When shop owners are deeply involved in daily operations, it’s easy to become absorbed in routine tasks and lose visibility into the financial health of the business. This can lead to decisions being made without a clear understanding of their financial impact. Dana and Kathy Schnepf, co-owners of D&K Powder Coating (North Mankato, Minnesota), were in this situation for 10 years until receiving a cold call from Steelhead Technologies, a company offering an all-in-one ERP system built for job shop manufacturing. The partnership has driven unprecedented business growth, operational efficiency and profit margins that have exceeded expectations.

Dana Schnepf, co-owner of D&K Powder Coating, and Dean Halonen, chief revenue officer at Steelhead, first met in December 2021. The partnership has prospered immensely, as D&K has experienced revenue increases annually since then, as well as near-zero rework rates and increasing word-of-mouth referrals. All photos courtesy of Steelhead Technologies.

Before implementing Steelhead, D&K was a growing but largely a margin-unaware business. While the Schnepfs reviewed a monthly profit and loss statement and understood overall profitability, visibility stopped there. The team had no clear insight into whether they were profitable with individual projects or customers.

“We were essentially flying blind,” Dana Schnepf recalled. “We knew how the business was performing overall, but not what was actually driving those results.”

Ken Hannem, D&K’s operations manager, encountered the same challenge when he joined the team in 2022. When he asked how the company ensured that quotes were profitable, they didn’t know how to answer. Decisions were made based on experience, instinct and high-level financials.

When the Schnepfs first met Steelhead Co-Founder and Chief Revenue Officer Dean Halonen, they recognized how advantageous implementing this particular ERP software could be. Within minutes of seeing Steelhead’s real-time dashboard, complete with live part statuses and job costing metrics, they clearly understood the benefits.

“We’ve been running on gut feel and spreadsheets for 10 years,” Dana Schnepf said. “Steelhead provides visibility into every rack, every job, every dollar. I told Dean we needed this yesterday.”

Deployment began in January 2022. By March, the platform was live, but adoption was slow. As one of Steelhead’s earliest customers, they partnered closely to customize the software. In the early stages, Steelhead collaborated directly with leadership at each work center to understand operational needs and tailor the software accordingly.

Full cooperation from all staff members was critical, which the Schnepfs made clear to their entire team. “If you’re not using it, you’re not part of the process,” Dana Schnepf said, not as a threat, but as a commitment to consistency, accountability and long-term success. Within four to six months, the entire team was actively using the system and making meaningful operational changes based on real data.

Once operators consistently logged time and job data, the insights were immediate and often surprising. “There were things we thought we understood about the business that turned out to be completely wrong,” Schnepf said.

Among the key discoveries:

• Customers the team had considered letting go were actually highly profitable.
• Small, one-off prototype jobs, previously accepted without hesitation, were losing hundreds or even thousands of dollars per job.
• Large, heavy parts that seemed routine were among the most profitable jobs in the shop.

These insights led to immediate changes, including setting minimum order requirements and being more selective about the work D&K accepted.

On the labor side, Steelhead uncovered major differences in efficiency between operators performing the same task. For example, a taping and plugging process could take one employee 3 minutes and another 13 to 15 minutes due to natural variation in skill and speed. Armed with this data, the company optimized workforce allocation, assigning employees to roles where they performed most efficiently.

With accurate data in hand, D&K transformed not only internal operations but also customer relationships. For example, a customer who had agreed to send parts in batches of 400 but consistently delivered only 30 at a time was impacting profitability, but the issue had gone unquantified.

Using Steelhead data, Ken Hannem met with the customer, clearly outlined the cost implications and restructured the agreement around realistic quantities. Within a few months, the account improved from roughly 50% of target margin to hitting margin goals.

Hannem explained, “With Steelhead, we now know what makes money and what does not.”

Schnepf noted similar conversations around lot sizing and said he now regularly works with customers to adjust order volumes, explaining that larger runs enable more efficient processing and lower costs for the customer.

Although Steelhead provided the tools, commitment from shop leadership made the successful transition possible.

“We have been fortunate to serve hundreds of job shop owners. Dana Schnepf is certainly one of the strongest leaders I have known,” Halonen said. “He understands that growth comes from making bold decisions and committing to them fully.”

That top-down conviction has created a culture of accountability and continuous improvement, reinforced by a disciplined approach: reviewing job cost data before work leaves the floor and addressing margin gaps in real time.

By implementing Steelhead, which logs time and job data for D&K, the shop discovered ways to increase efficiency on the floor. This can also lower costs for the customer as well. 

The Results

The impact on D&K’s performance has been dramatic:

• 2022: $4 million in revenue with a 5% net margin
• 2023: $6.4 million, driven by improved processes
• 2024: $7.75 million, fueled by efficiency and customer trust
• 2025 (through Q3): $8.7 million, with projections exceeding $15 million annualized

In September 2025 alone, the company generated $1.442 million in revenue, putting it at pace with a $17.3 million run rate, with margins outperforming expectations.

The company’s reputation for quality has also strengthened, with near-zero rework rates and increasing word-of-mouth referrals. One long-time customer expanded from $80,000 per month to $950,000 in September, now representing more than 10% of annual business.

“Steelhead has really transformed our business from marginally profitable to very profitable,” Schnepf said. “It’s not just software. It gives us the confidence to make better decisions every day.”

Ultimately, the success of the partnership comes down to three factors: hands-on implementation support from Steelhead, unwavering leadership commitment from D&K and a disciplined, data-driven approach to managing every job.