General Carbide goes efficient, gets aggressive Pittsburgh Business Times - by Kris B. Mamula Friday, October 23, 2009 Mistake Mona Pappafava-Ray for just another fighter and you could miss her grasp of history. And history is her left hook. General Carbide Corp. is a 41-year-old maker of tungsten carbide blanks and forms that are used in cutting and metal forming operations worldwide. The automotive and housing industries are among General Carbide’s biggest customers, which means the past year or so has been tough for the Greensburg-based company. As the broader economy started with the sniffles, manufacturing was headed for bed hacking with double pneumonia. In fact, many manufacturers did exactly that with layoffs and curtailed operations, hunkering down to get through. General Carbide certainly hasn’t been immune to bigger economic forces, but the company has been distinguishing itself by its response to difficult times. “We will fight, and we will fight and we will fight,” Pappafava-Ray, the company’s president, said. “Things have been difficult, but we have stayed together.” Staying together has meant Pappafava-Ray taking a 30 percent pay cut and other executives pitching in by taking a 20 percent pay reduction. It has meant reducing the workweek to 32 hours for shop floor employees so no one there would have to lose their job, even as revenue was slipping 25 percent during the past year. “We’re going to stick together in this,” she told employees. Her strategy is from the General Electric playbook from another difficult era — the Great Depression of the early 1930s — when the company shortened its workweek and cut wages to save talented employees, which became a competitive advantage in the long term. And General Carbide hasn’t been sticking together for the sake of sticking together. The company is using the downturn to improve efficiency, reduce operating costs and get staff up to speed on new equipment and ways of working, turning crisis into opportunity. “When times are slow, you use the time to build, to teach, to train to implement new ideas,” Pappafava-Ray said. “If you force companies to be profitable in three months, you force companies to fail.” During fiscal 2009, the company invested $1 million in capital improvements, roughly the same amount earmarked every year for staff training and production improvements. As orders thinned, shop workers began cross-training and coming up with other ways to improve efficiency, efforts that would not be possible during peak periods. The result has been what experts call a highly engaged work force — employees who are an active part of the solution. Machinist Kevin O’Connell, who has been with the company for 15 years, said the changes in workflow have greatly improved efficiency, reducing the time needed to fill and ship orders. “It’s amazing the differences you see,” he said. In fact, a year into Pappafava-Ray’s bold experiment, the rate of on-time delivery has increased and 58 percent of all orders are shipped within seven days, up from 29 percent. The company will be paperless at the end of October, and next year it will introduce a system to electronically transmit customer orders directly to the shop floor. “The right plan for any company is to continue to reinvest in the company,” she said. “People fail when they take money out of the business.” It’s important that companies determine just how far out on a limb they can go before making deep cuts to survive an extended downturn, according to Christine Kush, associate director of the Center for Entrepreneurial Excellence at the University of Pittsburgh. But for companies like General Carbide, which were financially sound before the recession, the limping economy is an opportunity for future growth. “There are a lot of businesses out there hurting, but there are a lot (that) were managed well and are now weathering the storm,” she said. “The wisdom of what (Pappafava-Ray) is doing is positioning herself so there’s no ramp-up time. “When the economy comes back, she’s going to be ready.” | 
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