Written by Don Ratzlaff Wednesday, 21 November 2007 06:15
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|Hillsboro Industries management team members Mike Gerken, Phil Wyssenbach and Merle Friesen (from left) stand behind the main plant where a new 22,500-square-foot addition will soon be under construction. The project will enable the company to consolidate its production under one roof. Don Ratzlaff / Free Press|
The concrete that will be poured at Hillsboro Industries over the next weeks will do more than accommodate a $900,000 facility expansion at the company’s Industrial Park site.
The ownership and management team, in its third year of spearheading a dramatic turnaround of the 39-year-old business, sees the project as laying a foundation for long-term growth and success.
“I am very enthusiastic for the next five to eight years—and I say that without caution,” said Phil Wyssenbach, company president.
“Most people would say ‘cautious optimism,’” he added. “But I can’t wait for mid to late March, when everything will be done but the sweeping of the floors. I’m getting excited just talking about it.”
In 2004, Wyssenbach joined with Mike Gerken, Merle Friesen and Marv Schellenberg to form Flinthills Industries Inc., which acquired Hillsboro Industries in March 2005 from Wichita-based Great Plains Ventures.
Gerken and Friesen join Wyssenbach on the on-site management team as chief operating officer and national sales manager, respectively.
The proposed 22,500-square-foot addition to the main plant will enable the company to consolidate its operation under one roof.
Currently, employees at the main plant have been manufacturing the company’s steel products while the aluminum products have been manufactured in a rented building about a quarter-mile to the north.
The owners say consolidation will reduce utility costs and increase efficiency and productivity while enhancing the working environment for employees.
The additional space will enable the company to store its raw materials and complete the various stages of production for all of its products within the confines of a single building.
That means employees and products won’t be constantly moved in and out of the building—and letting the outside elements in.
“Right now those doors open up all day long,” Gerken said. “They open and close literally 30 to 40 times a day. By doing this, we’ll cut that down to maybe four or five times a day, max.”
That means a significant savings in utility costs, particularly during the hottest and coldest times of the year.
“It’s hundreds of bucks that you lose,” Gerken said. “If you can cut that in half, that’s real nice.”
Keeping the doors closed, combined with the installation of a new dust-collection system on the company’s newly acquired high-definition plasma cutter, will help reduce utility expenses as it cleans the air.
“It will take out all the fumes, filter the air, but then put the air back in the shop,” Gerken said. “A lot of guys will take the air and just shove it outside—but that’s heated air. With this system we will try to provide a good working environment and reduce our utilities.”
Less dust will contribute subtly to a higher-quality end product, too.
“You won’t be able to eat off the floors (with the changes), but you sure won’t mind painting in there,” Wyssenbach said.
Change in production flow
The new addition will bring a major change in production flow. Gerken, who oversaw workflow while employed at Learjet Inc. in Wichita, has redesigned the production path for the local company with input from employees.
“In many ways this (plant) was not set up as a production facility,” Gerken said. “It was set up as a manufacturing facility. There’s a difference.”
For example, a trailer-in-process will no longer go in and out of the building as it moves through the various stages of production. Instead, it will move from one adjacent station to the next one as it moves toward completion.
“The most efficient flow is a U-shaped flow,” Gerken said. “Our paint booth will be our turnaround point.”
Not only will the expanded building make production more efficient in the short term, it is designed to accommodate expansion in the future.
“To increase volume, all you do is lengthen position lines,” Gerken said. “We’ll be set up to grow the business.”
Effect on morale
The other advantage to consolidation is less tangible to measure, but just as important to the business.
“Beyond reducing costs, we’ll be able to get more like a single family,” Wyssenbach said. “Right now, with the separation into two units, the people who work in the north plant feel left out. I mean, it’s human nature. This will help pull the family together.”
Product and production
Improving production efficiency has been part of the management plan from the day the business was acquired.
“Up front, we knew we’d spend the first three years improving the product line and production so that we’d have something to market,” Gerken said.
Improving the product line was Job 1.
“In a nutshell, we literally took each product and addressed it with the dealers and said, ‘What do you want to see improved? Where are we falling short?’” Friesen said. “We continue to look for the weakest link in each product and improve on that.”
The company has added three employees in engineering to help facilitate improvements in quality and safety.
Paying attention to detail is paying off, according to the management team. Earlier this year, Hillsboro Industries was notified that its entire product line had achieved compliance with the standards set by the National Association of Trailer Manufacturers.
“To me, that is a big step as far as quality,” Wyssenbach said. “I think to some dealers it was big as well.
“We were never far off,” he added, “but we took care of the small issues that we needed to.”
Holding down prices
The company has been able to improve its products without significant increases in prices by developing financially advantageous partnerships with the suppliers of its raw materials.
“Our vendors have to want us to be successful,” Gerken said. “We had some who didn’t, and they’re not with us anymore. We have others who, if they can reduce their costs, they pass it on to us. It has to be a partnership.”
The combination of improving the product while holding down costs has enabled Hillsboro Industries to enjoy stable sales in a nationwide market facing declines of 20 to 25 percent.
In addition, the company has been adding new products—including the new braking system it acquired earlier this year through consolidation with Kintec Inc. Hillsboro Industries will be launching a campaign to market the system after the first of the year.
The launch is part of the next major step in the business plan: expanding the marketing and dealer base.
“This next stage of (facility) expansion is going to set us up to do that next,” Wyssenbach said. “The focus to this point has been on manufacturing and engineering. So the focus over the next three years will be more on sales and marketing.”
An initial step in that direction has been the creation of a new company Web site (www.hillsboroindustries.com).
“Product awareness through our Web site has been huge—we’ve been constantly upgrading it,” Friesen said.
This year the company redesigned the site, and has added a dealer section. In a change of focus, the new site is designed to appeal to potential buyers of HI products as well as to its network of dealers.
The new focus appears to be working.
“We get calls here like, ‘Hey, we’d like to talk to you about your product,’” Friesen said. “We direct them to dealers, who are listed on our Web site.”
The leadership team is proud that the site was designed by Kelsey Hiebert, a Tabor College student—one of several connections the company has made with the local college through internships.
“Compare our Web site to any other trailer manufacturer’s, and they’re paying ‘professionals’ to do it,” Gerken said. “I think we’ve got a college student who is heads above many professionals.”
The progress made in three short years has the management team enthused. Sales have rebounded and employment has increased from 35 at the original purchase to about 50 today.
The turnaround has required considerable investment of time and resources—including an estimated $500,000 in new equipment and products over and above the current facility expansion.
The management team sees the investment as worthwhile for the growth of a locally based company that intends to be a reliable economic provider for employee families and the community as a whole.
“They understand that we’re investing in them,” Gerken said of the employees. “It would be just as easy for us to try to peel off as much money as we can and not put money back in. But we’re here for the long haul.
“We’re sitting here saying, ‘What’s it looking like in 20 years?’ We’re not saying, ‘What will it look like tomorrow?’”
Added Friesen: “If it was just a three- or four- or five-year period, this (expansion) effort wouldn’t happen—it wouldn’t be worth doing.
“All the groundwork being laid now is going to accumulate and allow us to do things better in the future for our employees,” he added. “It will allow us to be better employers.”
The fact that the company received tax abatement from the city for its current expansion project is a sign that the city realizes the owners’ long-term commitment to Hillsboro, Wyssenbach said.
“We appreciate the city understanding our focus and our intent because they’re partnering with us for the long haul and the forward look,” he said.