Multiple locations help EVS Metal stay more agile than larger competitors
June 13, 2012
EVS Metal, Riverdale, N.J., which started as a 5,000-square-foot fabricating shop in New Jersey, is now a $30 million operation with four locations. The size of the company gives its customers confidence that they are dealing with a metal services supplier that will be around for the long term. The multiple, smaller locations give the fabricator the flexibility it needs to be responsive to customers' needs.
How does a metal fabricator grow yet maintain the same customer responsiveness that helped to build the business in the first place? By staying small, of course.
What sounds like a riddle of the Great Sphinx is actually the secret of EVS Metal’s success. The Riverdale, N.J., metal fabricator has deliberately tried to maintain a certain revenue and employee size so it can be as nimble as it needs to be to respond to customers. In the meantime, it has grown by trying to replicate its fabricating strategy elsewhere, with small and agile facilities in Pflugerville, Texas; Keene, N.H.; and Stroudsburg, Pa.
“Part of our concept was that you could make a facility only so large and still service the customer well. We started to see some competitors grow to be very large, and they aren’t around today. When they were growing, we even wondered if there was enough business around to even run a $30 million facility,” said Joseph Amico, EVS Metal’s vice president and one of the founders of the company.
“We thought if we had a bunch of facilities that were around $10 million, we could still service customers as if we were a small company,” he added.
The strategy appears to be working as the company earned almost $31 million in revenue in 2011 and aims to have more than $34 million this year. This is accomplished with three locations, each having some duplicate and some unique metal fabricating capabilities, and a new Pennsylvania location that is being brought up to speed so that it can further add to the company’s flexible fabricating operations.
What is today a large fabricating operation that spans several states began in a 5,000-square-foot shop in New Jersey in 1994. Amico, who had run a sheet metal shop for an electronics company, joined up with a partner, Scott Berkowitz, to purchase the small fab shop that probably had earned $400,000 in its best year. The business had run into some financial difficulties, however, which put it in position to be up for sale.
“The goals [of the company] were basically to get to the next day,” Amico recalled. But soon enough the duo had the company back on its feet mainly supplying industrial rack mount enclosures for the personal computer market. Over the next several years, EVS Metal had diversified its customer base, building parts for companies in the consumer electronics, medical, semiconductor, telecommunications, and gas and oil extraction industries.
By 1998 it had moved the facility to its current location in Riverdale, N.J. It had started to develop a reputation for providing engineering assistance (see Figure 1), value-added assembly, and high-quality parts, even for very complex fabrications (see Figure 2).
“We were always interested in growing. We were young, energetic, and new to this type of business,” Amico said. “We had a good team. I knew the fabrication and the selling process, and my partner was able to run the finances and was very good about acquiring new machinery when it was hard for us to do it.”
The opportunity to grow came in 2000. The EVS Metal owners knew of some people in the Austin, Texas, area who were looking to exit the fabricating business—literally shutting the doors to their business and leaving their customers without a metal fabrications supplier. Amico said he and his partner recognized the area as being ripe for expansion because of the many nearby high-tech companies that were potential customers for sheet metal products. So they decided to take over the business, renting the same facility and literally throwing equipment in there as quickly as possible to chase after much-needed customers. It didn’t help that the following year was abysmal for manufacturing in general.
But EVS Metal stayed the course and grew the businesses, both in New Jersey and Texas. Both locations actually acquired nearby metal fabricating operations in the early 2000s, bolstering the facilities’ talent base and fabricating capabilities and expanding the customer base.
The next opportunity for expansion came with the purchase of a fabricating company in Keene, N.H. The acquisition gave EVS Metal a location that specialized in heavier, more complex, precision weldments and assemblies. The 30,000-sq.-ft. building also gave the company another location from which to serve the New England market.
Today EVS Metal is in the process of setting up a small fabricating operation in Stroudsburg, Pa. That location will handle simpler fabrications and more of the high-volume orders that don’t quite fit in either Keene or in Riverdale, where the high-precision, thin-gauge work is done (see Figure 3).
The New Jersey facility remains both the headquarters and the largest fabricating operation. In the Garden State location is 60,000 sq. ft., and EVS Metal is leasing another 12,000 sq. ft. nearby. One hundred out of 116 employees work over two shifts at the Riverdale location.
“I think the smaller facilities work out much better,” Amico said. “It’s easier to service the customers out of those facilities, which is often the main difficulty in running this kind of business. Obviously, if you don’t satisfy the customer, you don’t have a business, no matter how great you can punch and bend metal.
“In those larger facilities, I think [that the focus on the customer] tends to get lost,” he added. “And the culture changes [with growth]. You have areas of the facility where there is a miniculture, which is not in line with what you are trying to do in satisfying the customer.”
So just how did EVS Metal replicate the can-do culture that was born in Riverdale in the other fabricating locations? The key was to have good systems in place, according to Amico.
For example, the company has been a longtime user of the enterprise resource planning software MIE Trak. The software gives managers a constant glimpse into the operations and profitability of those activities, particularly back in the day when a lot of other shops were managing based on gut instinct rather than hard data. Today that computerization encompasses operations at all locations, tracking items such as labor costs and job status on the shop floor.
Amico added that just as the company was an early adopter of business management software, it was an early believer in regimented systems to ensure quality manufacturing practices. Even though the company did not become ISO-certified until 1998, it already was following procedures that certification stipulates. Fabricating activities were performed according to an agreed-upon standard. Contract reviews were conducted regularly. Quality was tracked, and if a problem arose, employees investigated and instituted corrective action measures.
“It made it easier when we would set up a new facility—to have a system that people could work within,” Amico said. “We were never reinventing the wheel when we went to the other two facilities.”
The wildcard in this type of expansion scenario is personnel, but Amico said that EVS Metal has been fortunate to find good managers for each facility. The company doesn’t have to “manage tightly” from New Jersey, he said, but rather concentrate on centralized functions, such as accounting, and executive-level management. Functions such as sales remain localized because they are the face of the company to customers.
The multilocation approach has proven beneficial to EVS Metal in many ways:
EVS Metal may have a different corporate setup than other metal fabricators, but that doesn’t make it totally unique. It does share one main concern with other metal fabricators: getting jobs in the door.
“The biggest challenge is really keeping that pipeline of work open,” Amico said.
EVS Metal realizes that to fill the capacity at its four locations, it needs to invest in the business. For many years it tried to stay ahead of competitors by investing in the latest business software and 3-D modeling programs, but those tools are more mainstream today. The company also has been active in investing in new manufacturing capabilities, such as robotics (see Figure 4) and a new powder coating line (see Figure 5).
“We try to be strong everywhere,” Amico said. “It used to be price, quality, and delivery. Pick one. Now you have to have everything. You have to have perfect quality, the lowest or at least close to the lowest price, and your delivery has to be impeccable.”
That’s a big job for any one shop to take on, but with three small shops and another one on its way working together, it’s proven to be an obtainable goal.