Re-inventing an Indiana Manufacturer

When Deb bought the Indiana-based business in 2001, “it seemed like a good idea at the time,” she says. “I was already working there and the opportunity became available.” But the company was not in great shape. Declining from its 80-employee peak to a low of 28 employees, 90% of the company’s business came from a single customer. “We had been doing business with them for so long, and were dependent on them, that we couldn’t raise our prices. And when their volume changed, we could only react to that. We were totally locked in.”

When Deb bought the business, her main goal was to grow the company’s customer base and expand in to different industries. Six years later, that is exactly what she did, but how did the company get to where they are today?

She knew that in order to grow the business that she would have to increase the capacity that the shop could handle. She started by adding and upgrading the company’s equipment and then she and her team began to go out and look for new customers in various industries that had always been of interest to the company.

During the customer acquisition process, Deb came across manufacturing marketplace MFG.com. Prior to getting their new equipment, the company first tried using MFG.com a few years ago but didn’t have much success. “At the time, we didn’t really have extra capacity to service new customers,” Deb explains. After acquiring their new machines, she gave it another try starting in 2006. This time around, MFG.com has been a key component in the company’s re-invention as a more diversified and competitive resource for turning, milling and grinding of aluminum, stainless steel, carbon alloys, hardened steel, brass, bronze, plastics, Monel, gray iron, and various castings.

Deb’s business has used MFG.com to broaden its customer base and to broaden the range of products it can produce. “Sometimes you think you want to do something (a new product or service) so you bid on a small job, then make it happen. Sometimes that requires learning new processes, lots of rework, and going out of the way to make the customer happy. Afterwards, you can decide if it’s good business – Can we do it and make a profit? Does it use our skills and equipment well? Is it something we really want to do?” Before MFG.com, we might bid on and win a year-long contract. Then, if it turned out to be difficult or not profitable business, they were stuck. Being able to bid on and get small lot jobs is a huge advantage when exploring new markets.

The real payoff with this strategy is that most of the companies that they do these small jobs for become regular customers. “We bid on a small job (with a new customer). They like our work. Then they come back and give us a chance to quote on more parts and bigger orders.” This happens regularly for us and one of the primary methods they have used to rebuild their business.

Deb’s business has secured over 15 new customers through MFG.com – and they are no longer dependent on that single customer for 90% of their business. They have also been able to expand beyond their traditional markets. Most of their business used to be making bushings for small second-tier construction suppliers but now they have customers in the container industry, the oil industry, and others, making a variety of parts. “We had been trying to get into the oil industry in Texas for years but never knew how to find somebody that needed our capabilities,” Deb says. “Now we have customers there and in the oil industry in California – a place we never thought of approaching. We also just did some work recently for a company in Michigan, less than a two-hour drive away, but we would have never known they were there without MFG.com.”

A critical juncture in the company’s history was the day that Deb backed away from the company that used to provide 90% of their business. “We were locked in to unprofitable pricing and totally dependent on the whims of their business. We had to do it (stop doing business with them), if we were going to survive and grow.” Because of the work that they had done for customers met through MFG.com, and the repeat work that they are continually being awarded, the company was able to declare its independence and move in a new, profitable direction.

One feature of MFG.com that Deb really likes is the ability to go back to the awards and see the successful quotes on business that she did not get. “We can see if we were way out of line (too expensive) and figure out if it’s a business that we shouldn’t be in – seeing how competitive we really are. This is very important to knowing where we should be putting our efforts, where we can be successful.” The insight gained from this kind of analysis has been key to developing new capabilities and going after work that is good business for us, work that they can do well and make a profit doing it.

The company is continually growing and they just received delivery on another new machine. “We’re quoting on a new large contract, and will probably be buying more new equipment soon,” Deb says. She also likes to tell the story of a customer that they did a small job for. “It was a small brass part, a ring, and we did this one small lot of them.” Now, this customer is sending $50 to 60 thousands dollars worth of work to us every month. “This really was the ‘brass ring’ for us,” she says with a big smile.