Ready, set, launch: A custom fabrication startup story

BMF Metal Fabrication’s seven-person team, as of August 2017, from left: Company founders Mark Chadwick is on the far left and Bill Dreisewerd is third from the left. Shortly after this shot was taken, the company hired its eighth employee.

Mark Chadwick is a career metal fabricator, and so is Bill Dreisewerd. The two have worked together in and around St. Louis for 30 years. And off and on they had talked about launching a custom fabricator of their own.

Both knew they would make good business partners. Chadwick is business- and sales-savvy, quick to strike up a conversation, and good at crunching the numbers. Dreisewerd is the hands-on, in-the-trenches technical guru.

“Bill was the spark behind it all,” Chadwick said. “He was the driving factor. Every so many years, we would crunch the numbers, and every time we would struggle to make sense of it.

“But last year I realized I had been in the same place for 24 years, and I was ready for a change. So Bill hit me with the idea again, and I was ready to consider it. We saw the economics of it, and we saw how it could make sense.”

This time the two put real costs and prices behind their analyses, including the cost of machines, buildings, and lease rates, as well as how much sales they needed to be able to support those costs.

Specifically, they saw an opportunity in one key area: quick response. “It seems that some larger shops have a tough time managing lead time and making lead time predictable,” Chadwick said.

Quick, predictable delivery: That in a nutshell sums up their business plan. Chadwick and Dreisewerd spent years at a shop in St. Louis implementing some key tenets of quick-response manufacturing, or QRM, an improvement strategy designed for high-product-mix operations. The philosophy aims to shorten the order-to-cash cycle by focusing not on machine utilization but on job velocity—how long it takes for a job to make its way through the entire business.

They presented this business plan to bankers and, in April of this year, hit the ground running. BMF Metal Fabrication was open for business.

Let It Rain

Chadwick recalls the first day he and his business partner visited their newly purchased 4,500-square-foot building in Winfield, Mo., west of St. Louis. Chadwick looked beyond the yard (big enough for significant expansion down the road) and saw dark clouds on the horizon. So they closed the 14- by 14-foot drive-in bay door, large enough to take most roadworthy trucks. It started raining.

“Well, at least the roof is dry,” Chadwick said.

BMF Metal Fabrication launched in this building in Winfield, Mo., in April 2017.

Moments later the dripping commenced, and water hit Chadwick’s head. “Water started dripping out of every skylight,” he said. “We had to invest in a whole new roof.”

The new roof aside, the two purchased the building for good reason. “We wanted to buy our own building to be able to add on to it,” Chadwick said. “We found that buying would be much less costly than renting or leasing. But there’s a risk to it. We can’t walk away. But it lowers our cost per month, and we build equity in the business faster. And we’re able to customize it. With every building I’ve been in over the years, we always had columns get in the way of a great shop floor layout. Now we have a clear span building, with no columns in our way.”

The ominous storm clouds and rain were harbingers of sorts. The business partners couldn’t make calls to potential customers until they had left their previous employer. Leaving their previous work lives was a leap into uncertainty. Would it rain? Would the work be there?

It did rain, actually and metaphorically. “The phone calls really came to me,” Chadwick said. “People knew I left [my previous employer], but they asked for advice on designs and other fabrication issues. And they asked whether I knew about any fabrication shops in the area. And I said, ‘Sure! I know about this new shop called BMF Metal Fabrication. They’re one of my favorites!’ We filled up with work so fast. Once one job would complete, the next person happened to call and query about another project.”

Working so long in the St. Louis area, the business partners also knew that the job shop market was missing certain fabrication capabilities, one being a laser with a large cutting table. “We knew this kind of table wasn’t readily available in the local job shop market,” Chadwick said. “So we purchased a used laser, a 6- by 12-ft. machine, so we could accept jobs beyond 10 ft. long without getting creative.”

The two had a problem, though. It rained too soon. Customers started calling before they installed the laser. It was a good problem to have, but an issue nevertheless.

“We got our first order when our laser wasn’t ready,” Chadwick said. “So we stumbled on a shop that was just a few miles away. It’s a machine shop and a fabrication shop. They happened to have open laser capacity, and they knew what we were doing. Since then we have formed an amazing partnership. It’s really given us the ability to run on multiple shifts and multiple facilities. Every time they get a hot project, I’m there, and they do the same for me.”

Called Elite Tool, the Moscow Mills, Mo.-based company has several fully enclosed CO₂ lasers, press brakes, and welding, along with a fully capable machine shop that focuses on high-end work from the aerospace industry and elsewhere. The initial contact came through Elite’s quality manager, who used to work with Chadwick.

“We’ve always done fabrication since the business was launched in 1993,” said Frank Roth, co-owner of Elite Tool. “It’s been about 50 percent fab and 50 percent machining. We’ve done primarily heavy fabrication—I-beams, heavy tubing, some platforms for aerospace firms. The sheet metal capability began when we bought our laser, and it grew from there. And it’s in that thin-gauge fabrication that we’ve really teamed up with Mark.

“As anyone who has been in machining and fabrication knows, we’re a tightknit community,” Roth continued. “You have allies and sort out the work, and you know certain shops are better suited for certain types of jobs. We each have our niches. We’re primarily involved in government and defense work, where [BMF] does a lot of commercial work. It’s a great relationship.”

Chadwick recalled visiting Elite and seeing a very long plate, too long for Elite’s laser cutting centers, fixtured awkwardly to a vertical mill. Chadwick told them, “You really should be laser cutting that.” The shop manager quipped back: “We were hoping you’d say that!” Soon after, BMF had the plate on its large laser cutting bed.

How Many Hours?

During the early weeks, ordered machines had arrived but weren’t wired until they were needed to produce parts. “We had to be Johnny-on-the-spot and start making parts, even though we weren’t finished with construction,” Chadwick recalled.

For the first weeks Chadwick and Dreisewerd made parts on their own, running the laser and the press brake. Saying it was a hectic time was an understatement. “Bill and I worked 140 hours one week,” Chadwick said. “After that, I didn’t keep track.” Chadwick even parked his RV next to the shop, so he was never far away, day or night.

But it was a fun time too. Chadwick, who had spent years as a manager at a larger shop, recalled enjoying the hands-on work during those early days, powering up a laser and building a fixture to hold a specialized part. “I had to build and clamp the fixture, get the settings just right, and when I initiated the cutting, the first part was good. I was a laser operator! I was really excited.”

Growth Plans

Running a custom fabrication startup is exciting and chaotic. The challenge comes when the business grows, especially if the chaos isn’t controlled. Founders do what they can to shove parts through the shop, but careful documentation goes by the wayside. So as more people are hired, procedures aren’t clear and confusion abounds.

Chadwick said that he and Dreisewerd know this all too well. They’ve both worked at larger fabricators, and they’re all too familiar with the potential for chaos.

For this reason, the two decided to launch BMF as if it were an ISO-certified organization. First, they launched with an enterprise resource planning (ERP) system, E2 Shop System from Shoptech Software. “I’ve worked in an ISO-certified shop before, and the ERP has revision control that we’ve used in the ISO environment. We also are careful to update BOMs [bills of material] and ensure consistent documentation. It’s a full-blown system, and it’s something that the average startup shop probably doesn’t have. But it’s really the only life I know.”

Their goal is to grow by serving a core group of customers and eventually become about a 20-person shop. Chadwick explained that he’d like BMF to be a little more than a job shop that continually calls on customers for short-term work. Instead, he’d like to partner with a core group of customers—not large OEMs exactly, but highly customized product-line manufacturers. “They don’t buy the same part, but we feel like a contract manufacturer because they send me 100 percent of their work. They know my pricing structure, and they know what a part should cost.”

Growing Through Quick Response

As the orders continued to flow in, they hired their first welder. Next came a utility person, a helper, a press brake operator, a laser operator, and another welder.

“If you look over the past 14 weeks [as of late summer], we’ve hired a person every other week,” Chadwick said. “Everyone here is doing an average of 55 to 60 hours a week.”

Today the shop employs eight, and nearly all of them could be called “utility people.” They all work where needed to get parts out the door.

This in essence is what QRM is all about. In fact, QRM could be seen as a template for scaling up the business. As QRM consultant Bill Ritchie put it in an article featured in this issue, each QRM cell operates as a kind of “mini-business” responsible for getting parts through multiple processes from beginning to end.

“Our whole shop floor is like one QRM cell,” Chadwick said. “Everybody focuses on projects so they go out the door, from receiving the order through shipping. Average lead time is two weeks or less. And we have a fair number of projects in which we get the order in the morning and ship parts out that afternoon.”

He recalled one purchasing manager who turned to Chadwick for a rush order. “That afternoon we made 20 of these parts and 300 more the day after. The customer did its testing [to the part], and moved forward as fast as we could produce the parts. The purchasing manager told us, “‘I don’t know who else I could go to and get this kind of response. You guys should develop an entire business model around this.’ And I told him, ‘We did just that!’”

Photos courtesy of BMF Metal Fabrication, 618-910-0369, www.bmfmetal.com.

Elite Tool, 636-366-4145, www.elite-tool.com