Richard Childress Racing
Case Study: Richard Childress Racing
Industry: Machine Shop
Location: U.S.A. North Carolina
About The Company
A business started from champions NASCAR’s 75 million fans know and love Richard Childress Racing (RCR). Richard Childress, president and CEO and a former NASCAR driver himself, formed a potent alliance with Dale Earnhardt in the early 1980s and thus began what is today a 400-person racing empire in Welcome, North Carolina. Childress and Earnhardt went on to win six championships throughout the 1980s and 1990s, and sponsorship revenue flowed in. But after Earnhardt was killed in 2001 on the last lap of the Daytona 500, Richard and RCR lost the greatest driver in NASCAR history, partner, and best friend. By mid 2004, RCR started their comeback journey. For years, RCR has worked to produce incredibly high-precision racecar components. They eventually promoted Busch driver Kevin Harvick to replace Earnhardt, and today the team is again on its way to the top tier of the second biggest sport in the world. RCR fields Chevrolets for Harvick (#29 Shell-Pennzoil), Clint Bowyer (#07 Jack Daniels), and Jeff Burton (#31 AT&T).
An opportunity to grow from tragedy Richard Childress Racing has had to fight their way back from being one of the strongest teams in the sport after Earnhardt’s death in 2001. “Sponsors are to race teams what customers are to any business—they pay the bills, so without them we wouldn’t be here. Sponsorship money won’t grow unless we’re producing on the race track,” Says David Hart, RCR’s director of communications. To keep their sponsors and maintain the TV air time and publicity that comes with it, RCR needed their cars and drivers in the top ten on race day. The 2002–2004 race seasons were disappointments for RCR. It was at the end of the 2004 season when Childress acted on his vision to turn RCR around. He brought on new personnel with Formula One experience. He hired a highprofile veteran driver, Jeff Burton. He expanded R & D and manufacturing. Childress knew that to produce wins on the track he needed to produce a winning formula in the race shops, and, it had to be done at unheard of speeds. At stake was the future of the business. Childress and his team had to ignite the organization and start winning to ensure retention of high level sponsors, because in NASCAR, just one second can mean the difference between first and 31st place.
Change was initiated across the enterprise in early 2006. Nowhere was it more pronounced than in the company’s manufacturing arm, particularly its machine shop, which supports RCR’s engine, fabrication and R & D divisions. NASCAR engines turn at 9,000 rpm and pistons cycle at a rate of 150 times per second, so there’s no room for error. Though the entire enterprise mobilized for the push that began in 2005, the company’s machine shop played an expanded role. The shop expanded its operations and increased it high tech horsepower in 2006 by adding high tech machines, implementing Exact JobBOSS business management software, and adding nine additional new Okuma THINC machines. “Business management software was crucial for scheduling and turnaround,”says Rick Grimes, Manufacturing Manager of RCR’s 11-person manufacturing facility called, “The Okuma Technology Center”.
Benefits & Winning Results
RCR came on strong during the last half of 2006 with two cars in the Chase for the Nextel Cup. To start the 2007 season, Kevin Harvick won the Daytona 500, NASCAR’s equivalent to the Super Bowl. “We not only produce parts to sustain the cars, we prototype on a daily basis. It’s very intense and very confidential. We could not work at the pace we do without JobBOSS,” says Grimes. “Because Okuma THINC controls talk directly with JobBOSS software, RCR shop employees have immediate access to production information. There are no unwieldy intermediary devices. There are no missing data or misleading paper trails. Human error and omission are dramatically reduced and, in most cases, eliminated. The benefits are enormous— greater efficiency, lower costs, higher productivity and improved profitability. Every cylinder head and every suspension component is produced with swift but meticulous care. Prototypes abound, with the hope that a new material, adjustment, or technique will shave a hundredth of a second off a finish time.”
The How: Real-time response and rapid turnaround Piece by piece, everything has come together with new sponsorships, new technology, new funding, and personnel.
“One of the first big changes we made was to bring Nick Hayes on board in 2006,” says David Hart. “Nick was instrumental in developing the Cosworth’s Formula One program in Europe from the mid 1990s. We brought him over to head up our engine research and development. With Nick at the helm, we added a lot more engineering resources to help research and design engine parts.” This change translated to increased output in the machine shop, which actually doubled and required RCR to move into a bigger building to help with the capacity.
According to Grimes, Exact JobBOSS has been crucial to the precision and rapid response necessary to gain that advantage. “We make parts here that determine the outcome on Sundays, parts that give us a competitive edge” says Rick Grimes. “In NASCAR, a hundredth of a second can win a race. At Richmond in September of ’03, just .387 seconds marked the difference between first and 36th positions on the grid. Every cylinder head (where horsepower develops) used on the engines provided to RCR race teams is machined in this building. Last year we machined over 300 of them.” The introduction of Chevy’s new R07 engine required a tremendous amount of completely new parts. At RCR, Exact JobBOSS provides real-time quoting, order processing, scheduling, purchasing, costing and integrated accounting. “JobBOSS has sharpened our decision making. We now have control of capacity and material requirements and are working to go paperless,” says Grimes. “It integrates with other systems, including RCR’s Okuma THINC control. With JobBOSS and Okuma THINC controls, RCR has real-time access to set up, run times and parts produced. Labor costs and material usages are monitored in real time too so RCR can make timely and informed decisions to help keep their race cars out in front on Sunday afternoons.” Grimes calls the racing business “The epitome of continuous change and improvement. In our business things change daily, hourly. Real-time information is vital,” he says. “Before, someone could be making a change we didn’t know about, or a part we didn’t really want—dollars of inventory went down the drain, a lot of parts were scrapped and we lost valuable time.” Where previously it was one week, the shop’s average turnaround is now down to three days. Cars return from the track on Sunday, are worked on Monday through Wednesday, and go back out on Thursday. The crusade to gain speed and the battle for a tenth of a second rages in the shop as well as on the track. Lucrative sponsorships depend on it.
The Wow: Top sponsors, top cars, and continued momentum For the first time in five years, all three of RCR Nextel Cup teams are in the mix to make the 2007 Chase for the Championship. The near miraculous turnaround has sponsors elated. “There’s a ton at stake,” says Grimes. Sponsors want the TV air time. We have three cars in the top ten and three of the top sponsors in NASCAR.” Bobby Hutchens, Director of RCR’s RD, says the company is doing things differently now. “There are 400 of us here,” says Hutchens. “That’s a lot of people to keep all on the same page, pulling in the same direction. But it’s happening now and has been for a quite awhile. The focus of upper management is to maintain that drive and edge.” Rick Grimes agrees that the company’s planning and objectives have paid off. He views the current momentum in the shop as a reflection of the company’s high tech, RD-driven strategy. “We do things in manufacturing that give us a competitive edge on the track. Before, I used Outlook, a pencil and a form I made up to load the shop floor. By the time I got the first calendar done, my phone would ring and I’d throw it away and start over. Now we’re able to plan what takes place, because with JobBOSS we know what the load is. We can see what the impact will be of a prototype job or a chassis component.”
In January, Kevin Harvick screamed across the finish line to win the Daytona 500 by two onehundredths of a second. In April, Jeff Burton powered past Matt Kenseth in the last lap to win the Samsung 500 in Texas. And as this story was being written, RCR’s NASCAR Busch Series teams had already earned five victories. “In manufacturing, the conversations have changed,” says Grimes. “The guys proudly display newspaper clippings of Kevin standing on the car in Daytona with his hands raised in the victory stance. The shop environment is different. If I could plug a cord into it, I’d light up a 20 mile radius. The team has jelled and they are willing to tackle each challenge thrown their way. It’s the type of environment where you don’t need time clocks. Now that’s what I call fun.”
David Hart says, “They say success breeds success, which is certainly the case here at RCR. Three-quarters of our employees don’t go to the race track every week… they watch the races on TV like everyone else. What they see is RCR up front, leading races and winning—that same attitude arrives early at the shop Monday morning.”