Thriving in Florida During a Decade of Rapid Change
Hurricane Andrew brought devastation to many areas in south
Originally known as Vinyl-Tech, PGT got its start in the early ’80s producing a porch enclosure window featuring a clear, non-structural vinyl glazing. “That’s where its original name, Vinyl-Tech, came from,” states Rod Hershberger, PGT’s executive vice president and chief operating officer, as well as one of the company’s founders. The product had been around for a number of years and was very popular in the
To complement its original line, the company began carrying glass windows for porch enclosures later, and then began manufacturing glass windows itself in the late ’80s, because it was having difficulties with a supplier that was “less than reliable” on deliveries. Its aluminum windows were sold under the Progressive Glass Technologies name. At the time, much of the market was still bronze and anodized finish aluminum, Hershberger recalls. “Five to seven day lead times weren’t unheard of for those products, but they were for white,” he explains. “What did we know? We offered white with the same sort of five to seven day lead times. As a result, the aluminum window business began to grow quickly.”
In fact, PGT grew to become the largest manufacturer in
In addition to its success in aluminum windows, still the mainstay of the
Andrew’s Immediate Aftermath
While the company grew steadily in the years prior to Andrew, the storm did play a key role in its growth, Hershberger states. PGT had entered the
Some manufacturers were unable to get the material shipments they needed, and weren’t able to deliver product, he continues. “We were able to deliver, which helped us establish relations with new dealers in
The Impact of Impact resistance
The manufacturer also got involved in the code development process early on, says Hershberger. Fairly soon after Andrew, teams of engineers, architects and other experts began surveying the damage. There were questions about whether it was the roofs that caused the failures or the windows. “However you look at it, “ he adds, “they ended up with the conclusion that the code wasn’t strong enough.”
At the time, there was some fear in the industry that new codes designed to make homes more resistant to hurricanes would mean homes with large window and door areas might be regulated out of the market or priced so high that homes would be built with significantly fewer units. Looking back at the initial
PGT management reached the conclusion quickly that codes related to windows and doors needed improvement to protect the homeowner. “But we also wanted to make sure it was fair,” Hershberger states. “We weren’t there to fight the code. We wanted to be friendly to the code process.” That attitude was shared by several other window manufacturers in the market, but not all. The window industry didn’t really fight the implementation of new codes at all, he says, but a good number of companies chose to ignore the whole process.
There were manufacturers that said, “they just can’t do it” or “it will never happen,” he continues, but changes did make it through. Initially,
Markets such as Miami-Dade, where the code has been in effect for several years—and where that has been a significant hurricane—are the most accepting of the new codes, she continues. “Talk to people on the East Coast (of
Now, impact resistance is required beyond the original south
While PGT has been successful adapting to the changes in
That’s key, she adds. “The market’s a little different here. You don’t see the big boxes selling a lot of windows. There’s too many difficult issues to deal with.” The company has invested in a state-of-the-art training center in its facility, because of the importance of dealer education. It has also worked on sales tools, like a software package that allows dealers to create virtual patio enclosures to show homeowners. “We’ve got a great dealer base,” she says, and despite the fact that PGT is not the lowest priced competitor in the market, dealers return because “the value proposition is there.”
Manufacturing and Delivery
Hershberger also downplays the significance of code changes in spurring growth, and points to PGT’s basic operating philosophy as the main reason for the company’s success over the past decade. Unlike other manufacturers, which credit automation or the latest computer systems, he points to people. “We’re big into the theory of constraints around here.” The theory, developed by Eliyahu M. Goldratt and originally laid out in the business novel, The Goal, basically states a production line’s capacity is limited by the slowest step in the process and that a company’s overall capabilities are limited by the weakest areas, he explains. The theory of constraints has been applied by thousands of companies, and forced manufacturers, in particular, to look for the bottlenecks in their operations.
How does PGT apply the theory? Hershberger begins by explaining that higher wages aren’t given for seniority, but for how much a worker can do. Workers on a line are encouraged to learn more than one job on that line. Those who can perform all the jobs on a line are paid more than those which can perform just one. Workers earn even more once they can perform tasks on other lines, he continues. The highest paid workers can perform all the jobs on four different lines. “Once they can do that much, we’ve found they can do pretty much anything in the plant.”
This approach is key to PGT’s ability to maintain short lead times as it enables the manufacturer to move personnel around to the lines where they are needed. For example, PGT’s awning line generally operates at a fairly low-volume, he explains, but every now and then a big order comes in for them and the manufacturer is able to shift people to that area of the plant. This approach, Hershberger notes, means PGT has not placed a great emphasis on automated equipment. While it makes investments “when they make sense,” he says, PGT still finds it can do many things more effectively with people than machines.
The theory of constraints shares concepts with lean manufacturing approaches, but there are also differences, Hershberger states. “It handles hiccups better,” he notes, as it allows for buffers, as long as they don’t slow the whole process. “There’s more emphasis on working as a team.”
This aspect of the theory of constraints, as applied at PGT, can be seen in its program of “gainsharing.” Beyond basic salaries and compensation, worker bonuses are determined by the company’s overall success, as far as improving processes and surpassing goals, rather than individual accomplishment. Again, Hershberger explains, the goal is to get individuals to work together and eliminate problems or strengthen weaker areas, because these determine the company’s overall level of success. “Everyone here knows it doesn’t matter how well their line or their department per forms. What matters is how PGT performs,” he states.
That emphasis on PGT’s overall performance is employed with management level personnel, as well as line workers, he continues. Executives are not tied to a specific function and are shifted around to various tasks. A vice president with a more extensive IT background is now managing operations in the former Binning’s plant in
Hershberger says that in its earlier years, PGT grew, but “it didn’t grow real efficiently.” To meet increased demand, it used to simply hire more people. Now, he states, it is constantly bringing change and improvement to its operations. Implementing the theory of constraints has enabled the company to not only grow, but grow more profitably.
Both Heinsman and Hershberger expect that will continue too. One reason is new ownership. PGT, which employs over 1,600 people at its 470,000-square-foot plant located near
The new ownership, for example, enabled PGT to acquire Binnings Building Products in
PGT sees significant opportunity to expand sales of its windows and doors outside
She emphasizes again, however, other factors as key to future success. “We see ourselves offering a full market basket. It’s the products. It’s the service. We have PEs on staff who can provide customers with the assistance they need.” Dealer education programs and marketing support packages are areas where PGT is expanding its efforts.
Hershberger points to the company’s people, and the commitment they show to getting jobs done. “We all understand that it’s not just products. You can’t just offer a short lead time. Hitting it is critical. And you have to do it all the time.”