Case Study: Gamma Vaccum
Industry: Manufacturer of Ion Pumps
Location: U.S.A. Shakopee. Minnesota
About The company
A small company with big numbers Gamma Vacuum is an 18-person shop located in Shakopee, Minnesota, and aims to be the world’s leading manufacturer of ion pumps. In a business climate dominated by much larger 1,000+ employee businesses, Gamma Vacuum already owns a 36% share of the approximately $25 million market, moving up from 16% in the last four years. This small global technology firm designs, manufactures and services ion pumps and ion pump controllers for government labs, research universities, the computer industry, and the medical industry. Customers such as Argonne National Laboratory near Chicago move electrons around a one mile circle at velocities near the speed of light, those electrons require a vacuum, and Gamma provides it.
Since Tony Wynohrad and his two partners acquired the company in 2003, he and his team have pursued market share with zeal. Despite the odds, and despite being underdogs, they doubled in size from 2003 to 2004, then maintained steady 7-8% growth three years running.
It’s 6 a.m. at Gamma Vacuum and the company’s core talent, just eighteen individuals, begin their daily quest for market share. Every one of them understands the reality of this business. Ion pumps are a mature technology developed back in the 1950s, and the demand for them is small; other technologies have eaten away at the market, and two to three other major manufacturers, whose sizes dwarf Gamma Vacuum, make ion pumps. In addition to that, Gamma has made the decision not to diversify beyond ion pumps. But Gamma sees this as an opportunity. “Among our competitors, we are the only small business. A shop doing under $10 million annually versus $200 million for our average competitor that makes this product. That’s all we do,” says Mr. Wynohrad. “We understand there is a risk to this strategy. Yet from another standpoint, if we can continually grab more market share and outperform the competition, we’re assured that the ion pump business is out there.” At 34, partner and business director Tony Wynohrad is equipped with a degree in engineering and a high technology MBA from Boston’s Northeastern University. He sees possibility and potential, and so do the others on his flat organizational chart. “Our competitors have HR and IT departments and employ thousands of people yet we are winning business over them.” Within its first two years, Gamma Vacuum served 130 customers, today they serve 371. They compete daily with corporations doing $200+ million in sales. But so what? In Mr. Wynohrad’s mind, technology, speed, strategy, and delivery make the difference in a business relationship. One would think that large businesses would automatically have a technology advantage, but that’s not the case when they are competing against Gamma Vacuum.
Armed with Exact JobBOSS shop management and control software and Exact Synergy workflow and CRM software, Mr. Wynohrad views technology as a vital ally. These systems from Exact also keep his overhead down. “I estimate our JobBOSS and Synergy solutions equal 1.5 to 2.5 people who would otherwise monitor information and keep our ISO system in compliance,” says Mr. Wynohrad. Performing large while staying small
Starting from day one, May 1, 2003 to be exact, Mr. Wynohrad and his then team of nine used technology to appear as large and as capable as their Fortune 1000 competitors, but with the advantage of being a lot more nimble as a smaller company. Exact JobBOSS gave them the flexibility to reschedule, and revealed material shortages early on. “We’re a configure-to-order shop. We don’t have parts sitting on the shelf ready to ship. Every job is a little bit different. Within five minutes we can build a dummy job in JobBOSS to find out what can be delivered.
We do this so quickly, our customers’ requests are met on the spot,” says Mr. Wynohrad. One year after opening, Mr. Wynohrad and management decided that without workflow management software, they would never prevail. So JobBOSS and Synergy were integrated and provided Gamma the traceability, repeatability, and processes to achieve their ISO certification in 2005, in nine months, with zero non-conformances. “Synergy enables us to qualify leads, monitor our reps and distributors, maintain end user information through quoting, and do shipment follow up for continuous improvement,” says Mr. Wynohrad. Strategically, Gamma Vacuum pursues increased share of distribution on a daily basis. Their ion pumps are sold through 30 reps and distributors on five continents, from Kolkata, India, to Beijing, China, to Woodlawn, Ontario. Mr. Wynohrad monitors these reps and distributors closely (and automatically) using Synergy. Thanks to this technology, Gamma looks and acts ten times its size.
Results & Benefits
Gamma’s market share has grown from 16% in 2003 to 36% in 2006. Their secret? Provide more versatile, flexible, and configurable product with better quality, pricing, and service than their competitors. Gamma’s closest competitor is a $200 million manufacturer of vacuum and scientific products, a company that takes an average of 60 days from date of order to ship date. Gamma’s turnaround is half that. “Most of our potential customers have been buying the same product from the same source for 10-15 years, primarily because it’s cost effective and there are no quality issues,” says Mr. Wynohrad. “To win their business and interrupt that pattern, we have to demonstrate extraordinary service.” This service has paid off—Gamma jobs have increased 40%, from 1,249 in 2003 to 1,746 in 2006, and sales volume has doubled in the last 4 years.
Wynohrad and his team break through with speed and customer service their competitors cannot. “A customer calls and says, ‘I need this now.’ I can physically go on the floor and tell our team, ‘Do this one first.’ says Wynohrad. “Try that in any large company and you’re likely to ruffle some feathers.” Wynohrad also believes that competitors’ diverse product lines cloud their view and dilute their service. “The big companies don’t even notice they’re losing market share. As they lose share, they become less responsive to customers’ needs, and instead focus on other products.”
Fast, quality service with technology on the offensive Gamma’s high tech, high service strategy went into effect the moment Mr. Wynohrad and partners took over the nine employee shop. From the quality side, Gamma made an excellent product just like the bigger players. But now their differentiator would be on the service side. “That’s where I try to push. We just got a $50,000 order today because we could deliver a custom product within four weeks. No way can our competitors do that,” says Mr. Wynohrad. Technology would be another competitive difference. Gamma Vacuum operates out of a 12,000 square-foot plant, has no IT department, no extensive product line, and no analysts monitoring its stock. What they do have is Exact Synergy to manage their distribution channels, making them more savvy, thorough, and ten times their actual size:
1) Web Download Follow Up, When prospects visit Gamma’s Website, they must first register to download information. Synergy forwards registrations to the closest distribution channel or rep and requires immediate follow up with Gamma, demonstrating they made contact via the Website on a timely basis.
2) Quote Follow Up. Gamma handles all quotes, while their distributors perform follow ups on the quotes. That way, Gamma can maintain end user information despite their reps and distributors being separate businesses. Based on follow up and expiration dates set in Exact JobBOSS, Gamma issues a timely email to their reps and distributors, then requires them to follow up through Exact Synergy.
3) Shipment Follow Up. ISO requires that companies survey their entire customer base to make sure customers are happy. Gamma takes its own approach: thirty days after shipmentthey issue an automated email to reps and distributors based on the packing list ship date and contact information in JobBOSS.
With just one product in a static industry, Gamma continues to grow, stealing two to three OEM customers from their competitors every year. Whether big or small customers, OEM customers build a new product and integrate Gamma’s ion pump, and become long term customers. Another significant advantage is keeping the business as high tech and paperless as possible. As Mr. Wynohrad says, “I’ve been called a borderline geek. When we started doing this, I didn’t want to have a bunch of paper and forms dealing with procedures, orders, materials, or inventory. I wanted a software package flexible enough to run the shop and do CRM too.”
“Gamma Vacuum will continue to grow by taking market share from companies that are significantly larger. That’s pretty substantial in today’s world. We will do that by committing to staying flexible and nimble, staying close to our reps, and even closer to our customers.”