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Custom metal fabricator grows beyond sheet metal

Nu-Way Industries’ touchscreen display business serves a fastgrowing niche

It has always been difficult to pigeonhole a metal fabricator. Does a shop specialize in sheet metal or plate; light enclosures or heavy fabrications; precision aerospace or work that isn’t so precise; industrial work like vessels or piping skids; architectural and ornamental work; structural fabrication; or a combination? There’s nothing new about such diversity in this business.

One thing that binds together these diverse brands of fabrication is a common challenge: standing apart in a competitive market. Plenty of shop owners have stories of work leaving the shop then coming back months or years later because another supplier just couldn’t perform. This experience is pushing more OEMs to work with fabricators to develop best practices and lower the overall product life cycle costs. We now have buzzwords like supply chain partner and preferred supplier. It’s not just about price anymore.

That’s the theory, at least. Of course, price for certain products still is extremely important. Anyone who works at a custom fabricator knows this, and it becomes particularly acute when a shop doesn’t win an order. Some owners and managers I speak with say something like, “I don’t understand how the competition is making money on this.”

Consider three metrics from the “2014 Financial Ratios & Operational Benchmarking Survey” (the 2015 study will hit the streets soon), put together by the Fabricators & Manufacturers Association International® (FMA). For many fabricators, customer returns make up less than 1 percent of sales. At the same time, the percentage of jobs won versus total bid has been in the mid-30 percent range for the past three years. All this shows an industry in which quality is often a given, and shops fiercely compete for work.

So what can a fabricator do to set itself apart? Investing in automation and the latest technologies, combined with improvement efforts and smart management, can help shorten manufacturing time and improve on-time delivery rates. Shortening the order-to-cash cycle lowers costs, which in turn gives shops the ability to lower prices and still (ideally) make a profit.

According to recent benchmarking surveys from FMA, on-time delivery has hovered around 85 percent for many. Considering this, a shop with, say, an on-time delivery rate of 99 percent certainly would stand out in a crowd.

When you think about where manufacturing is headed, with new technology and increased use of improvement techniques, world-class quality and delivery theoretically could be commonplace one day. How then does a shop continue to grow in such a competitive environment? To introduce another revenue stream and mitigate the pains of unpredictable contract work, many job shops launch their own product line. Of course, a product line comes with its own uncertainties, the biggest one being the new products’ actual demand.

Design for manufacturability (DFM) services can set a shop apart to an extent, but it doesn’t make it unique. Many custom fab shops do at least a little DFM, especially if they can customize a design to fit the shop’s manufacturing technology. More complete design services are becoming prevalent too.

Can a custom fabricator truly differentiate itself these days? For an idea, consider Nu-Way Industries’ story. Like other custom fabricators, the company serves myriad industries: construction, advertising displays, industrial and electrical enclosures, among others. It has an impressive variety of equipment split into two value streams. One value stream is in what Nu-Way calls the Automation Center, a significant building addition that houses an extensive automated cutting and bending system with storage and retrieval towers that span the width of the building. The other side of the factory—the second value stream—has stand-alone yet still modern fabricating machinery.

All this technology has helped Nu-Way stand apart and grow into what it is today, a $40 million-plus fabricator with more than 260 employees. So what will help it grow even more? Joe Fijak, Nu-Way’s executive vice president of sales and marketing, pointed to what’s been installed between the main shop and the Automation Center: a new Class 10,000 clean room. It’s for the assembly of LED touchscreen displays for commercial and industrial use. These entail not only the display itself, but also its sheet metal enclosures, which Nu-Way can readily produce.

This is part of the fabricator’s Display Solutions division, which recently won a contract for menu displays in quick-service restaurants. In the near future, if you find yourself ordering food from a touchscreen, there’s a chance that the product you’ll be touching may be customized and assembled at Nu-Way’s plant, near Chicago’s O’Hare Airport.

Fijak has years of experience in the LED display industry, both with North American distributors and the makers themselves, mainly in Asia. “The display touchscreen sector is a $150 billion market today,” he said, adding that most industrial and commercial customers require customization and product support for three to five years or longer.

Does the touchscreen require antiglare or anti-reflection treatment? Will it be outside or inside? How bright does the screen have to be? Does the touchscreen need to be installed with tape, or will it operate in a harsh environment and so require a more complex and robust optical bonding process?

This work isn’t automated but instead requires refined procedures and trained assemblers. It calls for sheet metal fabrication, product design expertise, as well as business contacts in the fast-growing niche of commercial touchscreen displays. According to Fijek, Nu-Way has all of this, which will make this display business a key part of its growth strategy.

“This will be a $25 million-plus business,” he said. “At some point, I see Display Solutions being as much as a third of our business.”

The growth isn’t coming from a product line but instead a new custom manufacturing service. It’s not just about sheet metal anymore, though Nu-Way has remained true to its custom fabrication roots. It simply took customization a step further. It hired talent from the LED display business and combined their knowledge with existing expertise in metal fabrication and assembly. All this, Nu-Way managers hope, gives the company a recipe to fill the needs of a growing niche.

About the Author
The Fabricator

Tim Heston

Senior Editor

2135 Point Blvd

Elgin, IL 60123

815-381-1314

Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.