Team Success

Kobay Enstel Limited

What is the criteria to determine the success of any merger? It would have to be that the companies are stronger financially, that they took market share, and they are on a very steady footing in terms of their performance. – Kevin Rollins, American businessman and philanthropist

Dating back to the 1920’s, mergers have been the catalyst for bringing together the best of two worlds – a symbiotic relationship with a shared vision of success. There has been a slow shift once again by Canadian companies toward mergers, not only as a business strategy for financial stability but for securing a stronghold in often competitive markets.

Mergers are, essentially, synergy in motion. Successful ones require forethought and excellent management systems to engender the best possible result – owning the market. But mergers are not reserved only for big time players such as Fiat and Chrysler who initiated a merger in 2009 and hope to boost sales to $132 billion in 2014. Mid size corporations can, and do, reap benefits as well. Central to their success is the companies’ relationship with people – customers, suppliers and employees – who will see a business through challenging times.

“If we’re successful as a team, we all benefit,” says Gavin Galansky, President, Kobay Enstel Limited. A Scarborough, Ontario, based automotive stampings and sub assemblies manufacturer, Kobay Enstel has seen steady growth following the merger in 2006 with Kobay Tool and Stamping and Enstel Manufacturing, founded in 1987 and 1996, respectively.

Both companies were Tier ii manufacturers in the automotive manufacturing sector. Today, Kobay Enstel is a mid size parts supplier to a growing list of automobile manufacturers including Honda, General Motors, Chrysler and Toyota. With a focus on seating assemblies, Kobay Enstel has a professional staff of managers, diversified engineers, tool makers and machine operators driving the company forward – from project conception through to completion. Kobay Enstel is ISO/TS 16949 certified and aims to be the best and largest Tier ii supplier in North America.

Although its focus is currently on the Ontario plant, the company has future plans for expansion into the southeast United States and Mexico. The reasons are varied, says Gavin. “There has been an immense growth that has occurred with the original OEMs. Most automotive manufacturing facilities have moved away from Detroit and southern Ontario and moved into the [American] southeast. Part of the reason is cheap labour, right to work legislation and tremendous state government incentives.” Gavin explains that in the U.S., these incentives for the industry include relocation costs and training assistance for staff, introduction to suppliers and recruitment help. But firstly, “We need to have a NAFTA footprint… our success is in building partnerships with our suppliers, associates and customers.”

Where many failed, Kobay Enstel survived the automotive industry downturn of 2009-2010. Many automotive suppliers were forced to cut back on capital spending, trimming their work forces and keeping only essential staff. Recently, automotive production has been on an upswing, mostly attributed to resurgence in U.S. demand. This quick turnaround created some problems for tier 2 suppliers, namely getting the right people back, the right equipment in place and keeping up with demand. “Many of our competitors didn’t make it through the downturn, so there’s a smaller supply base,” explains Gavin. “A lot of capacity has been taken out of the market… It takes time to ramp up again.”

Kobay Enstel knows that flexibility and adaptation are crucial to building a business – to surviving and competing globally. Such things as manufacturing equipment and work cells need to be changed over very quickly so that one program can be altered to run another aspect of production. Equally important is good “housekeeping” in the company’s facility to consistently minimise costs; analysis of the company’s value streams in terms of engineering, manufacturing and productivity determine where costs can be reduced. This often involves investing in new technology, upgrading and improving existing equipment.

Gavin states that the manufacturing industry was once reaping the rewards of a strong Canadian dollar. But that was, “A false sense of security. What it forced Canadian manufacturers to do is become very creative… it forced us to reinvent the way that we manufacture, to make sure we’re the most cost effective.” All of Kobay Enstel’s 170 associates are active players in this strategic management, motivated in their understanding that, “A clean, well organized factory is better for everyone.”

Being in the automotive industry, like any other aspect of manufacturing, requires a strong presence of mind at all times. Workplace injuries can cost a company significantly. In Canada, next to construction injuries, (24.5 per 1000), the manufacturing sector, at 24 per 1000, is one of the most high risk occupations for injury vulnerability. Slips and falls, machine contact and musculoskeletal disorders are just a few of the potential hazards employees face every day on the job. Ontario’s Occupational Health and Safety Act (OHSA) requires employers to ensure preventative measures are in place to protect their workers. “Anything we do in this facility revolves around safety first,” says Gavin. Therefore, Safe Start is assimilated into Kobay Enstel’s everyday working environment.

Launched in 1998, Safe Start is a successful international safety skills program developed to increase safety awareness in the work place by reducing critical error behaviour and thinking. Most workplace accidents occur as a result of fatigue, inattentiveness or haste. Safe Start challenges employees to keep their minds focused on the task at hand – mind on task; body on task; keep out of the line of fire. “We want Kobay Enstel to be a safe and healthy environment to work in,” says Gavin, adding that, “We have an outstanding safety record.”

Any successful business knows that Key Performance Indicators (KPIs) must be studied on a consistent basis so that any problems can be analysed and rectified. Tracking records enable a focus on what is important to a company. Kobay Enstel involves its associates in this monitoring process, believing that communication within the company is essential. The company holds monthly associate meetings to address concerns and provide an open forum for suggestions on how and where improvements can be made. A monthly company report card serves to disclose how the company is doing in terms of quality, productivity and safety. Also discussed are upcoming new business and what the future holds. “This motivates all the associates to work on the same company goals,” Gavin explains.

In terms of what customers are looking for in a business, Gavin reiterates that three things are foremost on their minds – cost, quality and on time delivery. All three components ensure that a loyal customer base will be retained. Gavin reiterates that Kobay Enstel strives to maintain this focus and that, “If you can do all three things well, you are going to be a successful business.”

In 2009, the Ontario and Canadian governments took measures to stabilize auto assembly and parts production during the global financial downturn, and CETA (Comprehensive Economic and Trade Agreement) is to be signed by the federal government in late 2012. Some feel that these negotiations may hurt Canada’s recovering auto industry, but Gavin sees no existing concerns for Kobay Enstel. “Eighty per cent of products shipped here end up locally, mainly to Honda here in Canada. Only twenty per cent of our product goes across the border.”

Kobay Enstel is a unique company in that it survived the industry turndown when many failed –through teamwork. It survived when many mergers fail – through teamwork. Indeed, success for Kobay Enstel is easily defined, says Gavin. “We pride ourselves on thinking ‘outside the box’… no problem is too big for Kobay Enstel. We will not accept failure as an option.”

January 23, 2019, 10:26 PM EST