A Commitment To The Customer: "Quality Imaging Products' Obsessive Customer Focus
Results In Sustained Growth"

When Quality Imaging Products, "QIP", moved to its newest location in July, 1999, Matt McGregor, QIP's Business Manager, stayed at work until 10:00pm for two weeks straight to ensure that the information systems worked correctly when QIP opened for business after the move. His work paid off - not a single customer order was delayed by the move. "We have a commitment to our customers that extends beyond what most people might call rational," explains Mr. McGregor. "We obsess about making sure that we are the easiest supplier for our customers."

QIP's 160 employees remanufacture over 100 different types of laser and copier cartridges. Producing over 40,000 cartridges per month, the company, based in Lake Forest, California, has become a national leader in the recharger industry. Martin Stein, QIP's new CEO, attributes QIP's eleven-year track record, exclusively to its commitment to customers. "This commitment to our customers is evident in our focus on quality, the way our executives manage the company, and even in our product selection," states Stein emphatically.

Last fall, QIP was rewarded yet again for its customer-centric philosophy as it was named to the Inc. 500 list of fastest growing private companies for the fourth straight year in a row, a feat equaled by less than 200 of the 5000 companies that have appeared on the list since 1980. During that time, the company has grown over 800%, satisfying more and more customers every year.

A Customer-Centered Philosophy From Its Inception

Jim Steiner, the company's President, founded QIP in 1990 with $500, a garage, and grand vision to solve customers' problems better than industry competitors. Even Steiner's selection of a name for the company was designed to focus its employees on its customers' number one issue: quality. Consistent product quality is one of the biggest problems in the remanufactured cartridge industry and is cited annually in industry surveys as the number one reason for lost customers. QIP's industry research reveals that approximately 2 in 5 new remanufacturers and approximately 1 in 5 established remanufacturers say they lose customers due to poor product quality. Outsourced remanufactured cartridges have field failure rates of 5.0%, while in-house remanufactured laser cartridges have field failure rates of approximately 3.0%. QIP's field failure rates are one-half to one-quarter the industry average. As QIP's motto states, "Quality is not just in our name . . . it's in our products.

Managing With The Customer In Mind

Much of QIP's customer-centric formula depends upon its experienced and driven management team. Steiner has spent much of the last eleven years attracting top management talent from both inside and outside the industry. QIP's Sales and Marketing Manager, Wharton graduate Dave Michon, joined QIP in 1999. Michon lives and dies by the philosophy that the customer is always right. As a result, the company has doubled in size in its eighteen months under Michon's leadership.

QIP's Plant Manager, Steve Yager, who holds a Bachelors of Science in Industrial Engineering from Fresno State University and supervises QIP's 120+ warehouse employees, keeps warehouse employees informed of major customer issues at the daily all-company meeting. "We try to connect every employee to the customer, from receiving to production to quality to packaging to shipping. If all of our employees don't understand the customers' top priorities, then we're not doing our job well," emphasizes Yager.

New Products For New Customer Needs

QIP recognizes that customer needs change over time - as OEMs introduce new products to the market, QIP works hard to get the products out to its customers. The average lead-time from start to finish for a new product introduction at QIP is 40 - 45 days. Over the past several years, QIP has introduced new products at a rate of 1-2 per month. Smaller competitors are at a significant disadvantage relative to QIP because they have neither the access to the market resources nor the ability to effectively introduce the products. Because of QIP's size, it has better access to more customers as well as formalized market research and can more easily predict which new products to develop. This formalized product development approach and wide product selection has contributed to the company's record growth rates. This has allowed QIP to offer over 100 different products, while most competitors within the industry offer 20 - 40 different products. Given QIP's established product development process and large product selection, 50% of the firm's sales come from specialty products.

Preparing For Future Growth

Over the past several years, QIP's success has attracted the interest of numerous partners. In the spring of 2001, QIP was acquired by Blackford Capital, a private equity firm based in Chicago focused on middle market manufacturing companies. Blackford Capital's Limited Partners include Tim Solso, Chairman and CEO of Cummins Engines, the world's largest manufacturer of diesel engines; Steve Wheelwright, former Senior Associate Dean, Harvard Business School; Adrian Slywotzky, Vice President, Mercer Management Consulting, and selected by IndustryWeek as one of the six most influential thinkers in business today along with Peter Drucker, Bill Gates, Andrew Grove, Michael Porter, and Jack Welch; and Michael O'Connell, Managing Director and President of Anhalt, O'Connell & Steffanci, an investment management firm with over $800 million under management.

Blackford Capital's President, Martin Stein, has stepped in as QIP's CEO to help manage the explosive growth planned for the future. Stein has experience working as a consultant to Fortune 500 clients such as Sears, Dow Chemicals, Searle Pharmaceuticals, Pfizer, and PacifiCare Health Systems as well as various executive branches of the federal government such as the Department of Labor, the Federal Aviation Administration, and the Department of Energy. Stein who has published three Harvard Business School cases, received his BA, with honors, from the University of Chicago, and he received his MBA from Harvard Business School, will continue to focus QIP on the customer. "The company would not have achieved the success it has achieved today if it weren't for the customers. And we won't achieve the success we hope to achieve in the future if we don't continue putting our customers first."

In February when QIP's server went down, McGregor spent 40 hours straight at the company making sure that everything worked perfectly before he went home. "As the classic saying goes," McGregor laughs, "we stay awake so out customers don't have to . . . " If the past is any prediction of the future, QIP's customers should sleep very well.