Business

Coffee Break: John Costello, CEO of Cherry's Industrial Equipment Inc.

Posted February 26, 2023 12:00 am

John Costello

Chief Executive Officer

Cherry's Industrial Equipment Corp.

68 Congress Circle West, Roselle, IL 60172

(800) 350-0011

www.cherrysind.com

Industry: Manufacturing /Engineering

Annual revenue: $16,000,000

Number of employees: 20

Age: 56

Family information: Married with three children: wife, Kim, and children Jack, Grace and Leah

Hometown: Downers Grove

Q: Describe your company.

A: We are an engineering and manufacturing company with a 40-year history of providing solutions for workplace safety issues.

We make companies safe and successful. We do so by manufacturing highly engineered ergonomic equipment that can be found in production facilities throughout North America and beyond, encompassing a wide range of industries. Our customers turn to us to help them solve pallet and material handling problems, among others; the solutions we provide help the warehouse, dock or line worker avoid injuries and loss of work from back injuries or sprains.

We build about 250 pieces of customized equipment each year. You'll find Cherry's Industrial Equipment machines in food plants (such as meat and poultry), pharmaceutical operations, and a number of other industries. Our equipment transfers products on and off pallets.

One of the first pieces of equipment we designed, the pallet inverter, now touches hundreds of products daily, from Campbell's soup to lottery tickets, from ATMs to cosmetics.

In addition to reducing injuries, our equipment improves plant efficiencies by reducing the number of human touches needed along the production process. Our products include pallet retrievers, tippers and dispensers.

In addition to our custom-designed machines, we sell ancillary products that go hand in hand with our manufactured equipment, such as stretch wrappers and pallet washers. Our clients turn to us for improved safety, improved efficiencies, and help in automating their production processes.

Q: Do you plan to hire any additional staff or make any significant capital investments in your company in the next year?

A: We've actually spent a good part of this past year addressing those two objectives. During our third and fourth quarter of the year we hired four new people, and we anticipate hiring an additional salesperson later this year.

We undertook and completed a number of improvements here at our 30,000-square-foot Roselle facility this past year. Some were cosmetic in nature, such as painting. Others were safety and workplace condition upgrades.

We developed and created walkways and barriers to better separate our team (technicians and salespeople) from the back of the building where the heavy machinery is located. In addition to enhanced safety, this also creates a better acoustical environment for our team to work.

An additional investment we continue to make is in training. We're very focused on safety training, and this is an ongoing process for us.

Q: What will your company's main challenges be in the next year?

A: Supply chain issues were atop last year's challenges, although we fared better than many. We are fortunate to have great partners and vendors, which enabled us to get our products to market faster than many of our competitors. Looking forward, we may see pricing pressures and a possible third- or fourth-quarter slowdown. Despite this, we're optimistic for what the next year will bring. We've weathered previous downturns by working to become even more efficient, and we believe 2023 will be a good year.

Q: What's the hottest trend in your industry?

A: Automation, and there are two trends here. First, there's the push toward robotics, but that's not a solution for everyone in the industries we serve. Utilizing robots in plant production can require hiring sophisticated, trained (and highly priced) staff to deploy these robots effectively. Such employees can be hard to come by in this economy.

What is more prevalent is the incremental approach to automation, which does not require robots. In a production line, for example, the process may include three, four or even five human touches along the way.

We are frequently approached by clients seeking solutions for their automation needs. A conveyor or series of conveyors may eliminate the need for two, three or four workers. Fewer human touches means less risk of on-site injuries while also addressing another problem that many plants face - namely, not enough people to fill positions.

Another trend we're seeing is a large increase in demand for spare parts for our machines. With supply chain worries, clients are seeking additional spare parts to keep on hand in case a machine needs a repair. They become very reliant on the machines we manufacture for them and want to do everything possible to avoid down time.

Many companies are also investing in preventive maintenance contracts with us if they do not have mechanics on hand at their facility. Overall, it's a greater awareness by clients to be sure that they have their bases covered if a machine needs repair or maintenance.

Q: If you had one tip to give to a rookie executive, what would it be?

A: Be humble. It's all right to tell people you don't know all the answers.

Q: Do you have a business mantra?

A: Simply put, it's, "Let's all be sure we are pulling the rope in the same direction." I'm very invested in this company, having bought out the founder's interest and later the shares of my former partner. It's important to me to foster an inclusive environment here - we share financials, and we seek and value input from everyone on the team. We are all in this together. We are especially pleased to have been selected as a 2022 All-Star Company by The Great Game of Business, recognizing our workplace culture, employee engagement and financial performance.

Q: From a business outlook, whom do you look up to?

A: Rob Shepherd, President at CMA/Flodyne/Hydradyne. He is a vendor of ours who I view more as a partner. I have always found Rob to be a wise person and great mentor.

Another is Jack Stack, President and CEO of SRC Holdings Corporation. He launched The Great Game of Business.® He is a big proponent of open book transparency management and of the power and strength of capitalism. I really believe in both of them.

Q: What is one interesting fact about you or your company that most people may not know?

A: I am a competitive swimmer. I compete in state and national meets and am a ranked swimmer for my age group. I had taken somewhat of a hiatus but returned to the sport post-pandemic. I really enjoy swimming, and I managed to take two first place awards and one second place in meets last year.

Q: Was there a moment in your career that didn't go as you had planned? What lesson did you learn from it?

A: I went through the process of buying out a partner in this business. We had differing views of what was best for the company. It was a five-year process leading to the decision. It can be a bit like what I imagine going through a tough divorce would be like. What I learned is that a company cannot have two competing visions or bosses.

Q: What do you like to do in your free time?

A: My wife and I recently bought a lake home in Michigan, and we spend as much time there as we can. I'm somewhat of a putterer and tinkerer, and I enjoy working on projects around the house. And my wife and I are both very involved in the lives of our three children.

Q: What book is on your nightstand?

A: "Get a Grip," by Gino Wickman and Mike Paton. It's a business platform that is part of Traction.

Q: What keeps you up at night?

A: Not too much. With all the exercise I get from my swimming practice, I sleep very well. And it certainly helps that I have a great leadership team too; because of their collaboration and support, I'm able to work on the business as opposed to in it.

Q: If you were not doing this job, what do you think you would be doing?

A: I'd be involved in giving back to the community in some way. My Dad worked helping rehabilitate people, mainly the underprivileged, to get back into the workforce. I think I am a good teacher and trainer and might look at something like that.

Q: What was your first paying job?

A: My Dad owned a newspaper agency. I worked for him starting when I was 9 years old. Every weekend, we worked from 3 a.m. to 9 a.m. We handled newspaper deliveries that the traditional carriers didn't or couldn't. I learned a lot and was able to use the earnings to help pay for college.

Q: If you could put your company name on a sports venue, which one would you choose?

A: Chicago Bears. I'm a big fan.

Q: Two people to follow on Twitter and why. (besides your company)

A: 1. Steve Martin, the actor/comedian.

2. NASA. My son is a rocket scientist and a Purdue graduate who is working for a space startup. When the Lunar Lander goes to the Moon in 2024, his rocket will be on it.