be benefi-
cial for the company, and it happened because
our team instinctively turned to innovation as it
faced the task, because it's an integral part of
our culture.
Enterprise Minnesota: So, you believe that a
strong culture can actually be a differentiator
for suppliers?
C~: You bet! I think more and snore companies
are starting to focus on culture and values within
their companies, and in the process they are put-
ting themselves in a great spot to effectively offer
a clear point of differentiation. Why not focus on
key cultural advantages within an organization
such as passion, integrity, character and authen-
ticity? Some might say that these traits sound
elementary or obvious, but look around you and
take note of how many companies have failed be-
cause they abandoned these basic, time-honored
principles. If Enron had chosen to be authentic
and honest, it would still be around and inves-
tors would not have lost millions of dollars. And
with the surge of business failures resulting from
unethical business practices, dedication to ethical
business practices has never been more important.
Enterprise Minnesota: How can businesses
maintain good relationships with customers
when something goes wrong?
CC: One of my favorite authors is John Maxwell,
one of the nation's foremost authorities on leader-
ship. In his book "Failing Forward," Maxwell
reinforces the importance of making the most of
our failures. We all fail in business sometimes, but
we don't all learn and grow from our failures. We
can either pack it up or quit, or we can learn from
our mistakes, take accountability and get stronger
in the process.
One of our largest customers-a Fortune S00
OEM that watches its suppliers closely-tells us
that the relationship we are enjoying with them
today is partially because of how we handled a
near disaster in the early stages of our relationship
with them. On one of our first large orders with
this customer, we shipped multiple truckloads
of product to them with a hardware assembly
that contained the wrong components. To make
matters worse, the instruction sheet inside the
assembly was for another customer, who happens
to be a competitor of this customer. It was not a
pretty situation!
We called the customer, identified the problem,
proposed a corrective action plan and immediately
went about fixing the problem. After the problem
was corrected, we made some process changes,
mapped them and demonstrated to the customer
that we were confident that this simply could not
happen again. The customer was firm yet incred-
ibly fair in this situation, and we were able to not
only maintain the relationship but we've been
able to grow our business substantially with this
customer. We failed forward in this instance, and
the lesson that we learned was invaluable. ~
ENTERPRISE MINNESOTA SEPT/OCT 2008 g~