The Growing Business that Treats People Well
Since 1979, Pacific Cabinets Inc. has been designing, manufacturing, and installing cabinets and related products for clients all over the country. Today, the Ferdinand, Idaho-based business specializes in institutional and commercial casework, architectural millwork, countertops, and specialty products. Its main clients are large institutions such as hospitals and universities.
When asked what inspired him to start the company, Founder and President Steve G. Frei tells us that a lot of it had to do with necessity. Opportunities weren’t abundant in the rustic logging and farming centric community of Ferdinand, which has a population of about 160 people. Now, Pacific Cabinets is a top employer in its region, creating opportunities for those outside of the area’s traditional farming base.
“It was necessary,” he says. “I grew up in a rural area and the farming economy wasn’t great; there weren’t many jobs around. Then in college, to be very honest with you, I had a terrible boss working at a truck stop. It inspired me to create a business where employees had more equal footing and were treated very well.”
This was the first (and only) job Frei ever had where he wasn’t his own boss, but it taught him a valuable lesson in what not to do. Moreover, he was raised by entrepreneurial-minded parents. This upbringing also played a role in his decision to start a company of his own.
“My dad was a farmer and my mom ran an upholstery business, so I grew up in that environment,” he adds.
Frei knew that with a lack of employment options around him, if he wanted to remain in the community, he would have to create one. Pacific Cabinets now employs 93 people, and has been designated by the U.S. Small Business Administration as a HUBZone business. HUBZone is a program for small to mid-sized businesses that employ people in Historically Underutilized Business Zones.
When Pacific Cabinets seeks new crewmembers, Frei looks for people whose values reflect those of the business: integrity, honesty, and loyalty. He seeks reputable project managers with experience and technical skills.
“We have longevity in the industry, and very experienced project managers. We have been in business since 1979, so we are now on our second generation of employees here at Pacific Cabinets. The good thing about living in a rural area is that people have a good work ethic. They are very loyal, as long as you treat them well and are willing to train them. With that comes low turnover and a lot of experience,” explains Frei.
When Frei first started his business in 1979, Pacific Cabinets originally served both residential and commercial clients. Soon after, in the early 80s, its business model changed.
“The first commercial job we ever did was $40,000, and it was a lot bigger than any residential job I had ever done at that time. We decided to go in that direction and never looked back,” he recalls.
Recent projects that the firm has managed include Block 19 of downtown Seattle’s 37-storey Amazon Tower. The firm will complete Block 20 from 2018–2019. Both are sizable long-term, multimillion-dollar assignments. Pacific Cabinets has also completed work for Washington State University and the University of Idaho, as well as institutions in the Western U.S., the South, and even in Alaska and Hawaii.
The company is already about 90 percent booked for 2018. “Our largest project is a hospital in Provo, Utah that will be completed in early 2018. This project has almost $5,000,000 of product fabricated out of our plant. We are working on budgets for several large projects in the Northwest as well as California.” The team is now in the process of finalizing a contract with Gonzaga University in the scenic city of Spokane, Washington. Architects and contractors partner with Pacific Cabinets to craft high-quality products specific to a client’s needs.
Much of Pacific Cabinets’ success can be attributed to treating people right—both clients and employees. Frei mentions that having an experienced, loyal team helps to set the business apart when conducting negotiated work.
“Our project managers are so experienced that they can look at different design ideas or offer different material choices to save the customer money,” he says. “We thrive on these negotiated jobs where the architect and the general contractor bring us on board early to help design and budget the projects. We will work on projects two or three years in advance, before it has even come out to bid.”
Because the company offers these preconstruction services, Frei suspects that the Pacific Cabinet carries more overhead in the estimating and project management departments than most companies. However, these measures can also present opportunities for institutions to save money based on their selections. Currently, Frei estimates that Pacific Cabinets’ business is 60 percent negotiated jobs, and 40 percent based on bids.
But though Pacific Cabinets is almost fully booked for this year, it has exciting plans ahead for both its team and customers. This spring, it is implementing a new ERP (Enterprise Resource Planning) system. ERP systems improve a company’s workflow by integrating all processes essential to running the business (accounting, inventory, customer relationship management, etc.) with a collaborative platform.
The team is currently implementing a new ERP system that interlinks with its current engineering software “Microvellum”, anticipating finishing in June. Microvellum provides design to manufacturing solutions with engineering and design platforms based in AutoCAD and Blender software—the standard for architects, designers, and woodworking professionals.
The ERP system will automate Pacific Cabinets’ scheduling and allow its field people to know exactly when a shipment is arriving. It will provide real-time job updates so the team knows exactly where it currently is on a project. It also gives field staff and remote project managers a lot more visibility on where the products are in the building, where they are in the process of the shop, and the costs associated with the project on a real-time basis in comparison to the budget.
“There are a lot of pluses,” says Frei. “We figure we will gain about 20 to 25 percent efficiency in the engineering department by automating the work order process with our new ERP system. And it will give our customers better and more accurate scheduling and information, so we can better predict when projects will be completed.”
That’s not all – Pacific Cabinets has also recently purchased two brand new semi-trucks with GPS tracking, so installers know exactly when a truck will hit the job site, and can signal to them on the road. If there are any mechanical problems, the high-tech trucks tell the driver where the nearest dealer is located, and even which parts to pull off the shelf. The driver is also first in line when their truck comes in for service, saving workers time while also increasing their safety on the road. And of course, it makes Pacific Cabinets’ customer service all the more impressive.
“Customer service is a big deal for us. Getting people there on time and making sure we do what we say we’re going to do is important to us,” Frei remarks.
The Pacific Cabinets team makes a great effort to stay up to date with technology, and Frei mentions that he also feels it is important to have and maintain the latest CNC equipment in the company’s state-of-the-art facility.
Lastly, Pacific Cabinets is currently developing its training systems. Frei mentions that the cabinetry company has received a grant from the State of Idaho to develop a formalized on-the-job training program, and the company has enlisted the help of a consulting firm and the University of Idaho to complete this ambitious task. The training system is built on an SQL server database, continually updated as Pacific Cabinets gets new software and equipment.
“Our intention right now is to have every position in the company eventually on that training system. Currently, we have engineers, CNC operators, and are working on the estimating department. It allows them to log into the system to see what they’ve been trained on in a step-by-step basis, and align our pay scales according to that. It also tells an employee what they need to do to reach the next step and achieve the next pay raise, or even cross-train into another area if they want to pursue that,” says Frei. The goal of the training system is to remove all roadblocks to an employee’s success, which Frei believes will also make the woodworking company more profitable as the employee develops their skills.
As he describes, “There are tests at the end of each segment to make sure they are qualified, and their supervisor approves it. It gives them a proactive way to expand their knowledge and also move up the ladder at our company. We feel that having, attracting, and retaining good employees is the key to any successful business.”
Frei’s simple formula of crafting good products and treating people with respect has proven effective over the decades and made Pacific Cabinets a desirable place to work. In a small community where many businesses find it difficult to attract great workers, this HUBZone business has excelled at exactly that.
“Our supervisors have done very well when it comes to attracting people. A lot of businesses in our area struggle, and of course there are tough positions that are challenging to fill, but all in all I cannot complain; we have great success attracting employees and retaining our existing ones,” says Frei.
While Pacific Cabinets has a busy year in store with all of these changes, it also has a long-term plan of sustained growth at a healthy rate, avoiding the pitfalls of overextending too much, too quick. The measures that Pacific Cabinets is taking this year to streamline the business will be helpful down the road as the company expands.
Frei mentions to us that one of Pacific Cabinets’ project managers in Utah has recently moved to Las Vegas, and the business is one of the few companies approved to work on the Las Vegas Stadium currently under construction. It is set to open for the 2020 NFL season, and will seat about 65,000. Pacific Cabinets will be pursuing the job soon, as well as more of the Nevada and California markets in the future as the business grows its national presence. Its successes so far are a testament to how far ambition, work ethic, and treating people well can take you.
Pacific Cabinets is almost at capacity for the year, but large-scale institutional projects take time to plan and commence. Institutions seeking preconstruction services are welcome to contact the business at www.pacificcabinets.com.