One email back in 2013 changed Jim Sliker’s life and the direction of the company he’s been steering to success ever since. Arkansas-based Central States Manufacturing, a nationwide producer of metal roofing, siding panels and building components, was looking for a new CEO. The 100 per cent employee-owned company was sniffing around to see if Jim knew someone who would fit the bill.
“I threw in a resume that hadn’t been updated for a long time. One thing happened after the other, and six weeks later, I accepted the job,” he smiles. “After I looked at a map, I knew Arkansas had to be warmer than Michigan.”
After a long career in the automotive industry, including 15 years with French group Valeo, Jim had thought he might retire and “just go be a fifth-grade teacher”, but the company culture struck a deep chord with him. “What I saw here was a business that was very focused on the customer,” he says. “People were the biggest asset. That’s what has generated the results from being a little shed in Rogers, Arkansas, started by one entrepreneur, to now being 11 locations with 1,000 people, and a US$500 million business. I’m proud of our DNA and I hope we never lose that.”
If you are a teaching company, you can give employees a stake in the outcome, and they will perform better.
Jim was intrigued with Central States Manufacturing and its employee stock ownership plan. Since 2011, staff have owned all of the company’s stock. It’s a win–win for everyone. “If you are a teaching company, you can give employees a stake in the outcome, and they’ll perform better and find better success for themselves and the company,” he explains. “It also very much aligned with my opinions on open-book management and full transparency with all people in the company.”
Since his arrival, Jim has transformed the way the company does business, using a data-driven approach to innovate and grow. “It’s all about planning, processes and KPIs,” he says. “I tried to take the good things out of the auto industry and apply them practically. It’s more about function than form.
“If we’ve served customers well, and use our KPIs to drive our performance and understand our weaknesses, then the financial results just happen, we don’t have to worry about it.”
As a result, Central States Manufacturing’s annual sales have grown from US$265 million to US$510 million. Medium-term growth strategies are targeting a minimum five to eight per cent growth per year.
“That’s kind of our sweet spot. Being a growing company helps us generate a return for our employee-owners, and the more we grow, the more people we can hire, which means the more wellbeing and financial freedom we can offer families.”
An engineer by training, Jim likes mixing small company culture with big company clout. “We never want to lose our small company startup roots, where we can be entrepreneurial, he says. “But we want to leverage the resources we have now that we’re a big body in our industry.”
He believes the main levers for continuing growth are investments in plants, products, innovation and diversification. And across all of that, ever better customer service. “We’re trying to geographically saturate. In the territories we serve, we want to birth more plants so that we can be closer to customers, be quicker for them.”
I always want us to be a company that pursues excellence and continuous improvement.
Part of the company’s recent success stems from enhancing relationships with suppliers including carbon steel producer Steel Dynamics, Sherwin-Williams paint and coatings, and steel manufacturer Ternium. “Steel is the key commodity for us, hands down,” Jim notes. “Seventy per cent of our cost structure is just buying steel from steel mills.”
The company was primarily focused on getting the best price by “shopping around” for quotes, so Jim set about establishing solid partnerships with suppliers. “Visiting the mills to understand their business, understand their systems and meet the people,” he says, adding that he also put in place scorecards and quality audits for suppliers.
“It’s a scorecard on quality, warranty, on-time delivery, cost, their customer service and innovation. It’s not to hold them accountable, but to allow transparency on where they’re doing well and where there are opportunities to improve, so we can work with them on how to get better. We grow, they grow.”
The upshot is that partners have thanked Central States Manufacturing for helping improve their business. The strategic supplier relationships have reaped innovation, resources and benchmarks, and ensured survival beyond the pandemic. “In a period like today, when steel gets short, the shortest it’s been in my eight years, it protects our supply, which is our lifeline,” Jim points out. “It’s very focused buying. Had we just been doing opportunistic buying, we would have much less availability of steel.”
Faced with unprecedented growth, in the coming year, the company will fine-tune planning and logistics, and continue to invest in capacity expansion. “Because of the complexity of our business, we don’t stock anything – everything is custom ordered: color, size, length, shape,” he says. “We’re trying to be one of the fastest in the business. A lot of our orders go out in 24–48 hours to the job site.”
Bolstering the operational system and enterprise resource planning is also a priority. “When I got here, the ERP system was designed for a small, single-site company. Now that we’re going to be 11 plants in a couple of months, we’ve got to get a really integrated operational business platform,” he reflects.
With many new players on the scene, there’s no room for complacency, Jim explains, and focusing on its customers is what will ensure Central States Manufacturing’s future success. “We have no long-term contracts with any customers in this industry. You’re fighting for every order and a customer can leave you tomorrow and buy your product somewhere else,” he says. “So the way you do business with that customer, how easy you are to work with, that’s what differentiates you from others. It’s not the product. That’s our core competency.”
A desire to make all customers “raving fans” means going above and beyond. “When our customers have problems, we solve the problems – we don’t worry about who’s responsible. We care about their business,” he insists. “We’ve got a high degree of “right” in the industry, meaning you get what you ordered. And you get it on time. We measure lateness. If we’re one minute late from when we told you we’d deliver it, we’re late.”
To achieve all this, Jim is constantly thinking outside of the box and challenging the status quo. He even invited his largest supplier to do a safety audit at his plants. “I said, ‘I want you to teach us what we could be doing better.’ And we were able to leverage best practices throughout the extended enterprise,” he beams.
When problems arise, we try to figure it out together.
Fundamental to what Jim calls “the Central States way” are the company’s core values: Own It, Can Do and Act in Love. “This is how we perform at Central States,” he says. “It’s our commitment to our customers, company and each other. It’s a culture of reliability and excellence. An environment where we can depend on one another, are open to change and the pursuit of continuous improvement. We treat others with humility, respectfulness, kindness, and honesty. We exercise patience and self-control.”
And when problems arise? Jim doesn’t hesitate in his response. “We try to figure it out together.”