Fabricator builds from a base of short-run jobs
September 13, 2011
Fred Wilke of Wilke Enginuity knows how important the sales function is. Small jobs helped the company grow, but in 2007 they were looking to take the company to the next level. It was time to concentrate on the larger contracts. Then the recession happened.
In the lobby of contract fabricator Wilke Enginuity is a telling sign on the wall. It reads “Salespeople Welcome.”
“We know how difficult it is to be a salesperson, because we’re salespeople too.”
So said Fred Wilke, who in 1985 launched the company (this is true) beside his backyard chicken house near Hanover, in rural south-central Pennsylvania. In recent years the shop manager has realized just how important the sales role is. His current salesperson helped keep the company afloat through tough times, not with large jobs but with small orders from various customers requiring quick turnaround. Like many others, Wilke has discovered how those short-run jobs have become the new normal in contract metal fabrication.
Before launching the business, Wilke worked at a large OEM before being let go because the company’s manufacturing was moving overseas. During his last days on the job, a brochure about a laser cutting system—then new technology—landed on his desk.
“I hung on to that brochure, because I figured that was the future,” Wilke said.
He started Wilke Enginuity by building dies and fixtures for local machine shops. Soon a potential customer called asking if he could cut some material for some ornamental metalwork. The potential order was a big one, and Wilke thought back to that laser cutting brochure. Within nine months, he had bought his first machine with a resonator boasting a whopping 750 watts of power. The machine was installed, and Wilke was ready to go, only to find that potential customer had gone bankrupt.
Nevertheless, work ramped up gradually, starting with those small jobs. They gave the company its footing and the experience to tackle larger-volume work. And after a year or so, oh how the work came. Employees were working 12 hours a day, seven days a week just to meet the demand, which at the time came from all across the nation—not many had a laser in those days. Volumes grew. The company bought a second machine, and then a third and a fourth.
By 2007 Wilke had three 5-kW and one 1.5-kW laser cutting machines, two CNC press brakes, an automated graining and deburring machine, plus several CNC mills and turning centers. At the time business was absolutely booming, and managers got together, including Fred and his son, B.J. Wilke, to develop a new strategy.
Small jobs had helped the company grow, but in 2007 they were looking to take the company to the next level. It was time to concentrate on those larger contracts. Such work would make business planning and scheduling easier, and would provide a platform for the company to grow even larger. This, they thought, was the future. Then, well, you know what happened.
“The economy fell on its face,” Fred said.
Today Fred is thankful for the company’s extensive list of small-job customers. They gave his company its start, and they’ve helped keep the lights on through difficult times.
Business is challenging, and it’s not just because of 2009’s lousy economy, which forced Wilke to reduce headcount from 23 to 15. It’s been a combination of things. The one most talked about is offshoring. But that’s just one factor, and it’s one that existed before Wilke Enginuity opened its doors. Fred started the company after being let go from an OEM that was sending its manufacturing overseas.
In the 1980s, just offering laser cutting differentiated a business. “When we started, we were getting work from all over the country,” Fred recalled. “That’s why we grew so big and got so busy. Now, laser cutting services are like gas stations. They’re everywhere.” About three-quarters of the shop’s customers now are within a 50-mile radius.
Also, no one wants inventory; indeed, after last year no one can afford it. Less inventory is good for cash flow, so this means customers want short jobs completed just-in-time (translation: yesterday). To respond quickly, many OEMs have brought laser cutting and other fabrication in-house. This has left less work for contract fabrication shops like Wilke.
These challenges are leading Wilke’s management team down a new path.
“We are quoting some large jobs,” Fred said, “but it’s so competitive that if we actually get the job, I wonder where we made our mistake! That’s no joke.”
Again the Wilkes must build a business with many small-volume jobs, and in recent years the shop has made investments to make small-lot fabrication more efficient. For instance, managers recently invested in MetaCAM nesting software, which helped increase material utilization and better managed material remnants. This comes in handy when filling an entire sheet is a challenge.
Of course, only sales efforts will bring more work in the door, and this leads back to that sign in the lobby: Salespeople Are Welcome. The sales function is the lifeblood of business, and it can be one of the best sources for local industry intelligence. As Fred explained, local salespeople appreciate the sign, and it often sparks a conversation that can involve information about who’s busy in the area.
The company also has joined Pennergy Source, a group of southern Pennsylvania manufacturers that offer services to the energy sector, be it for wind towers or the power grid. As a member, Wilke provides laser cutting and fabricating; others do machining, electronics, controls, and a variety of manufacturing services. The thinking is that by collaborating and communicating, they can all win more work.
This consortium, Fred’s salesperson on the road, and that sign in the lobby all may be instrumental to Wilke’s future growth. Every day Wilke’s salesperson e-mails Fred about any intelligence he’s learned about which companies are busy, and he sends back a steady stream of small jobs. Intelligence also comes from salespeople who walk into Wilke’s lobby, look at that sign, and start a conversation. Such communication seems to be providing the work that’s buttressing many a small business during this gradual economic recovery.
My conversation with Fred earlier this year ended abruptly. His office manager walked into the room with a sign: “Baby’s here.” A few minutes before, B.J.’s wife had her second child. Fred was off to the hospital to see the new grandchild.
The moment couldn’t have been more appropriate. The sales function ultimately feeds a family. What could be more important than that?